Notícies i Política

MoneyWeek Issue 956

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.

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51 Números

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3 min.
from the executive editor...

“It’s hard to understand what’s driving the big bet on bonds, other than force of habit” In mid-2016, just after Britain voted to leave the European Union, yields on government bonds plumbed unprecedented depths. Now, as we head for another Brexit panic (see pages 8 and 21), bond yields are again near record lows. Germany has just issued a bund (a German government IOU) that promises to pay the lender absolutely nothing for an entire decade. Demand was so high that it now trades on a negative yield (in other words, investors are buying it at more than its face value – see page 4). None of this has much to do with Brexit – global investors aren’t piling into “safe havens” because they fear the exact nature of any future administrative…

2 min.
banknote of the week

The Bank of England has announced that Alan Turing will appear on the new polymer £50 note, set to enter circulation at the end of 2021. Turing was a brilliant mathematician, known today as the “father of computer science and artificial intelligence”. His code-cracking work at Bletchley Park significantly shortened the duration of World War II. In 1952 he was convicted of gross indecency for having a homosexual relationship, and chose to undergo chemical castration rather than imprisonment. He took his own life two years later, aged 41. He was posthumously pardoned in 2013. The 344 million paper £50 notes (with a combined value of £17.2bn) currently in existence will be composted for agricultural use. Good week for: England’s cricketers won the World Cup (pictured ) for the first time, scooping a…

2 min.
the fed spikes the punch bowl

“There is something profoundly depressing about the market’s obsession with US monetary policy,” says Jonathan Allum in The Blah! newsletter. Naïve souls might have thought that Federal Reserve chairman Jerome Powell’s decision to “accentuate the negative” while giving testimony to Congress last week would spook markets. Far from it. That’s because his gloomy remarks about trade tensions and the global economy have left it a virtual certainty that the Fed will cut interest rates at the end of this month, and liquidity-addicted markets love easier money. The news sent America’s S&P 500 soaring above the 3,000 mark for the first time ever. The index is now up 20% so far this year. The Dow Jones industrial index also breached 27,000. This may herald the start of a new cycle of interest-rate cuts.…

1 min.
investors are going bonkers for bonds

Germany has sold a tranche of bonds that pay no interest, reports Adam Samson in the Financial Times. In a further sign of the mania gripping the bond market, Berlin issued €3.15bn of “zero-coupon” ten-year debt last week. So investors are willing to miss out on annual interest payments to hold German paper, considered Europe’s safest asset. The auction finished with a negative yield of –0.26%, meaning that buyers would lock in a small loss if they held the paper until maturity. This is the second time that Germany has managed to issue such zero-coupon debt. Worldwide, more than £10trn-worth of government and some corporate bonds are now trading on a negative yield. The phenomenon is underpinned by quantitative-easing policies from central banks that have seen them buy up trillions of…

1 min.
amlo’s mess in mexico

The business community has always been wary of Andrés Manuel López Obrador (AMLO), Mexico’s “leftist firebrand” leader, says Ian Bremmer in Time. Yet concern about his policies was tempered by a grudging respect for his commitment to “fiscal discipline and general macro stability”. That had been underlined by his decision to hire the “widely respected” Carlos Urzúa as finance minister. Yet Urzúa resigned last week, firing off a “blistering” letter that lashed out at dubious appointments and “extremist” economic policies. The Mexican peso fell by 2% against the US dollar. It looks as though “powerful members of the left-wing government are pushing for looser fiscal policy”, writes Edward Glossop for Capital Economics. The central paradox of AMLO’s administration has been that it wants to pay for “ambitious social programmes” while not…

1 min.

“The 2020 election [is a risk to the macro and market outlook]... while the President remains wildly popular among his base, his approval rating is a dismal 40%. And this is coming off the peak of the economic expansion, and stockmarket, and the low in the unemployment rate. Meanwhile, the only reason we have such a wide field of Democratic candidates is because they each smell a huge opportunity. Yet [most] are left-of-centre and the only centrist is seen as too old... if you are a US business today [you see] Democrats threatening to roll back at least some of the corporate tax cuts. So what do you do? Wait and see... which means cash gets built up on the balance sheet instead of being deployed into the real economy.…