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MoneyWeek 1042

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MoneyWeek is a weekly magazine that enables you to become a better-informed, smarter investor and enjoy the rewards of managing your money with confidence. 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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United Kingdom
Dennis Publishing UK
51 Issues

in this issue

3 min.
from the editor-in-chief...

“Last week’s Budget is going to make protecting your wealth a whole lot harder” Is there a bubble in the stockmarket? Depends how you judge a bubble. If you just look at valuations in, say, the US tech sector, or perhaps the global renewable energy sector, there is no shortage of bubble signals. Louis-Vincent Gave of Gavekal looks, for example, at the electric-car sector. Over the last few months, it has, he says, shown all the hallmarks of a bubble. There have been allegations of fraud (Nikola Motor Company being the target here), hubristic chief executives (we are all looking at you, Elon Musk), listings of companies with “dubious business models” and “hair-raising valuations” based on the kind of growth projections that will be utterly impossible to deliver. It’s also now showing…

1 min.
scandal of the week

Two MPs from Angela Merkel’s centre-right CDU party resigned following revelations that they had personally profited from government deals to procure personal protection equipment during the first wave of the coronavirus crisis, says Guy Chazan in the Financial Times. The scandal came just days before two important regional elections. Opposition parties were already leading the polls and the latest news has seriously undermined the CDU’s chances of “turning the tide”. Acompany owned by CDU MP Nikolas Löbel had earned a €250,000 commission by acting as a middleman between a mask supplier and two private companies in the state. His resignation followed CSU MP Georg Nüßlein’s (pictured), who was forced to resign as deputy leader of the CDU/CSU parliamentary group after it was revealed he also earned a large commission after…

1 min.
good week for:

The Great British Bake Off presenter Noel Fielding (pictured) is the latest celebrity to have accepted “substantial damages” in compensation for phone hacking by journalists at the News of the World, says the BBC. He is among several members of the public to have won compensation from the paper, which closed down in 2011 after it was revealed reporters at the paper had been illegally intercepting personal voicemails to obtain stories. “Tax exiles” and wealthy expatriates will be able to vote in British elections for the first time in 20 years, thanks to a plan to scrap a 2002 rule that prevents citizens from voting if they have lived abroad for more than 15 years, says Jamie Nimmo in The Sunday Times. Sir Mick Jagger, who owns homes in France, California…

1 min.
bad week for:

A major who illegally claimed taxpayers’ money to send his children to boarding school has been sacked from the army, says the Mail Online. Lloyd Hamilton,47, was only eligible for the school-fee allowance as long as his wife was living with him. After the breakdown of their marriage, Hamilton continued to claim around £13,000. He was convicted of fraud last month and blames his crime on “a mid-life crisis”. Commodities trader Mercuria Energy Group bought $36m of copper from a Turkish supplier only to find containers full of painted rocks when the metal started to arrive in China, says Bloomberg. The Swiss trading house says that around 6,000 tons of blister copper (an impure form of the metal) stored in more than 300 containers were swapped for “jagged paving stones spray-painted”…

2 min.
bond yields rattle the financial system

“The recession is effectively over” in America, says Michael Wilson of Morgan Stanley. Progress on vaccinations combined with another huge round of fiscal stimulus means “it’s hard not to imagine an economy... on fire later this year”. Get ready for the Biden boom By the middle of the week the US Congress was in the final stages of approving a $1.9trn (£1.4trn) Covid-19 relief bill. The package includes another round of $1,400 stimulus cheques to be distributed to US households and extends unemployment support measures. The bill also includes $350bn for state and local governments and targeted support for small businesses, hospitality and airlines. There isn’t much economic pain left for the relief bill to relieve, says Irwin Stelzer in The Sunday Times. The economy created 379,000 jobs last month. Measures of service-sector…

1 min.
china’s bull market pauses for breath

While US spending balloons, China has begun to tighten the fiscal taps, says The Economist. Prime Minister Li Keqiang has announced a lower fiscal deficit target for this year. Meanwhile, the central bank has begun to withdraw liquidity in a bid to cool speculation. Guo Shuqing, the country’s chief banking regulator, recently warned of bubbles in domestic property and global financial markets. Chinese investors have been put “on notice”. The newly published five-year plan has not done away with the traditional growth targets, but they do appear to be “vaguer and more flexible than before”, says Andrew Batson of Gavekal Research. Instead, there is a pivot towards a “pledge to keep China’s debt-to-GDP ratio stable or declining”. The renewed emphasis on debt levels has given investors pause for thought, say Joanne Chiu…