A small giveaway budget offset by a grave deterioration in the outlook for UK growth and the government’s tax receipts shouldn’t move the dial for investors.
Investors today are paying a relatively high price for the domestically focused FTSE 250 compared with its larger multinational peers in the FTSE 100. This may seem counter-intuitive given Brexit uncertainty and concerns about the outlook for the domestic economy. But the answer to this conundrum may not be as simple as merely buying the cheaper of the two indices.
Investors today are paying a relatively high price for domestically focused UK companies compared with their multinational peers, which seems counter-intuitive given Brexit uncertainty. For investors, this divergence is creating both opportunities and challenges, which are the focus of our lead article “Digging below the surface of UK indices".
Europe has long been seen as the unloved problem child of the developed markets, beset with fiscal problems, threatened with disintegration and unable to escape from chronic underperformance. Now it is the new favourite. But can Europe justify its new-found popularity and higher valuations?
With all the major regions of the global economy growing in synch, investors are shrugging off political uncertainty. Equities have been buoyant, particularly in the US technology sector, where rising valuations are the focus of our lead article “Great tech-spectations”.
Indicators point to a peak in the pace of global expansion, but we still prefer equities to bonds.
As well as the portfolio diversification benefits that commodities can add to holdings of traditional stocks and bonds, they can also have speculative appeal.