Welcome back.
In this week’s MoneyWeek magazine, we’re concentrating on inflation. Merryn talks to the Bank of England’s outgoing chief economist, Andy Haldane, who explains why price rises might prove rather more stubborn than many people think. We’ve also got a feature on how to buy into emerging markets – notoriously difficult – by using UK stocks as a proxy. If you’re not already a subscriber, sign up now.
This week’s “Too Embarrassed To Ask” looks at “zombie companies” - a term you may well have heard in this low-interest-rate environment. You can watch that here.
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We’ve another big hitter on the MoneyWeek Podcast this week. Merryn talks to Jim Mellon, one of our favourite investment gurus. Jim explains what he’s buying – a lot of UK stocks – and why, with plenty of tips for you to investigate. They also talk about Big Tech (and why he’s not buying that), Big Oil (and why he is buying that), plus why Jim believes that the future of meat and dairy production lies not on the farm, but in the lab. Find out everything he has to say here.
Here are the links for this week’s editions of Money Morning and other web articles you may have missed:
- Monday Money Morning: The central bank race for digital currencies is hotting up
- Tuesday Money Morning: What will pop the UK's house price bubble?
- Merryn’s blog: Private equity isn’t evil, it’s just doing what traditional investors should be doing
Web article: What the FCA’s “ban” on Binance means for cryptocurrencies - Wednesday Money Morning: Inflation? A Covid relapse? Markets are trying to work out what’s coming next
Web article: Cathie Wood’s ARK Invest to launch bitcoin ETF - Thursday Money Morning: The US dollar is in a bull market. That’s bad news for most assets
- Friday Money Morning: Record M&A activity is usually a toppy sign – what does it mean today?
- Cryptocurrency roundup: Binance “ban” and a bitcoin ETF
Now for the charts of the week.
The charts that matter
Gold continued to trade in a range.
(Gold: three months)
The US dollar index (DXY – a measure of the strength of the dollar against a basket of the currencies of its major trading partners) perked back up in the latest leg of its bull run. That’s not good for any other assets, says Dominic.
(DXY: three months)
Dollar strength was reflected in the Chinese yuan (or renminbi) – when the red line is rising, the dollar is strengthening while the yuan is weakening.
(Chinese yuan to the US dollar: since 25 Jun 2019)
The yield on the ten-year US government bond continued to drift slowly down.
(Ten-year US Treasury yield: three months)
The yield on the Japanese ten-year bond turned sharply down.
(Ten-year Japanese government bond yield: three months)
And the yield on the ten-year German Bund slipped, too.
(Ten-year Bund yield: three months)
Copper continued to slip, reflecting broader commodity-price weakness (oil excepted).
(Copper: nine months)
The closely-related Aussie dollar followed copper down.
(Aussie dollar vs US dollar exchange rate: three months)
Bitcoin continued to slip lower. Regulators are cracking down, says Saloni, which could dent the price further.
(Bitcoin: three months)
US weekly initial jobless claims fell by 51,000 to 364,000, the lowest since 14 March 2020. The four-week moving average fell by 6,000 to 392,750.
(US initial jobless claims, four-week moving average: since Jan 2020)
The oil price wavered a little, but its bull run is intact.
(Brent crude oil: three months)
Amazon slipped further.
(Amazon: three months)
But Tesla held on to its previous week’s gains.
(Tesla: three months)
Have a great weekend.
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UK inflation slowed again in March – but a rate cut could be some months awayThe latest Consumer Price Index (CPI) data came in at 3.2% for March. This was slightly higher than some economists expected, but takes us closer to the Bank of England’s 2% inflation target.
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Pension vs property: which option provides the best income for your retirement?News With the cost of a comfortable retirement on the rise, future retirees need to weigh up which strategy offers the best returns. But is a pension a better bet than property?
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UK wages grow at a record paceThe latest UK wages data will add pressure on the BoE to push interest rates even higher.
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Trapped in a time of zombie governmentIt’s not just companies that are eking out an existence, says Max King. The state is in the twilight zone too.
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America is in deep denial over debtThe downgrade in America’s credit rating was much criticised by the US government, says Alex Rankine. But was it a long time coming?
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UK economy avoids stagnation with surprise growthGross domestic product increased by 0.2% in the second quarter and by 0.5% in June
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Bank of England raises interest rates to 5.25%The Bank has hiked rates from 5% to 5.25%, marking the 14th increase in a row. We explain what it means for savers and homeowners - and whether more rate rises are on the horizon
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UK wage growth hits a record highStubborn inflation fuels wage growth, hitting a 20-year record high. But unemployment jumps
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UK inflation remains at 8.7% ‒ what it means for your moneyInflation was unmoved at 8.7% in the 12 months to May. What does this ‘sticky’ rate of inflation mean for your money?
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VICE bankruptcy: how did it happen?Was the VICE bankruptcy inevitable? We look into how the once multibillion-dollar came crashing down.
