Today (Monday) things are calmer in the UK markets with the Pound and UK stocks strongly higher and gilt yields lower after new Chancellor, Jeremy Hunt, announced a reversal of nearly all the tax cuts in the government’s recent mini-budget. US stocks are also up following positive third-quarter earnings reports from major US companies including Bank of America.
Last week, US CPI numbers came in higher than expected with core CPI hitting 6.6%, a 40-year high. There was nothing in the data that would encourage the Fed to change its “higher for longer” stance on interest rates. US stocks actually managed to rally on Thursday despite the CPI disappointment but gave the gains back on Friday. The 10-year U.S. Treasury yield ended the week above 4%, the first time that’s happened since 2008.
Surprisingly, the price of oil was lower last week after the OPEC+ decision to cut production. The Biden administration claims that Saudi Arabia put pressure on other OPEC members to agree to the cuts in output and has accused the Organisation of “aligning with Russia”.
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.’