Posts

Showing posts with the label Hot Topics

Hot Topics | | Bond yields are back at record lows – why are investors so scared?

Image
By: John Stepek 6-8 minutes Donald Trump’s latest tariffs on Mexican goods have increased the risk of a protectionist spiral Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . In July 2016, bond yields across the globe hit what I thought would prove to be their nadir. It seems that I was wrong. The yield on ten-year German bunds has, almost literally as I type this, slid below the depths it last plumbed in the wake of the Brexit vote. So what’s going on? Germany is particularly vulnerable to a global trade crash In July 2016, the ten-year German bund yield fell to negative 0.19%. In other words, investors were paying the German government for the privilege of lending to it (to be fair, investors in Swiss debt were paying

Hot Topics | What will it take for us to value real stuff again?

Image
By: Dominic Frisby 5-7 minutes Young people would rather rent the Rolls-Royce than own it This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . In 1990, the three biggest companies in Silicon Valley had a combined market cap of $36bn. Today, the three biggest – Facebook, Google, and Apple – have a combined market cap that is some 60 times bigger. It’s now over $2trn. A bitcoin is worth roughly seven times an ounce of gold. This inexorable growth in the value of the intangible economy is even reflected in money itself – 97% of it does not exist in physical form; 97% of money is digital. Can anything derail this trend? The vast value of the intangible eco

Hot Topics | A long stagnation could kill off Britain’s obsession with house prices.

Image
By: Dominic Frisby 5-6 minutes Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . House prices are still struggling in the UK. According to the latest Nationwide report, prices rose by 0.4% in February, compared to the same month last year. The average UK house price is now around £210,000, reckons the building society. Not much change then since last time. The big question is – what’s next? People only care so much about house prices because they have to House prices are a bit of an obsession in Britain. This is not because the British are born with some sort of property-fetish gene. It’s because houses are both economically significant and the cause of a great deal of insecurity. It’s similar to the way that parents wit

A long stagnation could kill off Britain’s obsession with house prices.

Image
By: John Stepek 5-6 minutes Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . House prices are still struggling in the UK. According to the latest Nationwide report, prices rose by 0.4% in February, compared to the same month last year. The average UK house price is now around £210,000, reckons the building society. Not much change then since last time. The big question is – what’s next? People only care so much about house prices because they have to House prices are a bit of an obsession in Britain. This is not because the British are born with some sort of property-fetish gene. It’s because houses are both economically significant and the cause of a great deal of insecurity. It’s similar to the way that parents with sch

A long stagnation could kill off Britain’s obsession with house prices

Image
By: John Stepek 5-6 minutes This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . House prices are still struggling in the UK. According to the latest Nationwide report, prices rose by 0.4% in February, compared to the same month last year. The average UK house price is now around £210,000, reckons the building society. Not much change then since last time. The big question is – what’s next? People only care so much about house prices because they have to House prices are a bit of an obsession in Britain. This is not because the British are born with some sort of property-fetish gene. It’s because houses are both economically significant and the cause of

Hot Topics | A long stagnation could kill off Britain’s obsession with house prices

Image
 By: Matthew Jukes 5-6 minutes This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . House prices are still struggling in the UK. According to the latest Nationwide report, prices rose by 0.4% in February, compared to the same month last year. The average UK house price is now around £210,000, reckons the building society. Not much change then since last time. The big question is – what’s next? People only care so much about house prices because they have to House prices are a bit of an obsession in Britain. This is not because the British are born with some sort of property-fetish gene. It’s because houses are both economically significant and the cause

Hot Topics | Why this obscure central bank debate matters for your money

Image
By: John Stepek 6-7 minutes Mark Carney has to write a letter to the chancellor if inflation gets too far away from its 2% target This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . Yesterday, Federal Reserve chair Jerome Powell confirmed that he’ll be looking to end quantitative tightening (QT) later this year. The exact process has still to be worked out (when do they do it? How much money is left swimming around? How do they get rid of all the mortgage-backed securities while still hanging on to all the government debt?) But overall, there’s nothing particularly new here. The market already knew QT was on its way out. What’s more interesting to me is that the

Hot Topics | What the end of quantitative tightening means for markets?

