St. James's Place News
Equity investors pause for breath
Last week saw investors take a sharp pause for breath on concerns over the prospects for global economic growth. US and European stocks closed the week little changed while UK stocks fell around 1%; although the 'risk-off' attitude was more tangibly demonstrated by a weakening of commodity prices and the euro, as well as gains for highly rated government bonds.
A further reason for the more cautious tone was Spain's apparent lack of urgency in seeking a full sovereign bailout, despite reports on Friday that EU officials and the Spanish government were working on another rescue package. Market reaction would suggest scepticism that this will address the important issues related to Spanish fiscal policy.
Also in this week's bulletin...
- The Greek Prime Minister, Antonis Samaras, warned European leaders that a Greek exit from the single currency would spell trouble for all. Meanwhile, his government's coalition struggles to reach an agreement on a €11.5 billion package of budget cuts.
- According to reports, George Osborne is on course to borrow almost as much in 2012 as he did in 2011, highlighting the faltering progress towards deficit reduction.
- Nick Purves of RWC Partners explains that whilst the economic outlook remains challenging, corporate profits have been strong over the last two years and his focus on finding companies with the ability to generate sustainable cash flows will be a major driver of investor returns over time.
View this week's Market Bulletin (PDF), which contains thoughts and opinions of St. James’s Place and our range of investment managers on the key issues affecting investors.
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