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MoneyWeek Issue 942

There's a reason MoneyWeek is Britain's best-selling financial magazine. We exist to help you ground your portfolio so that it keeps your money safe during rough patches and growing in the good times. We don't just look at how to maximise your returns and limit your losses, we also like to look at how you can keep more of the money you've made. Week-in, week-out we'll guide you through the financial world as it changes, alerting you to all the opportunities to profit and dangers to avoid, as they appear. Income strategies, rising-star companies, the best funds and trusts, clever ways to preserve your wealth during market turmoil... you will get the best ideas from the sharpest financial minds and investing professionals in Britain.

United Kingdom
Dennis Publishing UK
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$6.61(Incl. tax)
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51 Issues


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from the executive editor...

“Saudi Arabia has raised funds for its reform plan without having to flog the family silver” Saudi Aramco, the giant oil company owned by the Saudi Arabian government, is the most profitable company in the world (that’s what happens when you produce 10% of the world’s oil and you’re able to pump it for less than $3 a barrel). It has a pristine balance sheet. It’s the kingdom’s corporate crown jewel. However, the Saudis, under Crown Prince Mohammed bin Salman, have decided, correctly, that their economy is too dependent on oil, particularly in an era where the US has become a major energy rival. Bin Salman, under his “2030 vision” plan, wants to invest in building more sustainable, diverse income streams. But that takes a lot of money. And so, about three…

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loser of the week

JK Rowling’s former assistant, Amanda Donaldson (pictured), has been ordered to repay the Harry Potter author £18,734 after she used the writer’s credit cards and petty cash “without approval over three years”, says The Guardian. Donaldson began working for Rowling in 2014. The unusual transactions escalated shortly thereafter “to a point where it was almost out of control”, the court in Airdrie, North Lanarkshire, heard. An “extraordinary” £3,629 was spent on toiletries from Molton Brown (a brand that Rowling pointed out she finds too perfumed), £2,139 on cards and stationery, and £1,636 at coffee shops. One Christmas, Donaldson gave her employer a Liberty notebook, only for the item to then turn up on Rowling’s credit-card statement. Sheriff Derek O’Carroll disagreed with Donaldson’s claim that the transactions had been authorised. She will…

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sun comes back out on wall street

“Over the past six months, the stockmarket has gone from inconsolable to imperturbable,” says Michael Santoli on CNBC. The S&P 500 is just shy of its record high of last September. Wall Street tends to set the tone for global equities, so it’s no wonder the pan-European Stoxx 600 Index is at a seven-month high. This is partly due to improved data. After last year’s wobble, the US economy is regaining its strength. “Mortgage applications... and durable goods orders indicate a steadying of the ship,” says Tan Kai Xian in a Gavekal Research note. In other positive news, both Chinese and US manufacturing data have improved. The two superpowers may also be on the verge of a trade deal, another development fuelling confidence. What’s more, the section of the yield curve that…

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germany: is the gloom overdone?

Germany is “teetering on the brink of recession”, says Tommy Stubbington in The Sunday Times. Industrial orders have seen their sharpest drop in more than two years, defying hopes of a rebound in Europe’s largest economy. So what’s gone wrong? Germany is very dependent on exports, which make up 50% of its GDP. Its economy is powered by the “Mittelstand”, small and medium-sized companies that are often family-run and highly specialised. They supply much of the machinery for the world’s factories. The success of its exports is also Germany’s Achilles heel, as it leaves it vulnerable to slower global growth, especially in China, the main destination of its machinery. The world economy is expected to grow by around 3% this year, the lowest rate since the financial crisis. Germany’s slowdown has affected…

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ignore the bitcoin bounce

In the first week of April bitcoin gained 15%, surpassing the $5,000 level for the first time since November. It had fallen a long way from its record peak of $20,000 in January 2018. “But good luck finding a reason to explain the sudden spike,” says Paul La Monica on CNN. Some say bitcoin’s sudden price rally was sparked by “a large trade order from a mysterious buyer”, notes Billy Bambrough on Forbes. This set off a wave of “algorithmic buying as computer programs scrambled to place orders of their own” to partake in the sudden price surge. Dramatic price swings are nothing new with bitcoin. As with previous rallies, the current spike has led some investors to believe that bitcoin is back, fuelling cryptocurrency investors’ hope that the currency will establish…

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“You may have heard about ‘helicopter parents’, hovering over their children to ward off any and all threats. The problem is, they keep the children from gaining independence. Similarly, ‘helicopter’ monetary and fiscal policy that seeks to protect the economy can instead accomplish the opposite. Access to capital is necessary for economic growth, but free and/or subsidised capital is its long-term enemy. Managers and entrepreneurs have less incentive to innovate and operate efficiently when they can always count on another venture capital funding round or leveraged loan. When they don’t actually have to compete with more innovative competitors, thanks to low-cost capital and their huge scale, creative destruction gets short-circuited. We no longer live in the world Austrian political economist Joseph Schumpeter envisioned.”…