Skip to main content
  • Wealth management
  • Asset management
  • Wealth management
  • Financial adviser
  • International
  • MyRathbones login
  • Financial Planning login
  • Donor Advised Fund login
Home
  • Funds and strategies
    Funds and strategies

    Visit our fund centre for our full fund range

    Funds and strategies
    • Equities

      Our 4 UK-based stock-picking funds with investments in the UK and abroad

    • Fixed income

      Our 4 bond funds offering different risk levels, returns and markets

    • Multi-asset

      6 genuinely active, globally unconstrained, directly invested strategies

    • Sustainable

      Our 3 sustainable funds come in equity, fixed income, and multi asset varieties

    • How to invest

      Invest in our funds by contacting us directly, through your adviser, or on a third party platform

  • Literature
    Literature library

    Search our full library for information about a specific fund

    Literature
    • Assessment of value

      See the assessment of value reports for our funds

    • Glossary

      Search our A-Z for definitions of industry terms and acronyms

  • About us
    About us

    An active management house, offering a range of investment solutions

    About us
    • Our people

      Search our peoples directory

    • Awards

      See our fund awards from rating agencies and trad publications, dating back to 2002

    • Responsible investing

      Our responsible investment principles ensure that the companies we invest in operate in the long-term interests of shareholders

    • Media centre

      Read the latest Group news

    • MIFIDPRU 8
Let's talk

Search

Safe harbours

26 November 2018

<p>Equities took another battering last week, with oil and technology stocks hit hardest.<br><br>
<br><br></p>

Breadcrumb

  1. Home
  2. Safe harbours

Article last updated 22 July 2025.

Equities took another battering last week, with oil and technology stocks hit hardest.



The S&P 500 was off 3.8% in dollar terms, while Chinese stocks were down roughly the same amount in renminbi. Hopefully that’s not an ill augur for Sino-American trade talks that are expected to happen at the weekend’s G-20 meeting in Buenos Aires. US tech firms are wobbling as investors try to gauge how fast interest rates will rise from here and if demand is steady, slowing or screeching to a halt. There appears little evidence of the latter, but investors have been extremely flighty anyway.



According to Deutsche Bank research, 90% of worldwide asset classes have lost money in the year to mid-November, the highest percentage recorded since records began in 1901. Last year, virtually none of the 70 asset classes tracked by the bank were down. Maybe that’s what is causing investors’ fear – it’s unnerving when there appears to be no safe harbours.



The oil price slide continued last week, with Brent Crude slipping below $60 a barrel. It has fallen almost 30% since the end of September. Most commodities have fallen alongside, as has the value of US high yield debt. A good chunk of these riskier borrowers are shale and crude producers whose earnings will be down significantly because of the drop in oil (unless they’ve hedged that is). The US energy high yield spread jumped to almost 550 basis points from below 400bps in mid-October. Still, it’s not exactly tin-hats time yet: if you take a step back, you see that the spread reached 1,972bps when Brent bottomed out a $27 in early 2016.



US President Donald Trump is trying to get black stuff pumping to keep US consumers happy. The US became the world’s largest producer this year, unseating Russia and Saudi Arabia, taking back a crown that was usurped in 1973. The explosion in shale oil and gas has helped American oil production more than double in the last decade. In fact, they could pump even more if a bottleneck in pipelines wasn’t constraining them. Crews are already building more, which should come on stream late next year.



Many investors are focusing on the downsides of the oil price – that demand is falling – rather than the boost it gives to households, most businesses and many countries. Spending less on fuel means people and companies have more cash left over from the day to day that they can spend or invest. That should help many parts of the world that need a bit of stimulus, say India and China. Global GDP growth appears to be ticking along ok, so a heavy drop in the oil price seems a little incongruous with dramatically lessened supply. Instead it could be that a slight drop in demand has coincided with a surplus of crude output. Although, the question is, did other commodities drop simply because oil did or were they driven by some other factor that is a bit more sinister?



US Federal Reserve Chair Jay Powell is speaking at the Economic Club in New York on Wednesday and the minutes from this month’s FOMC meeting will be released the following day. People will be hoping for clarity about future rate rises (read whether the committee will slow down given the market worries) and parsing through both statements for tell-tale changes in language that may presage alterations to the central bank’s path. At the moment, investors are expecting two more hikes of 25bps in 2019; the Fed’s guidance stands at three.



