The UK stock-market was higher last week extending October’s bounce back from the decline in September.
UK Gilt prices saw their biggest one-day price rise since March last year after the Debt Management Office (DMO) reduced its bond issuance by a much larger degree than expected.
European inflation data showed that prices had risen 4.1% in the year to October, more than twice the ECB target. Christine Legarde, ECB President, said that inflation could “take longer to decline than initially expected”.
Our Breadth Indicator stayed neutral but our Momentum Indicator ticked back up.
Large caps out-performed in a strong week as the US stock-market hit new highs again.
Investors focused on the strong third quarter earnings season rather than inflation concerns with more than 80% of companies that have reported in the S&P 500 so far (over half) beating estimates, although Apple and Amazon both disappointed.
A big week for data this coming week with the Fed FOMC meeting on Wednesday and the non-farm payrolls report on Friday. The Fed is expected to announce the start of its tapering program – could be some volatility.
Our Breadth Indicator stayed negative but our Momentum Indicator ticked higher for the first time in seven weeks.
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.’