Its Not Harry

Comment and opinion for retail investors in the UK

Monthly commentary

Midweek Musings – it has come to pass?

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I refer to the sharp sell off and loss of confidence in fixed income markets that I have been predicting for a long time would be the certain result of an eventual end to near zero interest rates, plus a realisation that if there is going to be inflation, one has to own ‘real’ assets, like global equities.

The latter asset class may suffer if central banks trigger recessions by misjudging the pace of rate rises, but at the moment, the relatively hawkish approach we are seeing suggests to markets that the top economists are confident in the strength of labour markets and consumer demand and see their priority as holding back inflation. Stagflation is no doubt a risk, but markets are not seeing things that way.

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Midweek Musings – to buy or not to buy, that is the question

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With the truly horrific Putin’s war continuing to destroy Ukraine and kill hundreds of civilians, soldiers on both sides and sending Russia’s world status back to the Stalin era, it is difficult to think objectively about matters of as little consequence as the value of electronic vouchers for money.

But obviously, we must.

More of this?

The general state of global equity markets this week could be described as ‘stabilised’. Markets particpants in both the equity and fixed income markets are now able to make some judgements about the likely impact that Putin’s war will have on world order, although any such assessments will be assuming the war does not escalate outside Ukraine, either to NATO member counries like the Baltic states and Poland, or to other former Soviet Union outposts like Serbia and Moldova.

My personal asssessment of the economic consequences are that the reduction of food, energy and other primary goods coming to the market, plus the potential shock of a major Covid 19 outbreak in China (which will reduce suplies of manufactured goods) will together make the problem that triggered the end of the long bull market in November 2021, that being a fear of runaway inflation, that much worse.

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Energy prices skyrocket 🔜 inflation 🔜 recession?

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The headline may represent the main fear being expressed by investors at the moment. Of course, I know that uncertainty about the future, as opposed to specific fears will always be a heavy weight on global stock markets.

It is obvious that as long as the war in Ukraine goes on getting worse and the risk of interaction between Russia and NATO forces is on the table, stock markets are going to keep trending down. I note with some nervousness that some Russian public figures (including incredibly the leader of the Russian Orthodox Church) are rabble rousing for an invasion of the Baltic states and basically anywhere that was once in the USSR. Serious commentators are going into print suggesting that nuclear war is really quite possible.

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Watching Brief – March 2022

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Pottering About

Russian insanity

Having read the news this morning before I set out to write this piece, I am overwhelmed by the utterly pointless loss of human lives that has been triggered by the lunatic decisions of the Russian leadership.  The one thing that is certain is that the number of dead and the level of urban destruction will only balloon from now on.

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Pro Tip?

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This last week global equity markets have bounced around but have not repeated the declines of late January. Does that mean we have so soon seen the end of this short/sharp correction?

Of course, I don’t know. My recent Monthly Briefing comments in summary were that we were seeing a ‘sensible’ correction and not pessimism that was anticipating a grinding recession. So I would allow a ‘maybe yes’ in answer to that question.

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