Category: Market Update
Market Update: Bond markets win – again
Capital markets felt a little better in recent weeks, but with emphasis on “a little”. Global stocks gained incrementally through last week, putting most of the November market downdraft behind them. Underlying these moves is a genuine improvement in the economic outlook for next year. Interest rates are now certain to fall again and, even though there have been doubts over US and global growth momentum, corporate earnings have proven resilient.
Market Update: Next stop, Santa Rally?
Capital markets had a good week. Stocks and bonds gained virtually everywhere – particularly small and mid-cap companies. The most obvious rationale for this rally is a growing expectation of interest rate cuts, but we suspect this is just part of investors’ better mood.
Autumn Budget Update: What the Autumn Budget Means for You
Despite Rachel Reeves’ second budget as Chancellor almost being fully revealed by a leak in the Office of Budget Responsibility before it had begun, she set out an economic plan focused on creating a ‘fairer, stronger and more secure UK’ although the general theme was higher taxes that will eventually lead to nearly 920,000 new higher rate tax payers by 2029/30. Speculative rumours in anticipation of the budget included changes to the tax-free pension amount, reducing pension tax relief, inheritance taxation and capital gains, but these were unfounded allowing many to breathe a sigh of relief.
Market Update: And the roller coaster rolls on
Another topsy-turvy week ends with more volatility and lower markets. Stocks were boosted midweek, after investor darling Nvidia reported even better than optimistically expected corporate earnings growth for the previous and current quarters – a rejoinder to the crescendo of ‘AI bubble’ chatter. Nvidia was not even the best of the Magnificent Seven; Alphabet (Google’s parent company) rose as Warren Buffett bought into the company.
Market Update: History does not repeat, but it often rhymes
Stock markets rallied in the early part of last week, but sold off on Thursday and into Friday. At the time of writing, we are at or even below last Friday’s levels in most major markets. The lacklustre performance might seem a little strange considering the biggest news story of the week was an end to the longest ever US government shutdown, after President Trump signed a federal funding bill until the end of January.
Market Update: Bonfire but no rockets
After a pleasingly strong October, it was a tough first week of November in capital markets. Stocks sold off 2-3% virtually everywhere, and the biggest tech stocks were particularly vulnerable. Media commentary put this down to valuation vertigo – investors doubting whether future corporate earnings can live up to the promise of high price-to-earnings stock valuations. That is not quite how we see it, given there was no real new information about the shape of the global economy last week. The only change we observed was the steady deterioration of market liquidity. We keep saying it, but the drying up...
Market Update: Spend, Spend, Cut
Stock markets mostly continued their upward march last week, but the underlying picture is little changed from last Friday. Global growth and corporate profits look decent, geopolitics is not getting out of hand, but the pace of change and a tightening of liquidity also means a risky environment.
Market Update: Uneasily positive
Capital markets started last week calmer than they have been, and ended with yet more all-time-highs. However, investors remain uneasily positive. The mid-week saw more wobbles, and this patch of increased volatility could continue – thanks to tariffs, credit troubles and tighter liquidity.
Market Update: Another Bump in the Road
Global risk assets sagged last week. Initially, stocks bounced a little from last Friday’s US sell-off, after Trump appeared to do a customary TACO turn on Sunday. But, investment portfolios are now closer to where we started October than where there got to Thursday two weeks ago. Thankfully, government bonds prices rose, taking yields (their inverse) down. UK yields fell substantially, helping the government’s budget calculations.
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.