Category: Market Update
Market Update: Healthy market rumours
Stock markets keep pushing at all-time highs earlier last week, but with less enthusiasm than a few weeks ago. Then, late on Friday, a renewed Trump tariff threat against China’s rare earth export restrictions was enough to immediately send markets down 2%.
Market Update: Market momentum reigns
Global stocks bumped up last week, recovering all of the previous week’s losses and then some. That is despite a US government shutdown that shows no sign of being quickly resolved. Previous funding gaps have hurt the world’s largest economy, but markets are choosing to ignore the noise. With politics no longer driving markets, corporate profits will almost certainly take the wheel.
Market Update: Markets wait for what’s next
Global stock prices have dropped last week, with most regional markets ending down. Some of this is end-of-quarter rebalancing of institutional portfolios. Institutional investors typically adjust their portfolios back to the original risk weights, a process which is equivalent to taking profits on the better performing assets. So, given the very strong equity rally over the last three months, it is predictable that equity markets will struggle as we head into the last week of September.
Market Update: Slowdown? What slowdown?
Rate cuts and record highs for markets last week. As wholly expected, the US Federal Reserve voted to decrease interest rates by 0.25 percentage points to 4% (the effective rate is about 4.1%), and signalled further cuts before the year end. The Fed gave investors what they wanted, leading to gains for small cap stocks in particular. The Bank of England was less forthcoming on Thursday – holding interest rates steady – but it announced some welcome adjustments to its bond selling program. All in all, this environment is very supportive for global stocks.
Market Update: Bond’s Split Personality
It had been another slightly confusing week for some investors. Markets mulled over last Friday’s weaker than expected US jobs report, but stocks kept climbing higher virtually everywhere. There were two big market action stories: a sizable fall in long-term government bond yields, and the outperformance of small cap stocks. These trends might seem in conflict but we think they are consistent.
Market Update: Damp back to school week
The ‘Back to School’ week often gets a lot of attention. Traders return from their holidays and reassess their market outlooks. So, after the summer’s strong equity rally, it is no surprise that investors are doing a bit of soul searching. There is no shortage of economic or political narratives to latch on to this week, but in the end relatively little change in stock markets to report. Most major indices are roughly where they were last Friday.
Market Update: Stock market consolidation for now
Markets have had another relatively quiet week. The news, on the other hand, was full of debt panic and more Trump destabilisation. As noted in the past few weeks, investors seem to have become desensitised to these events. The things traders typically care the most about – important updates to company earnings and interest rates – had more muted consequences than usual. When markets rallied earlier in the summer, commentators sometimes strained for an explanation. We now have plenty of explanations – but not much market movement that needs explaining.
Market Update: End of the smooth summer ride?
The Bloomberg World stock market index has gained 0.5% for the week as we write, bond prices are mixed (UK yields are up). Underneath that, US large cap stocks did less well, while China and the UK have risen, to the point where the FTSE 100 continues to make new all-time highs. The broader financial media came up with a number of explanations for the different moves, but from our vantage point of view we are not convinced that it was much more than a typical summer lull. The exception from the norm is that this one comes after a...
Market Update: Earnings trump Trump
The good times keep coming for global stocks. This week, markets’ optimism was backed up by a fundamentally bullish outlook – the continued improvement of corporate earnings expectations in almost all major markets. And, with US interest rate cuts even more likely, small and mid-cap stocks joined in the fun.
Market Update: Poor Switzerland, poor statisticians, oblivious investors
After last Friday afternoon’s wobble, markets regained their footing. Global stocks mostly recovered and are back within touching distance of all-time highs. Investor sentiment was aided by the slew of US trade deals – either signed or pending.
Market Update: Markets revisit risk-off
This has been one of the busiest weeks for potentially market moving information in a long time. We’ll start with market moves, and see what that tells us about the way in which the information has added up, and what are currently the most important factors.
Market Update: A $500bn sweetener from Japan
Last week had lots of quite important information but no single aspect has dominated. Equity markets are higher again, bond yields are stable and companies tell us that, on balance, things are difficult but okay. US retail investors are choosing to back riskier “meme” stocks. June’s UK consumption growth was soft and government finances remain under pressure, partly because people are choosing saving over spending.
Market Update: Flowing with the tide
Markets keep rising steadily and gently, on an incoming tide of liquidity. Investors appear to have plenty of cash and are happy to deploy it into risk assets, largely thanks to expectations of interest rate cuts. Both intraday and day-to-day stock market volatility (average price movements) are back to lows. Markets are also increasingly optimistic about economic growth, especially in the US. If that sounds like the exact same description as last week, that is because it is. Markets’ summer love-in continues.
Market Update: Trump turns nasty; markets turn nice
It felt like the first week of summer holidays. Stock market volatility dropped again – both in measured and implied terms – and the 9 July deadline on Donald Trump’s tariff moratorium was no deadline at all. The US president pushed back tariff implementation, initially warning 14 countries (mostly in Asia) that they will face higher import taxes unless trade deals are signed by the start of August. Today, he expanded those threats to Europe and Canada.
Market Update: Markets bask in the sunshine
Sunshine and all-time highs last week. US stocks started their 4th of July holiday in fine spirits. Encouragingly, smaller and mid-cap American companies have outperformed the ‘Magnificent Seven’ tech stocks over the last fortnight, and were buoyed again by Thursday’s strong jobs market report. It got lost in all the negative coverage of UK politics and bond troubles but, remarkably, our equity market set a new all-time high too.
Market Update: Markets recalibrate to Trump 2.0
What a week. No sooner had the US shocked the world by bombing Iran’s nuclear facilities than President Trump declared a ceasefire and subsequent end of the Israel-Iran war. More astonishing still was that the Israeli and Iranian governments obeyed, albeit only after their strikes made ‘the Donald’ lose his rag in the most unpresidential manner the White House lawn has ever witnessed in public.
Market Update: The risks are real – but priced in
We have, unsurprisingly, had a bit of a down week. The Israel-Iran war has pushed up oil prices about 4%, with a slight knock to equities. The ‘safe haven’ dollar has risen but only slightly, up 0.5% against a stable sterling. None of these moves were too sharp – barring perhaps oil’s gain – and it is fair to say that the market reaction has been more muted than the human one. Experience of the Russia-Ukraine should caution us against thinking this will be over quick or that markets will be insulated, but it does seem like many of the...
Market Update: Calm but not comfortable
Last week’s political events did not disturb markets until Israel’s military action on Iran on Friday morning. Even then, the reactions were relatively muted. In the days prior, Brent crude oil rose from $66 per barrel to $70 but other markets showed no discernible price reaction. Investors seem to be waiting for the actual event before deciding to move, as many past rumours have been nothing more, while much else can happen while one waits.
Market Update: Summer starts with less spring
Last week, a number of the world’s stock markets edged closer to all-time highs. Thursday’s Musk-Trump spat weighed on Tesla shares, though, and therefore the US’ S&P 500 (and the ‘Magnificent Seven’ tech stocks in particular). Fortunately, other than entertaining the general public and knocking Tesla’s share price, there seems to be limited investment impact.
Market Update: Complacency or checks and balances?
Last week’s pullback proved to be just a blip in the impressive stock market recovery. On tariffs, markets were buoyed in the early part of the week by the notion of the so-called “TACO trade” (Trump Always Chickens Out) and then, on Thursday, the US Court of International Trade’s ruling that the tariffs already imposed were illegal – though an appeals court quickly suspended the decision, allowing tariffs in the meantime. The trade court’s ruling made markets happy but Trump angry, as did the TACO epithet.