Stock markets conditioned to run on central bank support

Bank

Market movement Stocks and oil prices fell on Thursday after the U.S. Federal Reserve intimated it could soon cut back its support An increase in the spread of covid-19 delta variant, signs of Chinese economic weakness and the Taliban’s takeover of Afghanistan also spooked investors. FTSE 100, Dow and S&P 500 FTSE 100 was down 1.5% in afternoon trading. The Dow Jones fell 86 points at the open, while the S&P 500 lost 0.40%. Later, Nasdaq and S&P 500 eked out small gains. U.S. markets % change Value Change Dow…

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Talk of Inflation and a Stock Market Bubble gain traction

Inflation

Is inflation becoming the real test of market durability in 2021? Inflation, during these times, is an unknown quantity, even an unspoken term from times past, something to talk about . But it may soon make a fresh appearance in world economies, and when it does, the fledgling world economic recovery will likely suffer again, despite all of the financial support ploughed into the ‘system’. The pressure on interest rates to rise again will increase. Something has to go pop! Central banks Our current batch of Central bankers pretty much…

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The Bank of England increases UK economic support by £100 billion

Quantitative Easing

More QE The Bank of England announced Thursday, 18th June 2020 more support by increasing QE – Quantitative Easing by injecting a further £100 billion into the UK economy. This increase brings the total to £745 billion. Bank policymakers voted 8-1 to increase the size of its bond-buying programme and said there was evidence that the UK economy would be impacted less than initially feared. The Bank said more recent indicators of economic activity suggested the economy was starting to bounce back. It was reported that there had been a…

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UK national debt soars

Historic debt level

Doom and gloom? The Organisation for Economic Co-operation and Development, (OECD), has warned that the effects of the pandemic will be far reaching and will likely hit the UK harder than other comparable major economies. As the OECD reports of a very slow and difficult recovery for the UK, we are also reminded that UK debt has now reached historic levels. The World Bank and the IMF have voiced their opinions about debt too. And not wishing to be left out of the doom and gloom discussion, the CBI inform…

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Gold, a solid investment

Gold Reserves

Gold as a safe haven It is a well known fact that gold becomes a safe haven during uncertain times, and these are uncertain times. So it’s no surprise then that gold has increased in value during this period. At its highest in recent weeks, gold has reached: $1766 per troy ounce. Governments around the world struggle to re-open their closed economies as the coronavirus pandemic wreaked untold damage as it ravaged through nations forcing world-wide lockdowns. Gold, once again became a safe haven. Despite the stock market recovery since…

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Markets upward trend continues, for now?

Stocks and Shares

Good news UK and U.S. markets were closed Monday 25th June 2020 – but that didn’t stop European markets roaring ahead yesterday. There are a number of positives for markets to be happy about right now. England is to re-open non-essential shops by mid June. European countries are easing their lockdown measures. Spain is looking to resurrect their holiday season this summer by ending quarantine of arrivals by 1st July. Germany’s Ifo business survey indicated ‘things’ are likely better than thought, and this despite entering recession. The death rate in…

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Bank of England hold interest rate, no new stimulus

Bank of England

The Bank of England held rates at 0.1 per cent and offered no new stimulus measures in its asset purchase programme. Decline in consumer confidence Headline BoE announcement: 14% fall in UK GDP this year and unemployment at 8%. Biggest annual fall in GDP since 1706 The BoE said indicators of UK demand have generally stabilised at ‘very low levels’ with a reduction in the level of household consumption at around 30%. According to the MPC statement, ‘Consumer confidence has declined markedly, and housing market activity has practically ceased’. Sales are…

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UK Bank of England interest decision, rate held at 0.75%

Bank of England interest rate

BoE decision After much media hype surrounding the ‘will they won’t they cut interest rate debate’, the Bank of England‘s Monetary Policy Committee – (MPC) decided Thursday 30th January 2020 to keep interest rates unchanged at 0.75% This is Mark Carney’s final rate call as the UK commences Brexit stage one, and officially and legally moves away from the EU. Carney’s last call Brexit takes centre stage The UK will now start Brexit ‘stage two’ negotiations in earnest as we officially exit the EU at 11pm on 31st January 2020.…

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Is this an omen for the next financial crisis?

Bank liquidity

It has been reported recently that the U.S. Federal Reserve is pumping billions of dollars into money markets and that we apparently have nothing to worry about? Bank liquidity Do you remember twelve years ago when the first financial crisis cracks started to emerge? One of them being a shortage of cash in the money markets (liquidity), where banks and financial institutions lend to each other. Credit crunch Do you also remember phrases in the news at the time leading up to the crisis like, ‘credit crunch’ and ‘subprime lending’?…

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UK Inflation rate falls to 1.7%

Inflation

UK Inflation rate falls to 1.7%. The Office for National Statistics says the Consumer Price Index for August fell from 2.1% to 1.7% The inflation rate has fallen noticeably in August down to its lowest level since late 2016. The Bank of England’s inflation target is 2% The Bank of England raises interest rates if inflation is too high, or it thinks it is heading that way. It will cut rates if it thinks there is a danger of economic growth slowing too much or inflation being too low. Interest…

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