Market Update: Mood Swings
For some time, bond and equity markets have been experiencing teenager-like mood swings. As February ended and March began, government bond yields continued their march higher to levels last seen last autumn, when stock markets tumbled as a result. Yet this time, stock markets have ricocheted between optimism, namely the surprising resilience of consumer demand and resulting relative company earnings stability, and pessimism that the same economic resilience will keep inflation pressures high, forcing central banks to keep raising rates higher for longer, which undermines valuations and said resilience.
Time for a tax health check?
Personal tax planning should be at the top of your agenda as the end of the current tax year is not too far away. Taking action now may give you the opportunity to take advantage of any remaining reliefs, allowances and exemptions. At the same time, you should be considering whether there are any planning opportunities that you need to consider either for this tax year or for your long-term future. We’ve listed a few reminders of the issues you may want to consider as worthy of including in your 2022/23 tax health check to-do list.
Market Update: Balancing Acts
Last week has seen global stock markets give back a portion of the gains made in the first few days of February. Still, since the start of the year global stocks have made a total return of around 5% in £-sterling terms (Source: Bloomberg)...
Market Update: A dose of realism creeps in
Last week, the UK’s leading stock market index, the FTSE100, finally passed the psychologically important threshold of 8,000. And yet, after the strong start to the year in January, February has brought consolidation rather than a continued uptrend.
Market Update: A challenging week brings investors back down to earth
Overall, UK bond and equity markets slipped back last week, despite the FTSE 100 edging higher until Thursday lunchtime when it reached a new all-time price high of 7494.57. Since last week’s US employment data, the asset market rally has had a key component weaken. In January and early February, investors had spied a decline in longer-term inflation pressures, but investors have become less sure in recent days.
Guide to Individual Savings Accounts
Time is running out to take advantage of this year’s Individual Savings Account (ISA) allowances. On 6 April when the new tax year starts, if you haven’t used all of your or your children’s ISA allowances from the previous tax year, it will be lost forever. Check out this guide to Individual Savings Accounts.
Market Update: Are central banks transforming from hawks into doves?
Last week has been like the other four weeks of 2023: dominated by central bank action, inflation, and despondency over the UK economy. Meanwhile, stock and bond markets stayed buoyant. The monthly US jobs report could have upended the week but so far, after a brief market wobble, much of the week’s gains have been retained (we write before the close of trading). Indeed, the FTSE 100 may even close at a historic high today.
Market Update: Goldilocks in the air
Recent macroeconomic data releases across the western world report declining rates of inflation and no longer overheating (but nevertheless still positive) economic growth. In the US, the important milestone of the rate of personal consumption expenditure inflation falling below the interest rate has been reached. Perhaps unsurprisingly then, the term ‘Goldilocks’ (not too hot, not too cold) has returned to the market narrative.
Market Update: PPI pullback and the ‘new normal’ for inflation
Judging by capital market expectations, we are over the hump. The global inflation crisis of the last year-and-a-half has peaked, and price increases are now expected to trend downward in the US, UK and Europe. US Treasury yields have fallen consistently since the beginning of November and are now back to where they were in September – just before the world had a UK-inspired bond rodeo. This implies lower growth and price expectations in the years ahead, and comes on the back of a 6.5% December annual inflation reading in the US – its lowest in more than a year.
Market Update: Football fever saves UK from recession
The new year is proving to be a happy one for almost all asset classes and regions. The FTSE 100’s intraday all-time high of 7903.50 is less than 100 points away at the time of writing, and we’re closer than we were last week. The global financial press tell us markets are stronger because we should be positive about a likely easing in monetary policy, and this easing should take place because – as business leaders say – conditions are awful.
Market Update: January Surprises
“Welcome to 2023” said the note on the restaurant door. The door was shut, the lights were off, and another note explained that rail strikes meant staff and customers were unable get there. All the venues in this City-of-London street were closed in a scene reminiscent of the height of the 2020 lockdown. Life can be tough in the battle for a fair share of the economy’s revenue flow, and we cannot have been the only ones left feeling that the UK is off to one of the most subdued starts to a new year we can remember.
Market Update: Central bank scrooges cancel Santa rally
In our opinion, it's too early for the developed world’s central bankers to say the battle against inflation is nearing an end, even though year-on-year inflation has started to move off the peak. Inflation rates published this week show they may have peaked in aggregate, but consumer prices are still heading generally higher, which is likely to also keep inflation overall higher for longer.
Market Update: Fed up before Christmas
One of the first principles of any sound investment process is to permit and nurture the discourse of differing opinions in order to generate the most robust insights and decisions possible. Unsurprisingly then, this is exactly what has characterised this year, as we have absorbed various guidance and deductions regarding possible underlying reasons for asset price movements. As the year comes to a close, some of the year’s big trends have showed signs of stopping or even reversing, and we have debated the ‘reasons’ for those changes vigorously. This process is important because we must understand the past and the...
Investing for Positive Change
Over the past few decades, there has been a growing interest and awareness in investing in companies that take into account environmental, social and governance (ESG) factors. This type of investing – also known as sustainable, responsible or impact investing – aims to generate both financial returns and positive social and environmental impacts.
Market Update: Markets give thanks
The last week of November is generally a quiet one for markets. Many professional investors head back to family homes in the days before Thanksgiving, and will have already closed down their risk positions for the year. Few like to be exposed to markets when there are lower trading volumes in December, and this may be one of the reasons why US equity markets tend to enjoy a seasonal boost in the last quarter.
Market Update: Plugging the holes
The Autumn Statement, budget-in-all-but-name, had been sign posted as very likely to bring bad news to UK taxpayers, as the third Conservative government of this parliament changed course from Trussonomics back to Rishinomics. What was announced in the end was less bad than what had been leaked beforehand, which is how bad news tend to be sold. With fiscal responsibility returning to the UK, and with it a certain predictability in policymaking, this Autumn ‘budget’ was perceived as quite sensible from a capital market perspective with sterling and bond yields closing within their most recent trading ranges.
2022 Autumn Budget Highlights
Jeremy Hunt delivered his first statement as Chancellor of the Exchequer at a time of great challenge for the UK and global economies with the backdrop of sky-high inflation, recessionary warnings, high interest rates and the ongoing war in Ukraine. In his first few days in office, he had already reversed most of the measures announced in his predecessor's September Mini Budget. He has now set out a series of tax rises and allowance freezes & cuts to help combat the ‘black hole’ of public spending set out in the September mini-budget.
Market Update: Signs of ‘peak inflation’ emboldens markets
There were three big market-moving stories last week: the US midterm elections, the latest crash in the surreal world of crypto currencies, and the release of US inflation data for October. By Friday, it was the lower-than-expected inflation data that dominated in terms of market activity.
DPMS Portfolio Commentary November
As we are expecting the remainder of 2022 to remain volatile with further interest rate hikes and the effects of a recession, the Vizion Wealth Investment Committee have agreed to remain maintain a more defensive style to portfolios, further reduce exposure to Small-Cap Equities, balance our Chinese & Indian Equity exposure and start to increase positioning towards traditional fixed interest given the recent sell off of bond capital values.
DPMS Portfolio Commentary March 2023
March 2023 has been somewhat of a rollercoaster ride as investors have processed a variety of information, led by markets absorbing news of a number of bank bail outs started with the run on Silicon Valley Bank (SVB) and smaller New York based Signature Bank and the impending impact on interest rate policy led by the US Fed.