Category: Market Update
Market Update: Calmer markets ahead of Trump inauguration
With global stocks bouncing back over 2%, last week was the best of the year! UK investors did not even have to rely on a weak pound to bolster Sterling-based returns. French stocks gained over 4%, while smaller cap stocks in most regions have outperformed larger caps – all good signs for broad-based growth.
Market Update: UK bond yield surge – more than meets the eye
Bond market woes took centre stage again last week. Much of this was driven by the strength of the US economy, as shown by Friday's strong employment data and signs that US consumer services are powering ahead (although, interestingly, wages rises were well-contained). We should bear in mind potential political effects, however, which need to be monitored this year.
Autumn Budget 2024 Recap
The Autumn Budget Statement 2024 introduced a range of changes that could significantly impact wealth planning strategies. From pensions and tax adjustments to shifts in the treatment of business and agricultural assets, the statement calls for individuals with substantial wealth to reassess their long-term financial goals. These changes present challenges and opportunities depending on your personal and financial circumstances.
Market Update: Happy New Year!
We start this year with a condensed Market update, sharing with you a few thoughts about some relevant events over the holiday period and the first few days of 2025. Next week, we will be back to the usual extensive format, bringing you a full account of asset class performance for December and for 2024. In the meantime, we show various asset classes (some of which overlap each other) so readers can get an idea of which areas did best and worst.
Market Update: Fed spoils the Christmas Party
Not only did the ‘Santa Rally’ not arrive this year, but global stocks had a notable sell-off on Wednesday night. This came after the US Federal Reserve (Fed) told investors not to expect many interest rate cuts in 2025, a pretty stark change from the giving mood they displayed last Christmas.
Market Update: Don’t fear the rebalance
Capital markets were choppy last week, unsurprisingly. At the end of a very strong year in stock markets, investors typically rebalance their holdings and take profits, so mild selling pressures are to be expected. This absence of a Santa Rally should not be taken as a sign of underlying risk sentiment deterioration. On the contrary, overall risk appetite feels strong – particularly from bullish US investors.
Market Update: Focus turns to Europe
November was a month to remember in terms of news and, for the US especially, one which was positive for economic and market optimism. We cover asset class performance in our usual monthly market review in an article below.
Market Update: Equities and bonds go separate ways
Although developed market equities were calm in sterling terms, stocks were more turbulent in local currencies. France was notably hit by the fragmenting of its ruling parliamentary “alliance”. Emerging markets were even less happy, partly thanks to Trump. Brazil was the weakest, after President Lula announced softer-than-expected spending cuts, threatening future fiscal stability.
Market Update: More and More Loose Ends
We are getting to that time of year when investment houses like us write their annual market outlooks. That is easier to do if the loose threads wrap themselves up before Christmas, but right now the opposite is happening. Uncertainty is growing, and it is creating a wide range of plausible medium-term scenarios. Some of them are very bullish for markets and the world economy, while others are more worrying.
Market Update: Reading Trump’s Tea Leaves
It was an up and down week for global stocks. Markets initially showed confidence in Donald Trump’s tax cut and deregulation agenda – but pulled back when Federal Reserve chair Jay Powell suggested interest rate cuts might have to be gradual. The S&P 500 was flat for most of the week but tumbled this afternoon amid rising bond yields. This came against a backdrop of strong gains last week, a sharply higher dollar and weak equity markets in most other regions.
Market Update: Known winner, unknown outcomes
For the sake of investors, we hoped for a quickly resolved US election, and we got one. Capital markets responded well to Donald Trump’s surprisingly decisive win, with US stocks rallying from Wednesday on. Investors deemed it good news for the US, but less so for Europe and the UK, whose stocks had a tougher week. This side of the Atlantic, equities and currencies sold off and underperformed rampant US markets by a remarkable 5%.
Market Update: US, not UK battening down the hatches
Rachel Reeves’ autumn budget dominated the UK news last week, but global investors were yet again preoccupied with the US election. Both created market jitters for UK investors, culminating in a noticeable fall in global stock prices on Thursday. We wrote theweek before last that traders were bracing for a consequential and uncertain election – which could create volatility as trading volumes thin. That is exactly what we see happening. The good news is that the underlying economic picture has not changed. The bad news is that nerves will stay high until we know who the next US president will be – and we might...
What the Autumn Budget Means for You
Rachel Reeves' first Budget as Chancellor had the rumour mill in overdrive based on the tax uplift required to fill a blackhole in the public finances. The biggest single tax change from the budget designed to address that blackhole was a 2% increase in the rate of employer NICs. Many of the rumoured changes, such as a return of the pension lifetime allowance, changes to pension tax relief, investment incentives for EIS & VCTs or a cap on pensions tax-free cash failed to materialise, which is good news for individuals saving for retirement.
Market Update: Markets in brace position
Capital markets feel more tense than at any point since the beginning of September. Global stocks sold off slightly last week, but without sharp moves. It would be wrong to say that investors are fearful. In general, the global economic outlook is still positive despite geopolitical risks. It feels more like markets bracing for some big events. Britons anxiously await the autumn budget and, after a long build-up of mixed messages, it would help to just get it over with.
Market Update: No news is good news…
Capital markets quietened down last week. Global stocks are up from a week ago, and there is a sense that anxieties are fading. Risks and uncertainties have not gone away completely, but their short-term impacts on risk assets look smaller. There was a lack of bad new news, while the old news seemed less negative. That has allowed investors to focus on more concrete details.
Market Update: Buy the rumour, sell the fact
For a week with so many competing market narratives, global stocks were fairly stable. However, the S&P 500 continues to hit new highs and is doing so as we write. Broadly, US equities were stronger despite higher than expected inflation data, while the UK and Europe are lower on the week (at the time of writing) thanks the effect of dividend payments, currency moves and some policy uncertainty.
Market Update: Global Growth Tailwinds
Rarely do non-US stories dominate global capital markets as much as last week. China announced a double shot of economic stimulus that surprised most – and Chinese stocks surged in response. European equities, particularly luxury goods brands, also jumped, in a hopeful sign of what returning Chinese consumer demand could do for global growth. Strangely, this was accompanied by falling oil prices. That is the opposite of what you would expect, given the (supposedly) improved outlook for global demand and the supply risks from escalating Middle Eastern tensions. The good news is that lower energy prices should themselves support growth....
Market Update: Central bank Pivot 2.0
Central banks dominated the narrative last week. The US Federal Reserve’s (Fed) 50 basis point cut to interest rates was by far the biggest market news, surprising some who expected a smaller move. Investors took the news well, with the S&P 500 reaching new all-time highs in response. Then came the Bank of England’s (BoE) non-decision on Thursday. UK rates were held steady, but Governor Andrew Bailey strongly suggested that they will fall again at the BoE’s November meeting.
Market Update: Market fears fading
Capital markets picked themselves up last week. Global stocks are up, recovering well from a tough start to September. At the time of writing, not all of the week before last’s losses have been recovered, but markets seem to breathe a sigh of relief. This was particularly felt in the US, where stocks gained every day of the week at a remarkably consistent pace. We said before that the early September sell-off felt a little like the one that began at the height of summer – more about nerves than underlying outlook.
Market Update: Nervous markets ahead of second pivot
Capital markets have started September rather despondently. It feels similar to (though not nearly as bad as) the sell-off that started August, after which stock values quickly recovered. There were risks and headwinds back then, but nothing that significantly dampened the long-term outlook. This is even more true now: there are lots of uncertainties, but little that should materially concern investors.