Asian and wider Emerging Market equities were the standout performers globally, while in London mid and smaller cap equities enjoyed a good month, making up some of the ground lost on the FTSE 100 since June. Bond yields, meanwhile, have held steady at historically depressed levels thanks to ongoing central bank intervention in most of the major debt markets.
The first series of economic indicators and corporate results covering UK conditions after the Brexit vote have begun to emerge and the overall tone is tentatively encouraging. The August Purchasing Manager’s Index (PMI) readings showed business activity bouncing back strongly after a difficult few months, while more economically sensitive sectors, such as hotels and car sales, also reported a better last few weeks. Sterling weakness has acted as a welcome buffer to the uncertainty caused by the vote and it seems that foreign capital is being tempted back to the UK, thanks to the cheaper currency.
On a more cautious note, US non-farm payroll figures underwhelmed this month (following promising July figures) and industrial commodity prices have come off, having risen materially since February this year. Markets are increasingly turning attention to US elections season and the potential for a second rate rise from the Fed in 12 months. The chances of volatility rising again from August’s low levels seem high, particularly given upcoming events in the US. In my opinion, now appears a sensible time to have some cash in hand.
Fred Mahon is the fund manager of JM Finn’s Coleman Street Investments service. Click here for more information
The first series of economic indicators and corporate results covering UK conditions after the Brexit vote have begun to emerge and the overall tone is tentatively encouraging. The August Purchasing Manager’s Index (PMI) readings showed business activity bouncing back strongly after a difficult few months, while more economically sensitive sectors, such as hotels and car sales, also reported a better last few weeks. Sterling weakness has acted as a welcome buffer to the uncertainty caused by the vote and it seems that foreign capital is being tempted back to the UK, thanks to the cheaper currency.
On a more cautious note, US non-farm payroll figures underwhelmed this month (following promising July figures) and industrial commodity prices have come off, having risen materially since February this year. Markets are increasingly turning attention to US elections season and the potential for a second rate rise from the Fed in 12 months. The chances of volatility rising again from August’s low levels seem high, particularly given upcoming events in the US. In my opinion, now appears a sensible time to have some cash in hand.
Fred Mahon is the fund manager of JM Finn’s Coleman Street Investments service. Click here for more information
