Markets took a dive in December, but we think panicked investors may have got ahead of themselves. Chief investment officer Julian Chillingworth explains why things are relatively ok for global growth, but perhaps not so much for the UK.
Today Theresa May has to present her alternative Brexit plan to Parliament. Facing a hostile House of Commons, the Prime Minister says she won’t do so. Instead, she will reiterate that she is continuing to negotiate with the EU in a bid to unpick the Gordian knot of the Irish backstop. In a chilling echo through time, while Mrs May was trying to shore up support among English Brexiteers a bomb blast shook Londonderry. An IRA splinter group took responsibility. According to one version of history, Alexander the Great untied the impossible knot by cutting it.
Witnessing a former great fall from grace is never pleasant viewing. When it is an ex-bond market darling, and you are watching its credit rating fall away from top-notch AAA to the opposite end of the investment-grade scale, it makes very painful viewing for bondholders. This has been the fate of General Electric (GE), the largest company by market capitalisation earlier this century, and its bondholders in 2018.
Rising life expectancy, decreasing home ownership, unfunded government spending, lower investment returns and inadequate private saving are making it less and less likely that younger generations will retire when their parents did.
Concerns about a worldwide slowdown in growth have made for a rotten time in markets over the past six weeks or so.
Global stock markets have been unsettled by political and economic uncertainty recently, and swung significantly between gains and losses in the final weeks of 2018. President Trump’s criticism of the Federal Reserve’s latest interest rate rise added to concerns that US consumer demand may be cooling. Meanwhile, trade tensions between America and China continue despite a temporary truce.
Our latest article in the Too Poor To Retire series explains what’s making younger generations less well off than their parents