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.
Autumn Budget 2024 Preparation
On 30 October, Chancellor of the Exchequer Rachel Reeves will deliver the Autumn Budget Statement 2024, accompanied by a comprehensive fiscal statement from the Office for Budget Responsibility (OBR). This significant event comes as the new government, elected to boost economic stability and growth, takes its first important step in addressing the nation's financial health.
September Team News 2024
In our last blog we explained that Joe was leaving us for a new life in Canada with his girlfriend, we gave him a good send off, which included, team building clay pigeon shooting, dinner in a country pub and of course the mandatory send-off drinks. He’ll be much missed and we wish him all the best in his future adventures.
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.
Minimise Inheritance Tax
Effective planning reduces Inheritance Tax (IHT), enabling your loved ones to benefit more from your wealth. Estates above £325,000 (2024/25 tax year) may be taxed at 40%. Strategies to manage this include using IHT allowances and more advanced options like forming a company with your heirs as shareholders.
Market Update: Balancing acts
It was a flat week for global stock values, but with a fair amount of dispersion. US returns were once again weighed down by tech, but the UK and Europe are up over 1% at the time of writing. The overall sluggish picture seems a strange reaction to supportive comments from US Federal Reserve chair Powell and a healthier than expected US economy, but markets are chewing on a few things.
Market Update: Late Summer heatwave
Equity and bond markets got hotter earlier last week. Jerome Powell all but confirms the start of rate cuts, but the US dollar is no longer a beneficiary.
State Pension Awareness
In April 2024, the state pension rose by 8.5% to £11,502.40 a year for post-2016 retirees. However, according to new research, one in seven (14%) retirees receive less money from the state pension than expected. This highlights the need for more information about the payments people can expect to receive from the government later in life.
Market Update: Tornado rather than hurricane
After stocks sank in early August, we warned that volatility could ripple on, and the market storm turn into a full-blown hurricane. But last week saw a remarkable dying-down of the volatility, like a whirlwind that passes in an hour: stock markets climbed up all over the world, with no hint of pullback. The rally has been so strong that global stocks are almost exactly where they were at the end of July – before the sharp sell-off.
The Essential Guide to Financial Protection
Nobody wants to consider what would happen if they became too ill to support their family financially. Financial protection is essential to creating peace of mind for your loved ones, but understanding what cover you may need can be confusing.
Market Update: Market correction turns into pothole
Our sign-off the week before last was supposed to be cautiously optimistic – predicting a bumpy ride to a decent destination in markets – but friends told us it read a little negatively. Cue the worst daily loss for the S&P 500 in nearly two years on Monday after a terrible session in Japan, and sharp losses for most other major indices. US recession fears – stoked by a distinctly disappointing jobs report last Friday – formed the backdrop for the sell-off, however, market liquidity concerns emanating from Japan’s actions were the spark.
Market Update: Central bank week
Interest rate policy reflects the differing, yet interconnected, pressures within leading global economies, while signs of a softer US economy make investors impatient for Fed cuts.
Placing Assets Into A Trust
Trusts are a powerful tool for estate planning, providing flexibility and control over asset distribution. Properly structured, they can address various scenarios and requirements, ensuring that your legacy is managed according to your wishes long into the future.
Market Update: Don’t fear the rebalance
Investors moving capital from Mag7 for smaller companies makes for bumpy markets, but a shift towards general bearishness is misplaced.
Market Update: Shock, rotation, growth?
Amid shocking global events, the market rotation from large to small cap stocks continues. Will the positive effects for small caps be enough to outweigh the wealth losses for the tech giants?
Market Update: Lower inflation, less profits?
Last week was an interesting week in capital markets. Global stocks are a nudge above where they were last Friday in aggregate, but this hides a great deal of variation. There was a steady climb early in the week, led once again by large US mega-caps, but this completely flipped into the latter days. Smaller stocks suddenly dramatically outperformed, while the so-called ‘Magnificent Seven’ (Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, Tesla) sold off sharply.
Market Update: New government, same economy
Keir Starmer was not wrong when he called this an historic victory. It is the Labour party’s first election win since 2005, ending 14 years of Conservative rule and handing the latter party its worst ever defeat. The results were emphatic, but full of contradictions. Labour won one of the largest parliamentary majorities in history with the lowest ever winning vote share. Britain’s right-wing party collapsed, but the Reform party outflanking it, surged. The new government crushed the old by emphasising the need for change, but its policy agenda emphasises stability and continuity. And the contradiction most relevant to us...
DPMS Portfolio Commentary August 2024
With a generally positive Q2 now firmly in the rear-view mirror, we are focusing on looking forward to a more accommodating picture for monetary policy for the remainder of 2024. Interest rate cuts are expected across developed markets as inflation starts to ease with growth prospects expected to improve as debt costs fall.