Image
By: John Stepek 6-7 minutes The Fed’s Jerome Powell: beaten into submission by the markets Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . The most important entity in global markets issued its latest pronouncement this week. No I’m not talk about Warren Buffett (though he comes close). I’m talking about the latest meeting minutes from the desk of the US central bank, the Federal Reserve. How quantitative tightening works We already know that the US central bank has thrown in the towel on the idea of showing markets who’s boss. We know who the boss is – it’s the S&P 500. So the precise wording of these minutes isn’t desperately important. What matters is that the Fed has been sufficiently rattled by the reaction of markets

Gold – here’s why it just might be different this time

Image
By: Dominic Frisby 6-7 minutes Gold coins and bars are in shorts upply This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . Gold has been quietly (by its standards) creeping up. Our summer trade idea to buy with the aim of offloading in the winter for a 10%-20% gain has hit the target. As I write it stands at $1,344 an ounce. But now the bulls are coming out of the woodwork. Is it time to offload? Is this another false dawn or has this run got legs? These are the questions we ask in today’s Money Morning. It looks as though gold will have a hard time getting to $1,400 I want to start with a chart of gold showing, simply, how much resistance there is in the $1

Wages are picking up – but the market still can’t believe it

Image
By: John Stepek 6-7 minutes Employment is high and wages are rising This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . It was the best of times, it was the worst of times… Don’t worry, I’ll stop there. Around the world things are looking up. Several developed economies (including the UK) are running at full employment, or as near as you can get. Yet I think it’s fair to say that everyone is grumpy. More than that, they’re fearful. They’re scared of missing out. But they’re scared of getting sucker punched again. And it’s giving rise to some pretty odd things happening in markets. Don’t let your confirmation bias blind you – this is a good report on jobs J

Is enough of your money invested in overseas stocks?

Image
By: Ben Judge 6-8 minutes This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . One of the most important lessons you can learn about investing is just how short people’s memories are. A trend doesn’t have to last for all that long before investors start to believe that “it’s always been this way”. Take the US stockmarket. It’s been trouncing rival stockmarkets for years now. It’s expensive – everybody knows that. But it deserves to be. Doesn’t it? There’s nothing special about the US, believe it or not I read an interesting piece from Mebane Faber of Cambria Asset Management this morning.  (I recommend you follow him or sign up for his emails – he’s very sm

The oil price has soared this year – and it’s nothing to do with supply or demand.

Image
By: John Stepek 6-7 minutes Russia and Saudi Arabia would quite like oil to trade at higher prices Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . After a grim 2018, stockmarkets have had a pretty decent start to this year. For example, the S&P 500 is up around 10%. The FTSE 100 is up about 7%. Even Germany’s DAX index – for all the talk of eurozone gloom – is up nearly 7%. Yet there’s one asset that has blown them all away. Oil. Oil has been a better bet than stocks so far this year The oil price (as measured by Brent crude, the European benchmark) is up by around 20% so far this year, far outstripping the gains seen by developed world stock markets. Oil is now trading near a three-month high. After last year’s steady de

Why investors should never mistake the economy for the stockmarket:

Image
By: John Stepek 5-6 minutes A recession needn’t mean a stockmarket crash Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . The global growth scare isn’t going away yet. Yesterday, we heard that retail sales in the US collapsed by 1.2% in December (or 0.9% excluding sales of petrol). That’s the worst monthly fall since September 2009. That’s pretty grim. Then this morning, we got news of weakening factory gate inflation in China. Meanwhile, it turns out that Germany only just missed falling into recession last quarter. It’s all worrying stuff. But I wouldn’t be too quick to turn bearish. The economy has a tricky relationship with the stockmarket Global economic data has been going through a rough patch. And news that US shoppers had gone on strike in December was

How to catch the best of a bull market while dodging the big bears

Image
By: Dominic Frisby 5-6 minutes This article is taken from our FREE daily investment email Money Morning. Every day, MoneyWeek's executive editor John Stepek and guest contributors explain how current economic and political developments are affecting the markets and your wealth, and give you pointers on how you can profit. Sign up free here . I’m in Mexico this week where I am giving a couple of talks at a cryptocurrency conference. Beautiful weather; long sandy beaches; big waves which for some reason remind me of the movie Papillon; nice food; nice people. It’s a tough life. In today’s missive, I thought I’d go through one of the arguments I made in one of my talks. And it’s got very little to do with crypto, before you ask. How to stop your convictions from ruining your investments There are a lot of hard-money advocates out here. Gold-, silver- and bitcoin-bugs from around the world have made their way Mexico’