After the heat wave

After a recent dip, the FTSE 100 Share Index has been heading up towards new high ground – which is more than can be said about the pound.


Growing fears that we will be leaving the European Union without a deal is leading to disenchantment with sterling. It is the uncertainty that is leading traders to dump the pound. There are those that contend this would, indeed, be the best outcome, but the assurance of a measurable deal would create something of a comfort factor.

Not much has been happening elsewhere to boost investor confidence, but that is not holding back shares. The S&P 500 Share Index is within a week or so of establishing the longest bull market on record. Politics are on hold for the summer, though Brexit, for obvious reasons, is seldom out of the news reports. And, of course, trade wars and sanctions continue to create concerns, though markets seem content to shrug aside the worst potential implications.

There have been quite a few high profile results around recently, with Hargreaves Lansdowne, Intercontinental Hotels and Standard Life Aberdeen amongst leading companies all having reported, while insurers Prudential and Legal & General are also publishing half year figures. There are a number of builders and construction firms delivering results too, so a good feel for how several sectors of our economy is faring will be around during this holiday season.

On the economic front the pickings are altogether more meagre, though the Royal Institute of Chartered Surveyors has published data on how house sales are progressing. While the housing market is undoubtedly quieter than a year or two back, values still seem to be improving, albeit slowly. The picture around the country is looking mixed, with London somewhat subdued, mainly at the high end. Uncertainty seems to be taking its toll here as well.

As for more exotic investments, there is little of cheer to report. Oil, for instance, seems stuck in the low to mid $70 a barrel, down from the highs earlier this year, while gold is languishing at its year’s low. In a way this is surprising, given that the yellow stuff is often viewed as a hedge against uncertainty. After all, trade tariffs are threatening global growth, sanctions are being reintroduced by the United States against Iran and North Korea looks as though it could be backtracking on its deal with President Trump, there is plenty to be concerned about. Well, the heat wave appears to be ending. At some stage so will the bull market. The vexed question is, what will come afterwards?

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