30th September 2019
Ominous US-Dollar strength
The unprecedented events unfolding in UK politics this week will have distracted many UK investors from developments in the wider world. But those global developments may well carry far greater significance for near-term return developments than the latest ructions in Westminster.
One of the week’s most notable trends has been the strength of the US$. The dollar has gained around 1.2% against the €-Euro since the end of last week alone, and a similar amount against most other major currencies (with the notable exception of the Japanese ¥en).
Quantum computing breakthrough: supremacy achieved
Away from the usual market gyrations this week, something historic occurred in the computing world. Investors may come to remember 2019 as the birth of the quantum computing age, an era that could have profound longer-term implications for the global economy in terms of cryptography, computing power, telecommunications, finance, modelling and things we cannot yet imagine.
All eyes on US – China trade truce
It was a disappointing week for economic news. Purchasing Managers’ Indices (PMIs) – measuring business sentiment – were less than spectacular the world over. Particularly disappointing were the numbers for the services industry, which came in below expectations in the US and across the Eurozone. Manufacturing sentiment, which has long been languishing in contraction levels (below a 50 reading), actually registered a positive surprise. But the fall in services means the overall picture for businesses looks dreary.
Insight article: Property investing
Because of the slow nature of property sales, open-ended property funds are among the most illiquid “liquid” funds around. This, unfortunately, can lead to rapid declines when investors get scared.
That is exactly what has happened this year, with UK property funds seeing outflows of around £2.2 billion in the first seven months. £417 million of that came in July alone. But interestingly, two funds accounted for 89% of July’s outflows.