While the holiday season is still a few weeks away, markets have taken on a distinctly summery feel. And it’s not just that the weather is improving. At this time of year hard economic and corporate news tends to be thin on the ground. We are, after all, close to the end of the first half of the year, so we can expect a rising stream of figures as July gets underway – at just about the time that people will be going away to take their summer break.
Meanwhile, we have markets that appear to be doing very little. Oil has risen in price, following the news that Saudi Arabia, the world’s largest oil producer, is to cut back on production to help buoy the price. The International Monetary Fund has opined that immigration could help bring down the UK’s inflation rate. And the pound has been strong on precisely the fact that our cost of living index remains stubbornly high, which is likely to mean more interest rate rises, making sterling that little bit more attractive to overseas investors.
On the company front, energy giant SSE has been fined nearly £10 million for overcharging the National Grid, though this had little impact on the share price. Otherwise there has been little to report on a week that is looking singularly devoid of interest. And this could continue for a few weeks more, though things do seem to be hotting up in Ukraine, and not necessarily in a positive way, which may yet affect investor sentiment.
Elsewhere, both the Nationwide building society and Halifax, Britain’s largest mortgage lender, have published their house price indexes which indicate that the value of our homes have moved into reverse for the first time in more than a decade. Admittedly the falls are not great, but demand has clearly been impacted by the tighter mortgage market and the fear that rates have still further to rise. We need some real evidence that inflation is subsiding to restore confidence in this particular market.
At times like this, canny investors could be thinking about taking stock of their investments and carrying out any adjustments that might seem appropriate. Markets are certainly very quiet right now, with the FTSE index barely changed as I write this piece. In my time as a portfolio manager looking after private clients, this is what I would have been doing, but these days I am content to leave the decision taking to my manager at JM Finn.
