What is the YOU Investment & Asset Allocation Committee and how does it make decisions?
In this video our Client Relationship Manager, Nick Heath, interviews Chris Ayton, one of our Fund Managers on the YOU Investment & Asset Allocation Committee and how it makes decisions.
https://youtu.be/M8upQh6r8-A
UK adds 20,000 jobs in February as unemployment rate remains steady
The number of payrolled employees in the UK is estimated to have increased by 0.1% (20,000) in February, according to data from the Office of National Statistics today (12 March).
The number of payrolled employees in the UK is estimated to have increased by 0.1% (20,000) in February, according to data from the Office of National Statistics today (12 March).
The World In A Week - First mover advantage
Written by Millan Chauhan.
The latest figures released by the Commerce Department Bureau of Economic Analysis in the U.S. revealed that the personal consumption expenditure (PCE) price index figure increased by 2.4% in the 12 months to January 2024, in line with expectations. The core PCE price index (which excludes food and energy) rose 2.8% in the 12 months to January 2024. If you remember in mid-February, it was announced that US inflation figures for the 12 months to January came in at 3.1% which was above expectations of 2.9%. The U.S. market responded positively to the latest PCE price index figures and the fact they were in line with expectations, as the S&P 500 returned +1.4% last week in GBP terms. The Federal Reserve are set to meet on the 19th-20th March where it will decide the trajectory of U.S. interest rates. We are set to receive one further U.S. inflation print on March 12th, ahead of this much anticipated meeting.
Elsewhere, in Europe, the inflation rate declined to 2.6% in the 12 months to February 2024, slowing from 2.8% in the previous month, however this was still above expectations as inflation is proving to be stickier than initially expected. Energy prices declined 3.7% over the month but food, alcohol and tobacco inflation remain high at 4% and services inflation still remains at 3.9%. Core inflation in Europe was announced at 3.1% with expectations at 2.9% and is a critical measure used by the European Central Bank who are set to meet this Thursday where expectations are that interest rates will be held at 4.5%.
In the UK, house prices increased for the first time since January 2023 according to Nationwide’s House Price Index which rose 1.2% in the 12 months to February 2024 as borrowing costs declined.
There has been much speculation as to what the UK Budget has in store for us with talks of cuts to personal taxes and national insurance. The Chancellor of the Exchequer, Jeremy Hunt is set to unveil his list of measures on Wednesday.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 4th March 2024.
© 2024 YOU Asset Management. All rights reserved.
The World In A Week - No roses – just recessions and rising inflation
Written by Ashwin Gurung.
Last week, the official data showed that at the end of last year both the UK and Japan economies fell into a technical recession. This was an outcome neither of the nations anticipated, marked by two straight quarters of negative economic growth. The US economy was also taken aback by hotter-than-expected inflation numbers.
The UK economy contracted once again in Q4 2023 by -0.3%, more than the market consensus of -0.1%, following a contraction of -0.1% in Q3 2023. The officials reported that in Q4, all major parts of the economy declined, with manufacturing, construction, and services having the greatest negative effect on growth. This is the first time the UK entered a recession since COVID-19 plummeted the economy in 2020. Meanwhile, the inflation rate remained unchanged, with the Core Consumer Price Index (CPI) holding steady at +5.1%, but below expectations, which renewed the hope that the Bank of England (BoE) will cut rates sooner. However, the BoE Governor, Andrew Bailey, played down the GDP data before its release and said that the BoE is seeing signs of an “upturn” in the economy and the fall in the GDP looked “very shallow”. The Retail sales numbers released on Friday appear to have validated his statements, which rebounded +3.4% month-over-month, after a sharp fall of -3.3% in December.
Similarly, in Japan, the economy unexpectedly contracted -0.1% in Q4 of 2023, coming in below consensus of +0.3% growth, causing the economy to fall into recession for the first time in five years, as domestic demand declined. Consequently, Japan lost its position as the third-largest economy to Germany. While the weakening Yen coupled with a positive corporate earnings release supported the Japanese equity market last week, the Bank of Japan (BoJ) now faces challenges in supporting the economic growth as well as the currency.
Meanwhile, in the US, the unexpected rise in inflation dampened investor sentiment and briefly drove the US market lower. Core inflation, which excludes volatile items like food and energy, rose +0.4% for the month, contributing to a year-on-year increase of +3.9%, well above the Federal Reserve’s (the Fed) target of 2.0%. A significant factor driving this inflation was the rise in housing and rent prices over the past year, increasing by +6.0%. These items account for nearly one-third of the overall CPI basket. However, it is important to note that these factors are considered very lagging data points and do not represent the current conditions. Nonetheless, US stocks rebounded over the week.
