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Hi all,
In a rush trying to get everything finished up for the weekend, but our friends over at Canada Life have kindly provided us with an excellent summary of George Osborne’s latest budget.
There are some important changes so it’s well worth downloading these valuable PDFS and even printing them if you so wish.
Here they are for you…
Until next time, got to go, or my wife is sure to be on my tail, I’m late for my tea!
Measured progress
There is much to be gleaned from the performance of markets over the first quarter of 2011. Ever since equity markets hit their most recent low point in March 2009 many have questioned the rationale for and the resilience of the rises in global share prices, arguing that markets were in denial about the continued parlous state of Western economies and their financial systems. Over the early stages of this year however, markets have withstood the very considerable headwinds of high inflation in both developed and developing economies, tightening monetary policy across most of the world, an oil price at near record levels, widespread civil unrest across much of North Africa and the Middle East, plus the Japanese tsunami and associated radiation leaks. A mere twelve months ago it would have been inconceivable that markets could have absorbed all of these with barely a wobble; but despite the Japanese Nikkei Dow Index registering its worst two-day fall since the crash of 1987 in the immediate aftermath of the Fukushimanuclear incident, that is what we have seen. This shows a large and significant increase in confidence.
In many ways this has been a very old fashioned start to the year. America has taken up the running in terms of both equity market performance and economic growth. With the notable and considerable exception of the housing market, the world’s largest economy is in robust health. The two key monthly indicators of economic activity that we use, the Institute of Supply Management surveys for both Manufacturing and Services, have been showing impressive growth for many months. Importantly the most
widely used measure of employment, non-farm payrolls, are at long last registering steady if unspectacular job creation and the rate of unemployment has fallen below 9% (source Bloomberg). The one remaining cold spot is the housing market. Sales of both new and existing homes are at rock bottom levels and, although the magnitude is still small, average house prices have fallen for the past seven consecutive months (source Bloomberg). It may be that housing will be the last domino to rise in this economic cycle; affordability is the best for a decade and employment is rising, but neither will drag prices upwards until the overhang of oversupply is dealt with.
You can download this Market Commentary as a PDF file by clicking here or continue reading online
The speed at which markets can shift direction is a constant source of amazement. It was only last autumn that the great fear was that the western world was following Japan into a multi-decade period of low growth and persistent deflation. Debts had to be repaid, it was argued, and the only way for this to be done was slowly and steadily. And until this was done there was no basis for a resumption sustainable growth in the UK, United States or Europe. But now this is all forgotten. Markets are instead abuzz with inflation, food prices, commodities and the timing of interest rate rises. There are no guarantees that this phase will last any longer than the previous Japanese obsession and we expect that these sudden and severe changes in sentiment will characterize the year ahead. We thus retain our diversified strategy, leaning towards a cyclical recovery but not to the exclusion of any other potential eventuality.
The trends in markets we are seeing in the early stages of 2011 can be traced back to the announcement of the restarting of quantitative easing in the United States last autumn. Since that time we have seen investors globally rebuilding their protection against inflation; prior to then the relative valuations of equities and bonds showed that deflation was seen as the greatest threat facing markets. UK equities yielded more than gilts for the first time since the 1950s, other than at the bottom of the market crashes in 2003 and 2009. This time it was not the result of the text book irrational selling at the bottom of a crash, but came instead from the lowering of bond yields. The Federal Reserve Bank’s insistence however that it will add up to $1 trillion to its purchases of treasury bills has shaken investors’ confidence in these extreme valuations. Almost to the day of the announcement we have since seen equities given renewed life, commodities surging, bond yields rising and gold underperforming.
You can download this Market Commentary as a PDF file by clicking here or continue reading online
The tortoise and the hare
It is a year of fine margins. The unexpectedly excellent September has turned a potentially poor third quarter into an excellent three months for both equity and bond markets. For a change, the UK has led the way with the FT All Share rising by more than 12% since the start of July, though the US was not far behind after the 10% increase in the S&P 500 Index. The high single digits seen in many European bourses are also impressive. Emerging markets have again been impressive, led by the rise in the BSE Sensex, the main index in India, to over 20,000 for the first time since its brief nudge over this important level in early 2008. The lesson of the year to date though is to tread very carefully. Each time markets have given clear signs of being set for a significant move up or down, they have very quickly executed a volte face and our optimism is thus tainted with both scepticism and caution.
This monthly financial commentary is available to download or read online as a PDF file.
Please click here for this financial market commentary , by kind courtesy of Williams de Broë
Hi Folks,
it’s a busy, busy Monday but I thought I’d just get this out to you before I go for lunch. I’ve just finished putting the touches to my latest Finance Guide.
It’s called ‘The Salary Sacrifice Insight’. I hope you do find it just that – an insight.
Salary Sacrifice is at it’s heart a simple solution which is helpful to both companies and their staff too. If you’ve a group pension and you wish to encourage take up in it, or you’re an employee and you just want to gain an understanding of exactly what salary sacrifice is it’s worth reading this 11 page page report. You can download it on the link below.
You won’t have to enter an email address either, just click on the image on the next page and your download starts.
www.williamgeorge.info/salary-sacrifice
Alternately fill out the form below…
Here is an interview William gave on BBC Radio Scotland where he spoke with Fred MacAulay and Karen McKenzie about Cash and Investment ISA's
Listen to the BBC show here
