I’m not sure words are going to do it this week. I mean, where do I start? The leading contender (aka the accused) for the 2024 presidency of the United States has re-jigged a notorious 1930s Nuremberg threat against his “vermin” political enemies and all I can think, hear and see are goose-stepping jackboots. Meanwhile, in the UK, the Home Secretary attacks her police force, incites a knuckle-dragger riot and this doesn’t even feature as the Prime Minister’s reason for her sacking. Apparently, it was Suella Braverman’s “tone” in deeming homelessness a “lifestyle choice” which threw the cat amongst the dalmatians.But hey, don’t worry. ‘Call Me Dave’ Cameron is back to save the world.
The ex-PM being parachuted simultaneously into the House of Lords and Rishi Sunak’s Cabinet as Foreign Secretary wasn’t quite on anyone’s bingo cards. Best not to use words, just hum the Dallas theme tune, hear a shower running and think of Bobby Ewing. Or…. Esther McVey, rescued from GB News obscurity to become, I kid you not, minister for ‘common sense’. No words, none. However, where words might fail or depress there might be a few sights to cheer. I’m thinking of four very interesting charts. So, here goes…
We often write about the cost of money and ‘other people’s money’ being the critical driver of financial asset markets. Tighter financial conditions have been hurting business and investors but now, after almost two years of inflation followed by central bank interest rate hikes, there appears to be signs of a change in trajectory. First, check out the move in the yields(interest rates) of globally important US Treasury bonds:
Then, check out the latest CPI inflation report in the US. The CPI in October recorded a better-than-expected 3.2% increase in costs. However, on a month-on-month basis the rate of increase was actually zero %. That sort of price stability helps business and investors plan and see the future more clearly.
The future can look ugly when geopolitical events are dominating headlines. Clearly, the war in Gaza, apart from the enormous human cost, is adding to the stresses in a global economy already struggling with the war in Ukraine. In both wars, oil and gas supplies have been quickly identified as huge risk factors. However, the decline of oil prices in recent weeks suggests investors are confident the global economy will be able to cope with the shocks.
And, of course, the best barometer of the future is the business of the future, technology. So, check out the sector ETF (XLK) tracking technology stocks in the S&P 500. It has just hit its all-time high!
These charts are real prices reflecting real money being invested on more upbeat developments. The pictures drawn by this data do not lie. Or am I just dreaming, Pam?