This week, the investors will be looking forward to the Fed’s latest minutes on any new insights on the direction of the monetary policy. Additionally, an eagerly awaited earnings report from Nvidia is set to be released on Wednesday, which could have a potential impact on the market sentiment, given that much of the recent rally in the US equities has been fuelled by optimism surrounding Artificial Intelligence (AI).
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 19th February 2024.
© 2024 YOU Asset Management. All rights reserved.
The World In A Week - Have we reached the summit?
Written by Shane Balkham.
UK inflation fell to below 5% in October, on the back of a sharp decline in energy costs. The monthly publication from the Office of National Statistics (ONS) showed a 2.1% drop in UK Consumer Price Inflation (CPI) from 6.7% for September to 4.6% for October.
A significant contributor to this fall was the fall in energy prices; over the year to the end of October, gas prices fell by 31% and electricity prices fell by 15.6%. Food prices were little changed for October.
This is a positive step bringing inflation back down to the Bank of England’s (BoE) target level of 2%. There are another three weeks until the Monetary Policy Committee of the BoE meets to discuss the path of UK interest rates, and it remains a delicate balancing act.
The US also had a pleasant surprise for inflation, with a fall greater than expected. US CPI for October fell from 3.7% to 3.2%, which was marginally below consensus expectations. The reaction of the US market was one of relief, with US Treasury yields falling and the stock market rallying.
Some commentators believed that this was an overreaction by investors and while inflation is certainly heading in the right direction, there will be challenges ahead. The US Federal Reserve meets a day earlier than the BoE, with the next decision on interest rate policy coming on 13th December.
It makes sense that the reaction from markets on October’s inflation readings was one of relief. However, central banks are known for not necessarily doing the right thing at the right time, and although there is optimism that we have reached the peak in the interest rate hiking cycle, we are still treading carefully in our investment decisions.
From policymakers to politics, where the US House of Representatives voted to avert a costly government shutdown last week. In a similar move to that of six weeks ago, the can has been kicked down the road until early in the new year. The proposal provides a two-step plan that sets up two new shutdown deadlines next year. US government funding has been divided into two different parts, with priority given to military construction, transportation, housing, and the Energy Department, which has a new deadline of 19th January 2024. Anything not covered in this first step would be funded until 2nd February 2024. Politics will certainly start the New Year in the spotlight and will likely remain there.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 20th November 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - UK resilience in August
Written by Dominic Williams.
UK GDP figures were released by the Office for National Statistics last Thursday, showing that the UK economy expanded by 0.2 per cent in August. This marks a reversal from the 0.6 per cent decline observed in July, which had been revised down from the initially reported 0.5 per cent decline. As a whole, the service sector was the sole positive contributor to this growth, rising by 0.4 per cent in August. However, consumer-facing services experienced a decrease of 0.6 per cent, indicating that the central bank’s interest rate increases are beginning to impact consumers. Production output saw the most significant decrease, falling by 0.7 per cent, following a decline of 1.1 per cent in July 2023 (which was also revised down from the initially reported 0.7 per cent). Construction also fell by 0.5 per cent. The three-month average GDP figure for August was also released, indicating a growth rate of 0.3 per cent. This figure can be considered a more stable measure compared to the month-on-month figures. Furthermore, this data suggests that the UK is not likely to enter a recession in 2023, as defined by two consecutive quarters of negative growth.
The world’s two largest economies reported contrasting inflation figures over the past week. In the US, September’s Consumer Price Index (CPI) exceeded expectations, remaining unchanged at 3.7 per cent year-on-year. However, the core measure, which excludes food and energy, decreased from 4.3 per cent to 4.1 per cent year-on-year, the lowest reading since September 2021. The higher-than-expected headline rate might signal a potential interest rate hike by the Federal Reserve. In contrast, China reported CPI figures that remained unchanged year-on-year, falling short of the consensus expectations of a 0.2 per cent increase. The most significant drop was observed in food prices, which fell by 3.2 per cent, driven by a sharp decline in pork prices (China being the largest consumer of pork globally). These figures suggest persistent deflationary pressures and raise concerns about the strength of the economic recovery due to sluggish demand.
In other news, in Marrakesh, Morocco, the World Bank and the International Monetary Fund (IMF) held their annual meetings. The IMF unveiled their outlook for global economic growth, predicting a slowdown. It anticipates a decline from 3.5 per cent last year to 3 per cent this year, further decreasing to 2.9 per cent next year, marking a 0.1 per cent downgrade from their previous 2024 estimate. Global inflation is also projected to decrease from 6.9 per cent this year to 5.8 per cent next year, however this is an increase of 0.6 percentage points above their previous forecast. While central bank rate hikes are credited with some success in controlling price pressures, the IMF expects that over 90 per cent of economies with an inflation target are expected to remain above target.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 16th October 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - Bank of England Headache
Written by Chris Ayton.
