BHP Billiton’s spin off and listing of South32 fell rather flat on Monday, as its shares traded at the lower end of analyst expectations, giving the newly minted firm a market cap around $8.7bn.
The recent bond market gyrations have disturbed the fragile peace that had broken out between bulls and bears. Some of the stronger consensus calls have been dented and questions about bubbles have once more to emerge – as have advocates for both sides.
After months of grinding yield compression the pressure valve on the German sovereign bond market was released, with 10-year bund yields jumping almost ten-fold in the space of a few days.
Aside from revising growth lower and putting an end to sterling’s election-led rally, The Bank of England’s May inflation report once more placed the spotlight firmly on productivity growth as the possible bad apple that could upset the whole cart.
A model portfolios boom is well under way and it seems to be picking up pace.
With the election done and dusted, predictably it is the banks that are the first under the spotlight. But should investors follow the Treasury’s example and use recent strength as an opportunity to sell down holdings.
Markets were buoyed on Friday by the unexpectedly clear triumph of the Conservatives, but while one question hanging over investors and the country has been answered a bigger one now looms.
Recent ructions in bond markets have underlined how quickly market sentiment can change, particularly with regard to interest rate expectations.
However you vote today, it is the direction of sterling – more so than markets – that could cause investors most concern over the coming weeks.
All manner of clichés are dedicated to boosting the confidence of the contrarian, which is understandable given how difficult the role is – especially when you have to report quarterly on fund flows and performance.
After falling for much of 2014, fund flows into Europe have definitely picked up in 2015. But, with worries about Greece continuing and valuations within equity markets less compelling than they were, how should investors be viewing the market?
As the Federal Reserve issues its latest round of riddles for the market to decipher it is becoming increasingly clear that central banks are becoming reactive drivers of volatility rather than the calm, cerebral stewards of the world economy.
