Welcome back.
This week’s cover has the omicron variant of Covid ruining everyone’s Christmas. Hopefully, it won’t come to that, of course. As Alex Rankine says, the new variant is a cause for concern, but it’s not a cause for panic – though markets certainly took its appearance as a sign to overreact a little. We look at just how serious things really are, and explain what it might mean for your money.
Our main investment feature this week is on renewable energy. Fossil fuels are on their way out (though, as we keep telling you, they’ll be around for quite some time yet, so don’t write them off). But in the longer term, renewable energy is the way to go. That’s opened up plenty of opportunities for investors, and Matthew Partridge picks some of the best.
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This week’s podcast features Ewan Markson-Brown. Ewan spent many years at Baillie Gifford running some extremely successful Pacific-focused funds, but recently moved to Crux Asset Management, where he’s moving down the market-cap scale to concentrate on smaller companies. Find out why, and what he’s buying now, here.
Here are the links for this week’s editions of Money Morning and other web articles you may have missed:
- Monday Money Morning: Coronavirus has had less of an impact on UK property than you might think
- Tuesday Money Morning: What the Omicron variant means for your money
- Merryn’s blog: Why the “capital cycle” is so important for investors to understand
- Wednesday Money Morning: It’s official – inflation is no longer transitory
- Thursday Money Morning: Is the bull market over, or is this a short-term pullback?
- Web article: Law Debenture investment trust gets a boost from hydrogen
- Friday Money Morning: Could the oil price hit $150 a barrel by 2023?
- Cryptocurrency roundup: Facebook U-turns on crypto-ad ban
Now for the charts of the week. Gold doesn’t seem to be much of a safe haven right now, selling off in tandem with wider markets.
(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) fell back, too.
(DXY: three months)
The Chinese yuan (or renminbi) strengthened a little against the greenback (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 saw a big fall despite the Federal Reserve’s more hawkish stance on inflation.
(Ten-year US Treasury yield: three months)
The yield on the Japanese ten-year bond fell, too - though perked up towards the end of the week.
(Ten-year Japanese government bond yield: three months)
And the yield on the ten-year German Bund slid further.
(Ten-year Bund yield: three months)
Copper continued its erratic journey sideways.
(Copper: nine months)
And the closely-related Aussie dollar fell hard against the US dollar.
(Aussie dollar vs US dollar exchange rate: three months)
Bitcoin fell slightly, but saw little real action.
(Bitcoin: three months)
US weekly initial jobless claims rose by 28,000 to 222,000; the four-week moving average fell by 12,250 to 238,750, its lowest since 14 March 2020.
(US initial jobless claims, four-week moving average: since Jan 2020)
The oil price saw a big fall after omicron’s emergence threatened to bring restrictions back to much of the world. But in the long run, as John noted this week, the long-term picture looks rather more optimistic.
(Brent crude oil: three months)
Amazon's share price sold off.
(Amazon: three months)
While Tesla slipped, too.
(Tesla: three months)
Have a great weekend.
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State pension errors: DWP urged to check for mistakes among divorced peopleFormer pensions minister Steve Webb says there are a high number of divorced women on low state pensions. Now MPs want the DWP to check if there were any errors in “potentially underpaying men and women who are divorced”.
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Buyers need to earn £20k above average UK salary to afford sold house prices, Go.Compare findsNews The average UK salary is £20k too low to afford the country's typical house price - we look at just how much you need to earn to step onto the property ladder in the UK
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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.
