In the UK April saw the clock ticking down towards the General Election. For the rest of the world, life went on pretty much as normal: that’s to say, China and Germany remorselessly cranked out another trade surplus, the American economy gave us more mixed signals, and Greece teetered on the edge of bankruptcy.
Category: Market commentary
The focus in March inevitably turned towards the UK Budget – delivered by Chancellor George Osborne on March 18th – and the forthcoming General Election, with the two main parties currently running neck and neck in the opinion polls.
At last! A full house, ladies and gentlemen. For the first time since we started this bulletin all the major world stock markets moved resolutely upwards in February. Some by a little, some by a lot and some – step forward the UK – finally breaking through a previous high from the last century.
The great thing about writing this bulletin is that you make a note of something which looks hugely significant around the middle of the month and then something else comes along which makes it pale into insignificance. In this case the ‘hugely significant’ event was the fall in UK inflation – what came along was the Greek election result and victory for Syriza, the far-left coalition under Alexis Tsipras.
Traditionally, December is a ‘slow news’ month. Like August, the great and the good spend a large part of the month on holiday and world events supposedly move slowly, if at all.
Not so in 2014 – There was the Autumn Statement in the UK, the tumbling world oil price, the gloom over the Eurozone, the snap presidential election in Greece, rapid growth in the US economy, rapid growth in the Chinese stock market, much less than rapid growth in Japan as the economy contracted and there were the first signs of recession in Russia.
November saw the G20 group of world leaders meeting in Canberra. The summit was notable for the new sport invented by the great and good: a bizarre game of musical chairs in order to avoid being photographed sitting next to Vladimir Putin!
In all the time we’ve been writing these market commentaries it’s difficult to remember a more turbulent month than October 2014.
Throughout the summer we have been writing about events in the Ukraine and the worries that conflict posed for Europe. Fortunately we now have a ceasefire in the region – and Russia and the Ukraine have just concluded a deal (brokered by the EU) for supplies of gas to resume. Just as well, last week the temperature in Kiev dropped to five degrees and 60% of Government buildings were without any heat.
Throughout the summer this bulletin has been focused on events in the Ukraine, now we have an admittedly uneasy truce in the region and the focus of the world’s discontent has moved elsewhere. At time of writing, pro-democracy protesters are occupying the streets of Hong Kong and a coalition of 40 countries is in the early stage of an attack on ISIS – the Islamic State in Iraq and Syria.
The phrase ‘the world looked a dangerous place’ has been used many times to describe the status of the markets. Never has that seemed more true than in August.
In Northern Iran/Iraq the Islamic State continues to gather momentum and the world expressed outrage at the murder of US journalist, James Foley.
Where to start this month? Until July 16th it was an easy decision: the happy, smiling face of German Chancellor Angela Merkel as her boys lifted the World Cup with a 1-0 win over Argentina. A booming stock market, huge trade surplus – and a trophy from Sepp Blatter. What more could a country want?