MoneyWeek

It has been a good few days for the bulls – and for some of our favourite investments. The UK economy may be facing some intractable problems (see page 22), but we heard last week that we may have avoided recession. Now it appears Europe may do the same (see page 4). The FTSE 100, which we have been pointing out for some time is cheap, is now ever so slightly less cheap, as it is trading close to a record high. Gold, meanwhile, is close to its all-time high in sterling terms, while it has been rising sharply in dollars, too. It is still roughly 5% below its record set in August of 2020, however. As it has proved a safe haven and an excellent store of value – gold bugs…

Italy has shut down a failed streaming platform dubbed the “Netflix of Italian culture” after investing €19m in the project, says The Times. The ITsART platform was set up in 2021 to showcase Italian arts, music and history, with content (pictured) from institutions such as the Uffizi Gallery in Florence, together with La Scala opera house in Milan and ancient sites such as Pompeii and the Colosseum. However, the service lost €7.5m in its first year, attracting 141,000 subscribers who paid just €140,000. ITsART was championed by Dario Franceschini, the culture minister for most of the period from 2013 to 2022, but was unpopular with the new government that took over in September last year. “It burns money and doesn’t communicate much,” said Gennaro Sangiuliano, the current minister. Franceschini previously…

“Someone up there likes Europe,” says John Authers on Bloomberg. Mild weather has enabled the continent to defy predictions of a miserable winter plagued by gas shortages and industrial shutdowns. Instead, European wholesale natural gas prices have “dropped a stunning 85% since August”. Cheaper energy has the same stimulative effect as a big tax cut and will also reduce upward pressure on inflation. Analysts now no longer expect the eurozone to fall into recession this year, says Valentina Romei in the Financial Times. The new forecast of 0.1% growth for 2023 is underwhelming, but better than the contraction previously expected. The brighter outlook means that European stocks have been “outshining” their US peers in recent months, says Caitlin McCabe in The Wall Street Journal. The Euro Stoxx 50 index (tracking the single…

The FTSE 100 is close to a record high. Last week the blue-chip index came within 1% of its May 2018 record of 7,903 points before falling back. Nonetheless,“the index is still less than 15% higher than it was at the end of 1999”, says Tom Stevenson in The Daily Telegraph. “In 23 years, the UK market has delivered no more than you might hope for in a good 12 months”. British investors would have done much better with the mid-cap FTSE 250, which has outperformed America’s S&P 500 over the last 23 years. Yet the media’s focus on the FTSE 100 is understandable since “the top 100 companies are worth more than 90% of the value of the entire UK market”. The FTSE 100 has done a better job recently,…

US cannabis firms just can’t “catch a break”, says Carol Ryan in The Wall Street Journal. Hopes for more tolerance of the drug at the federal level, where it remains illegal, were dashed last month after Congress rejected an initiative to give pot suppliers easier access to the banking system. Recreational cannabis use is now legal in 21 US states, but ongoing federal prohibition forces the industry to operate in the shadows. The AdvisorShares Pure US Cannabis exchange-traded fund (ETF), which tracks US cannabis firms, plunged by 73% in 2022. With the Republicans in the majority in the House of Representatives, prospects for any more industry-friendly legislation look limited. US cannabis sales fell 1% in the year to November, with average wholesale prices down 28%. The sector is “paying the price for…

What happens when “a mob [trashes] the seat of government”? asks Craig Mellow in Barron’s. In Brazil, at least, stocks react by gaining 8% in a week. Investors were unruffled by the riots in Brasília earlier this month, which saw supporters of former president Jair Bolsonaro seek to overthrow the newly installed Luiz Inácio Lula da Silva (commonly known as “Lula”). For all the parallels with the US Capitol insurrection two years ago, “Brazil’s elite united much more decisively to defend their democracy afterwards” than America’s. Even Bolsonaro’s former allies condemned the violence. Investors turn bullish Despite the turbulent political backdrop, the Ibovespa stock index pipped the Indian and British markets to take the crown as last year’s best-performing major bourse, with a 4.7% gain, says Matt Turner on Bloomberg. Foreign investors…