Find out what steps you can take now to plan for later in life.
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The FTSE 100 is called to open 9 points higher at 7134. U.S. equities fell Tuesday after three straight days of gains, bringing the S&P 500 Index right back to the round number 2,900. The broad declines came on thin trading volumes, with the least amount of shares trading hands across U.S. exchanges this month.
With the start of the Premier League season, chances are you will have seen BT Sport’s latest advert for the beautiful game. Using machine learning, a type of artificial intelligence, BT has attempted to predict the course of the 2019/20 Premier League campaign. While it’s the results that will capture most people’s attention, it’s the use of AI that caught my eye.
The idea of digging deep into the earth has captured human imagination since time immemorial. Miners generally have a preference for mining close to the surface though; open cut mines have important advantages, including a lower cost to mine, faster production, and the potential to move greater volumes of rock.
Like death and taxes, the ageing process, both physical and cognitive, is an unavoidable feature of life. Some will attempt to slow the ravages of time, either through medical science or by actively seeking mental stimulation. Phone apps to ‘train the brain’ have grown in popularity in recent years, and newspaper pages offer a greater array of puzzles than ever before, including Sudoku, Quintagrams, and the more traditional crosswords and cryptic crosswords.
Central banks are easing monetary policy once again. Bond investors see this as pre-emptive action ahead of a global economic slowdown, perhaps even recession, whereas equity investors anticipate this will fuel a pick-up in corporate profitability by boosting GDP growth. Time will tell, but for now bond yields are at new lows – the German and Swiss governments can borrow at a negative interest rate for up to 50 years, and the UK 10-year gilt ended the month at 0.6%.
Signs of a breakthrough on the US/China trade impasse and expectations for lower interest rates resulted in many equity markets ending the second quarter at or near all-time highs. Wall Street led the way with a rise of almost 4% followed by the eurozone and Japan. Asia and emerging markets lagged in dollar terms, though a near 3% depreciation in sterling to $1.27 increased returns from international markets to over 6% for UK investors. This was well ahead of the FTSE 100 which was up 146 approximately 2%) to 7,425.
After the strong start to the year, renewed trade tensions and weaker manufacturing data saw profittaking in May as investors adopted a more cautious stance. The FTSE 100 fell 257 (3%) to 7,161 while Europe ex UK was down 5% in local currency terms, Wall Street 6% and Japan 7%. However, sterling weakness against the dollar – a 3% decline to $1.26 – and the euro and Japanese yen helped cushion losses for UK-based investors. In contrast, bonds appreciated significantly as manufacturing data suggested an increasing risk of recession and earlier than anticipated US interest rate cuts. The US Treasury yield curve again mildly inverted leaving the 10 year yield at 2.1% – below the 2.4% effective rate on Federal funds – while the eurozone and Japanese bond investors continue to face negative yields. The UK 10 year gilt yield closed at a two year low of 0.86% while rising breakeven rates on longer duration index-linked gilts gave a 4% return in May (almost 9% year-to-date). Higher oil inventories resulted in a sharp correction in Brent crude to $64 a barrel. Gold benefitted from unpredictable policy decision-making with the sterling price rising over 5%.
Major stock markets gained between 2% and 4% in April. Better than expected economic news and firstquarter corporate results helped Wall Street to a new all-time high. Returns for sterling-based investors were boosted by the dollar strengthening to $1.29 as the delayed Brexit timetable prompted speculators to close short positions. The FTSE 100 rose 139 points to 7,418, lagging global markets as well as small and mid-sized UK stocks. The oil price was squeezed higher as the US ended sanction waivers on eight major purchasers of Iranian oil.
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