Markets continue to show volatility
Trade tariffs and ‘peace talks’ over North Korea have had an impact on world markets, says of Investec Wealth & Investment FEBRUARY saw the release of economic data in the US ignite inflation fears, setting off a chain of events culminating in a 10% correction for many equity markets around the world.
The data showing an increase in wage growth was interpreted as a precursor to higher inflation.
With the US Federal Reserve predicted to raise rates faster than expected, bondholders demanded higher yields to compensate for the higher risk, raising the cost of capital for companies and putting downward pressure on the valuation of equities.
Inflation expectations are not the only influence on bond yields.
Demand has been propped up by almost a decade of Quantitative Easing, a factor forecasted to end in 2019.
With governments around the globe seemingly less committed to austerity, the increase in supply of sovereign debt could lead to even lower prices and conversely, higher yields.
More recently, the imposition of trade tariffs by the US has caused concern in markets with the EU and China already signalling retaliatory measures whilst the US pushes ahead with its plan.
Proposed “peace” talks between North Korea’s Kim Jongun and President Donald Trump lifted equity markets in early March, albeit the speed at which the summit is being set up may be leading to unrealistic expectations in terms of probable outcomes.
The return of volatility to the market after a long period of calm created an environment of near panic.
The good news is that this storm blew itself out in a few days, and there was minimal contagion into other asset classes.
However, the inflation cat has now got at least one paw out of the bag and the next developments in inflation trends along with central banks’ reaction to them are going to be crucial for the next leg of the market cycle.
Thinking constructively, it is positive that some of the froth has been blown off the top of the market.
Even though we do recognise that this economic and market cycle is long in the tooth, it still has some legs, although equity gains from here are likely to be harder won and subject to greater volatility. COMMUNICATIONS and strategy consultancy has been appointed to support the work of the National Rural Crime Network.
Brighouse-based Waverley will support the network’s PR, public affairs and engagement work over the next two years. It was selected following a competitive national tender process.
The network, established in 2014, works to see greater recognition and understanding of the problems and impact of crime in rural areas so more can be done to keep people safe and make them feel safe too.
It has a membership of Police and Crime Commissioners and a wide range of other bodies with a deep interest in community safety and rural affairs, including the National Farmers Union, Neighbourhood Watch and Crimestoppers.
Waverley’s work will be led by director Stephen Naylor, whose experience working in politics and journalism includes leading an MP’s constituency office in North Yorkshire.
Stephen said: “I am passionate that the voice of rural Britain is not only heard but listened to which is why I am looking forward to working with the National Rural Crime Network.
“Over the next two years, we will support its aim of engaging with all who can make a difference to those who live and work in our most isolated communities.”