The UK – not quite out of the woods yet

With under three weeks to go to the UK general election, it is looking increasingly likely that the Conservatives will be returned with a majority. They remain at least 12% ahead of Labour in the polls and the gap has if anything been rising, rather than falling.

Thoughts on the UK election

We have recently added to our UK equity holdings, eliminating our longstanding underweight. Although uncertainties undoubtedly remain, our view is that the risk of the two most market unfriendly outcomes – a No-Deal Brexit or Labour winning a majority – is now quite small. With the pound and UK equities both still cheap, we believe a neutral position on UK … Read More

Equities pause for breath

Equity markets ended last week little changed. Investor focus remained firmly on the steady, but often conflicting, stream of sound-bites regarding the state of US-China trade negotiations. While progress remains slow, we still seem on course for a limited trade deal to be agreed eventually. Such a deal will be critical if the market rally over the last month is … Read More

Adding to equities

The ‘risk-on’ move in markets continued last week with global equities rising a further 1% or so in local currency terms, led by Emerging Markets and Asia. Government bond yields also increased with 10-year US Treasury yields now back up to 1.93%, close to 0.5% above their early September low.

Global equities break higher

Following a couple of failed attempts in July and September, global equities finally last week broke clear of their January 2018 high. Importantly however, at least for UK investors, the break higher is only in local currency terms. The recent bounce in the pound means global equities, in sterling terms, are still languishing some 4% below their July high.

Global economy on the turn?

Global equities rose 1.3% in local currency terms last week, the third consecutive weekly gain, and are back testing their 2018/19 highs. Markets failed to break through these levels in both July and September this year and also failed to do so as far back as January 2018. While there has been a lot of volatility in the meantime, equities … Read More

Brexit – the never ending saga

At the time of writing, the UK parliament is once again seemingly poised to vote on the Brexit deal agreed last week by the Government and the EU. With the result still hanging in the balance, the way forward is still far from clear. That said, and at the risk of stating the blindingly obvious, the risk of a No … Read More

How big a Deal – Brexit and the US-China trade war

Last week proved unexpectedly eventful with the agreement of a limited US-China trade deal and the move towards a Brexit Deal. Global equities ended the week up 1.1% in local currency terms although, because of a bounce in the pound, were down 1.8% in sterling terms.

Growth worries undermine equities

The downward pressure on equities continued last week although a bounce on Friday reduced the damage. Global equities are now down some 2.5-3% from the high touched in July and September. This correction so far is rather smaller and shorter than the ones seen in May and August, both of which lasted around a month, saw declines of 6-7% and … Read More