Financial Advice in London Blog

The Fed will make its next interest rate decision known on Wednesday. The market is pricing in a near certainty of another 0.25% hike. The European Central Bank is also expected to raise rates by 0.25% this week. Investors will be most interested in what Fed Chairman Jerome Powell and ECB President Christine Lagarde have to say after the announcements.

Full report
https://realmim.com/fed-and-ecb-expected-to-raise-rates-again-this-week/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Most global stock-markets rebounded strongly last week from losses the previous week – certainly in Europe and especially in the US after the release of improving inflation data and better-than-expected earnings reports from major US companies.

US CPI data came in at 3%, its lowest level since March 2021 and slightly better than expectations. This reduces pressure on the Fed to keep hiking although the market is still pricing in 90% odds that the central bank will hike again later this month. Even so, looking further out the market now sees less chance of further hikes. More evidence of lower inflation came from US Producer Prices data which showed a 0.1% increase – the lowest in nearly three years.

Full report
https://realmim.com/inflation-data-leads-markets-higher/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

All major global stock-markets were lower last week apart from India which managed to gain slightly. Bond yield rose, commodities were mixed but generally higher.

The monthly private payrolls report from ADP (a giant US payroll processing company) showed that 497k US jobs were unexpectedly created in June – well above forecasts. This is why the US 10yr Treasury yield jumped above 4% last week for the first time since March. At the same time the yield on the UK 10-year gilt rose above 4.7%, the highest since October 2008.

Full report
https://realmim.com/jobs-and-services-data-will-keep-fed-on-their-toes/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Last week the Bank of England surprised markets by lifting interest rates by 0.5% (0.25% was expected) – its 13th consecutive hike. The UK central bank said they would lift rates higher if inflation pressure continued. This followed the release of UK inflation data earlier in the week which showed CPI at 8.7% in May which was unchanged from April and higher than market expectations.

Full report
https://realmim.com/markets-anticipating-falling-inflation-in-the-us-but-slowing-economy-too/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 16th June 2023

Global stock-markets were higher last week after the US Federal Reserve left interest rates unchanged but the Fed made it clear it plans to hike rates further in months to come. By how much and when will depend on inflation data which will determine “the extent of additional policy firming that may be appropriate.” Chairman Powell said it would probably be “about a couple years out” before rates might be cut.

Full report
https://realmim.com/pound-and-gilt-yield-higher-ahead-of-boe-decision-this-week/

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’

Market Review from Realm Investment Management – week ending 2nd June 2023

Stocks in Europe were broadly flat last week but the US had a strong week following the approval of the debt ceiling agreement.

US equities had a strong end to the week despite Friday’s payrolls report which showed the economy added 339,000 jobs in May. The number was much higher than expected and continues to indicate a tight labour market suggesting the Fed may not have room to cut rates any time soon.

Full report
https://realmim.com/market-focus-back-on-inflation-and-rates-after-agreement-reached-on-debt-ceiling/

Market Review from Realm Investment Management – week ending 19th May 2023

Stock-markets rose last week on positive corporate results and hopes that the US debt ceiling issue will be resolved over the next few days. In the longer-term there is also increasing optimism that the Fed will start cutting rates later in the year. The German DAX index was the stand-out performer last week, reaching an all-time-high.

Re the debt-ceiling countdown: a meeting on Friday night brought no agreement from negotiators but today (Monday) President Biden is due to meet Republican Kevin McCarthy in a further attempt to resolve the issue.

Full report:
Debt ceiling drama still to play out

Disclaimer: ‘Where the business has expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. The information contained within this communication is believed to be reliable but Realm Investment Management Limited does not warrant its completeness or accuracy.

This communication is not intended as a recommendation to invest in any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. The information provided is for illustrative purposes only, it should not be relied upon as recommendations to buy or sell investments.’