Source: FE Analytics, data sterling total return to 23 November; *to 22 November

 

Now for the hard part

The EU rubberstamped Prime Minister Theresa May’s draft Brexit plan at the weekend. Job done …

If only. Now she has to sell it to Parliament. Mrs May has warned that rejecting the deal would mean going “back to square one”, causing more chaos. Meanwhile, former (and fleeting) Brexit lieutenant Dominic Raab says the draft deal would leave the country worse off than simply staying in the EU. Given the shape of the deal – and the lack of agency it offers – he has a point. According to the Telegraph, a parliamentary vote is planned for 12 December.

Despite all the gloom and confused fog lingering over the UK’s future relationship with the EU, Britons just got on with life in October. UK lenders approved about 39,700 mortgages that month, 2% higher than economists had expected. It’s lower than last October, but is a ray of light considering the political barney that rages in Westminster. With a bit of luck, there could be more good news from the BRC Shop Price Index on Wednesday. A positive number here would mean retailers are able to sneak through price hikes relative to last year – a good portent for shoppers’ mood. A more direct measure of this is due on Friday with the GfK Consumer Confidence Index expected to drop from -10 to -11.

Finally, we’ll be checking up on the UK net consumer credit number on Thursday. British households have been piling on the debt over the past few years and the savings rate has slumped to lows not seen since before the 1980s. Household debt relative to GDP has fallen back from a high of 87% in the second quarter of 2017; it’s way below the 96% it reached in 2010, but still extremely elevated compared with the previous four decades.

 

Bonds

UK 10-Year yield @ 1.38%

US 10-Year yield @ 3.04%

Germany 10-Year yield @ 0.34%

Italy 10-Year yield @ 3.41%

Spain 10-Year yield @ 1.63%

 

Economic data and companies reporting for week commencing 26 November

 

Monday 26 November

UK: BBA Loans for House Purchase

US: Chicago Fed National Activity Index, Dallas Fed Manufacturing Activity

EU: GER: IFO Surveys

Final results: Sanderson Group

Interim results: Polar Capital Group

 

Tuesday 27 November

UK: CBI Reported Sales

US: House Price Index, Consumer Confidence Index

EU: GER: Retail Sales

Final results: Gooch & Housego, Renew Holdings, Shaftesbury, Topps Tiles, UDG Healthcare

Interim results: Cranswick, De La Rue, GB Group, IG Design Group, Pets at Home Group, Pennon Group, Victoria

 

Wednesday 28 November

UK: Nationwide House Price Index, BRC Shop Price Index, BoE Financial Stability Report

US: MBA Mortgage Applications, Advance Goods Trade Balance, Wholesale Inventories, Retail Inventories, GDP, Personal Consumption, Core PCE, New Home Sales, Richmond Fed Manufacturing Index,

EU: Money Supply (M3); GER: GfK Consumer Confidence

Final results: Brewin Dolphin

Interim results: LondonMetric Property, RPC Group, Telford Homes

Trading update: Senior

 

Thursday 29 November

UK: Net Consumer Credit, Net Lending Secured on Dwellings, Mortgage Approvals, Money Supply (M4)

US: Personal Income and Spending, Initial Jobless Claims, Pending Home Sales

EU: Economic Confidence, Business Climate Indicator, Industrial Confidence, Services Confidence, Consumer Confidence; FRA: GDP; GER: Unemployment Rate, CPI

Final results: Daily Mail & General Trust, Premier Asset Management

Interim results: BCA Marketplace, Greene King, Latham (James)

Trading update: Go-Ahead Group, Thomas Cook Group

 

Friday 30 November

UK: GfK Consumer Confidence, Lloyds Business Barometer

US:

EU: Unemployment Rate, CPI Core; ITA: GDP

Let's talk

Ready to start a conversation? Please complete our enquiry form, we look forward to speaking with you

Enquire
Rathbones Logo
  • Important information
    • Terms and conditions
    • Modern Slavery Statement
    • Accessibility
    • Privacy
    • Consumer Duty
    • Cookies
    • Update cookie preferences
    • Sitemap
  • Important Information
    • Complaints
    • Voting disclosure
    • Assessment of value reports
    • TCFD Reports
    • Financial Ombudsman Service
    • Financial Services Compensation Scheme
    • Status of our websites
Address

Rathbones Asset Management
30 Gresham Street
London
EC2V 7QN

Rathbones Asset Management Limited is authorised and regulated by the Financial Conduct Authority and a member of the Investment Association. A member of the Rathbone Group. Registered Office 30 Gresham Street, London EC2V 7QN. Registered in England No 02376568.

© 2025 Rathbones Group Plc Incorporated and registered in England and Wales. Registered number 01000403

Follow us
  • LinkedIn
Welcome to Rathbones Asset Management Site
This site is designed for individual investors. If you are not interested in asset management please visit <a href='/en-gb/wealth-management'>our homepage</a>.

The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.