Month: November 2023
Market Update: US economy slows to our pace
November remains a positive month in capital markets, although equities had a neutral week and longer bond prices have fallen back. UK government bonds (Gilts) have been the best performing bond market in the past few weeks, but the tax cuts announced in Wednesday Autumn Statement, although relatively minor, were enough to push the ten-year Gilt yield back up above 4.25% (rising yields mean falling bond prices).
The perils of trying to time the market
The common adage 'buy low, sell high' might seem like a fool proof strategy for maximising investment returns. However, the reality is far more complex than simply trying to predict market fluctuations. Timing the market involves anticipating its highs and lows to buy when prices are at their lowest and sell when they peak.
Market Update: Inflation genie back in the bottle?
Last week was another good one for most investors. In sterling terms, the strongest equity markets were in Europe with the DAX up 4.5% since last Friday afternoon. The biggest winners have been small and mid-sized firms; the FTSE 250 has stormed up by 4.3% compared to a 1.4% increase for the FTSE 100. Likewise, the Russell 2000 (America’s most-watched market index for small and mid-sized companies) is up 5.1% in US dollar terms.
Market Update: Back pedalling central bankers
The turnaround rally in stock and bond markets – started by the previous week’s dovish central bank comments – petered out towards the end of last week, with central bankers seemingly at pains to reverse their messaging or at least reaffirm their continued commitment to keeping interest rates high however long it takes to get inflation back to their 2% target.
Market Update: Dovishness proves contagious
Just how much change a week can bring to markets was amply visible during the last seven days. Last week, we wrote about how negative sentiment in stock markets can turn into a self-perpetuating destructive force for an entire economy as the investing public feels the heat of being poorer (at least on paper). At the end of last week, we look back at pretty much a reversal of the previous week’s perspective after stock markets staged an impressive bounce back. Monday’s rally was still dismissed as an entirely predictable trading-based short-term reversal from oversold levels.