Week ending 01/11/24 – A ‘big’ budget – interest rates and equities both rise…
Jeremy and Gareth discuss, obviously, the UK Budget...
Rachel Reeves may have (just) avoided a Kwarteng moment, but bond investors have been worried at the level of debt. Equity investors, on the other hand, have shown relief that AIM's IHT benefits are largely intact following Wednesday. But it was a "big" Budget with lots of new tax, and lots of near-term expenditure without lots of detail or reassurance around the detail or the benefit of much of that spending.
Elsewhere, oil prices have tumbled, Japan has lurched to another political crisis, and gold, silver and bitcoin are all strong. US tech Q3 has been good, but not good enough for investors - stocks have fallen on relatively "in line" trading.
In the UK, we've seen a flurry of small deals - three Progressive clients (Vertu Motors, Van Elle and SDI) all bought UK-based businesses where the vendors may have been hurrying to beat any Budget changes to Capital Gains Tax. Even discounting the Budget flurry, there does seem to have been a modest pickup in market activity.
Following the recording of the podcast, Friday's US non-farm payrolls figure was weak...a gift for Donald Trump who can point to a weakening economy. Next week obviously sees the US election - plus rate decisions in both the UK and USA on Thursday, where 0.25% reductions are expected...although the lower-rate trajectory might be less clear than previously hoped.
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