There may be a hurricane in Florida but there are no storms in the US markets with the S&P 500 and the Dow Jones achieving record highs on Wednesday of this week on the improved prospects of a soft landing for the US economy.
The earnings season has just begun in the US and, as usual, we await the results with anticipation, but particular notice will be paid to the outlook from corporate America. This comes as inflation figures were slightly sticker than expected at 2.4%.
China stocks have experienced a whirlwind time of late. A huge stimulus package was met with significant optimism and stocks soared across Asia and indeed, emerging markets. Yet over the last few days, there have been marked swings in stock prices due to a lack of clarity around the stimulus programme. The Hang Seng had its largest one-day fall since October 2008 and on the mainland, the CSI 300 snapped a 10-day winning streak after a 33% rise in September. Questions are being asked whether investors have been hoodwinked by the stimulus package with concerns about the lack of detail. This weekend should reveal more, and markets have edged back up in anticipation with the Hang Seng rising by 2.98% overnight.
Grabbing the headlines is the escalating conflict in the Middle East and there is no doubt it is causing some angst among investors. Yet, as the conflict ramps up, so do global stock markets! The biggest threat to the markets at this juncture, is a rising oil price but even this is not as elevated as might be expected. Later, we’ll touch on the possible implications for markets should matters worsen.
We have just days now before the UK budget and the rumours and conjecture are being ramped up. We have had several conversations about the status of companies, clients selling down investments and crystallising gains at current capital gains tax levels and a flurry of people who want to maximise their contributions into pensions.
A word of caution as always because only yesterday, reports were aired about the possibilities of the amount of tax-free cash being reduced to £100,000. Nothing is off the table, but it really is difficult to plan when we don’t know what we are dealing with. Fingers crossed; whatever changes occur there is a period of grace allowing everyone to ‘get their ducks in a row’. This seems the likely outcome because it will bring much-needed money into the coffers over the next 18 months.
On today’s agenda:
- US stocks reach record highs
- China whirlwind
- What does escalation in the Middle East mean for portfolios?
- Energy independence… not yet!
- Just days to go
- UK shoppers ramp up spending
- Dorset Business Festival
- Summary
US stocks reach record highs
A condensed overview from the Wall Street Journal summed up the mood of the markets.
The S&P 500 and Dow Jones Industrial Average closed at records on Wednesday, with attention turning to the start of earnings season. Third-quarter results season gets underway in earnest on Friday, when several of the largest banks are set to report.
Continues…
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