Category: Market Update

Market Update: The flipside of inflation – growth

Of late European stocks are outshining their US peers even though Europe’s economies are mostly in recession – are diverging interest rates coming?

/ 18th March 2024

Market Update: At least currency markets notice the budget

Currencies proved to be the one mildly exciting market dynamic in a week otherwise shining more with what did not happen, rather than with what did.

/ 11th March 2024

Market Update: Winners and losers of stabilising yields

The ECB meets this week, and the BoE in two weeks’ time. Interest rate and yield volatility has calmed amid signs that some can now bear the cost of new debt. Is this a sign that we’ve reached an equilibrium?

/ 4th March 2024

Market Update: M&A activity sets growth against value

Consumer confidence is yet to catch up with business sentiment which is now driving a flurry of value seeking mergers and acquisitions.

/ 26th February 2024

Market Update: UK not growing really, not growing nominally

The UK has had no real growth for two years but last week’s 2023 Q4 GDP data confirms a slight recession. Should the Bank of England respond?

/ 19th February 2024

Market Update: US stock market entering bubble territory?

With the S&P500 US stock index breaking through the 5,000 mark for the first time, we discuss parallels to the dot.com bubble from 25 years ago.

/ 12th February 2024

Market Update: Central banks challenge Goldilocks assumptions

The apparent acceptance of later rate cuts kept markets going during January, but may be put to the test in February as US regional banks creak, once again, under the increased cost of refinancing.

/ 5th February 2024

Market Update: Positive growth sentiment returns

January is beginning to shape up rather nicely, after both positive growth sentiment as well as surplus liquidity staged a welcome return

/ 29th January 2024

Market Update: Data vs Davos

Was it the latest market data making early and substantial interest rate cuts unlikely, or the latest ‘news’ from leaders gathered in Davos, that caused bond yields to rise once again?

/ 22nd January 2024

Market Update: A bumpy upwards path ahead

After the recent rally valuations feel elevated, yet the biggest risk to them is not whether the economy will grow again, but rather how fast.

/ 15th January 2024

Market Update: After the party, the hangover?

Following the impressive Santa Rally markets started 2024 on a less euphoric note, is this simply a correction from overbuying, or a genuinely bad start?

/ 8th January 2024

Market Update: Central bank Elves boost 2023 Santa rally

The scrooges of last year’s Christmas, US central bankers, put markets in a warm festive mood this week by surprisingly declaring ‘peak rates’ - is the US getting ahead of Europe and the UK once again?

/ 18th December 2023

Market Update: A bit of a downer

We review November’s cheery asset performance below. Early December is also currently on a positive track and trading volumes have been higher than November’s averages generally, suggesting quite a bit of capital is being put to work by investors. 

/ 11th December 2023

Market Update: Higher for shorter on the horizon

As we have written here over the past weeks, the distinct turn in sentiment that drove markets in November was, once again, mostly about central banks and the likely path of interest rates. After October was about ‘higher for longer’, early November transitioned to ‘no more rate rises and the next move is down’, when inflation came down far more than most had expected. In this past week, we have heard discussions of Eurozone rate cuts in time for Easter.

/ 4th December 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).

/ 27th November 2023

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.

/ 20th November 2023

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.

/ 13th November 2023

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.

/ 6th November 2023

Market Update: The resilience narrative comes under pressure

A potentially meaningful change in correlations happened last week. In recent times, a fall in yields (and therefore a rise in bond prices) would go alongside rises in equity prices, particularly the mega-cap growth consumer-related techs like Amazon, Alphabet (Google), Microsoft and Apple.

/ 30th October 2023

Market Update: Bond yield volatility has markets guessing

While we hold our breath over the Middle East tragedy, markets return to interpreting if bond yields are just enough to eradicate inflation or if their volatility points to something bigger.

/ 23rd October 2023