It was a positive week for global equity markets with the MSCI All Country World Index rising +1.3% in Sterling terms. Global bonds collectively declined with the Bloomberg Global Aggregate Index -0.3% in GBP hedged terms although credit and high yield fixed income indices ground out small gains.
UK economic data released over the week provided the Bank of England with a bit of a headache for its upcoming interest rate decision. Average pay increased 8.5% year-over-year, which was higher than expected, and will be considered quite inflationary. Although this is partly due to one-off payments to public sector workers, the data excluding such bonuses was also higher than expected. However, UK GDP data released last week was worse than expected, contracting 0.5% between June and July. The services sector was particularly weak, although notably this was impacted by strikes by NHS staff. Markets read this as a positive sign that any incremental rise in interest rates from the Bank of England this week is likely to be the last in this cycle and helped the FTSE All Share Index to a +2.9% weekly gain.
Similarly in Europe, the European Central Bank raised interest rates to an all-time high although, with growth stalling and inflation starting to fall, it also signalled that its cycle of rate increases was likely nearing an end. After a strong start to the year, growing concerns about the growth outlook in Europe has seen sentiment towards European equities start to wane and Europe ex-UK is one of the few regional equity markets to be down over the third quarter so far.
Japan was the standout performer over the week, with MSCI Japan up +3.8% in Sterling terms as both the equity market and currency strengthened. The rise came on the back of the Bank of Japan’s Governor, Kazou Ueda, signalling Japan could end its negative interest rate policy when achievement of its 2% inflation target is in sight, citing year-end as a potential point for them to have sufficient data to make this determination.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 18th September 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - Continental Slowdown
Written by Cormac Nevin.
Markets were flat last week, with the MSCI All Country World Index of global equities down -0.3% in GBP terms. What was notable was the continued underperformance of Continental European equities, which are down -1.6% in GBP for the quarter to date, compared to a +1.5% gain for global equity markets. After a strong start to the year, Europe ex-UK equity markets have given up their relative gains vs global equities and are now up only +8.0% vs 9.7%.
Economic data from the continent continues to come in weak as the diverse set of economies which constitute the Eurozone face an array of challenges. Purchasing Managers Indices (PMIs) are broadly tracked as a forward-looking measure of economic performance and these have been undershooting already low expectations across countries such as France, Germany, and Italy for both the manufacturing and services sectors of each economy. Consumer price inflation continues to come in higher than the European Central Bank’s (ECB) target of 2%, with readings of +6.4% year-on-year recorded in Germany last week.
However, a more leading measure of input inflation, the Producer Price Index (PPI) for the Eurozone, is now recording very steep declines in input prices falling -7.6% year-on-year as of last week. This is the most negative PPI reading since the global financial crisis in 2008/09 and ought to really give the ECB pause to consider whether inflation is the most pressing issue on a forward-looking basis and if interest rates are now so high that they are excessively restricting economic growth.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 11th September 2023.
© 2023 YOU Asset Management. All rights reserved.
The World In A Week - Summer Prints
Written by Millan Chauhan.
Last week, we saw the release of US inflation data where the US Consumer Price Index reached 3.2% on a year-over-year basis as of July 2023 which was below expectations of 3.3%. Inflation has fallen significantly from its highs of 9.1% in June 2022. Food was one of the largest contributors to July’s monthly inflation print of 0.2%. Food at Home costs rose 3.6% and Food Away from Home costs rose 7.1% on a year-over-year basis. Attention now turns towards the UK and Continental Europe where we await July’s inflation data readings on Wednesday and Friday respectively. In the UK, analysts expect to see inflation fall to 6.8% and in the Euro Area to 5.3%, both on a year-over-year basis for July 2023.
Over the last 15 months, we have seen central banks implement several interest rate hikes, which has caused commercial banks to raise the interest rate received on deposits by savers. Some banks have been slower to increase the interest rate received than others. Last week, the Italian Government stepped in to penalise banks for failing to pass enough of the interest hikes from the European Central Bank (ECB) to depositors, it initially stated that it would tax 40% of net interest margins in 2022 or 2023 which initially saw numerous Italian banks sell off sharply. The announcement was a shock to investors and was widely criticised. Subsequently the Italian Prime Minister, Giorgia Meloni backtracked the decision and clarified that any levy applied would be capped to 0.1% of assets.
The UK’s Gross Domestic Product (GDP) grew 0.5% in June 2023 which was above expectations of 0.2%. The extra bank holiday has been cited as a key driver; however, we have also seen production output grow 1.8% in June 2023 which outpaced the Services & Construction sectors. June’s strong economic growth data saw the UK’s Q2 GDP grow by 0.2%.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th August 2023.
© 2023 YOU Asset Management. All rights reserved.
Two Minute Missive 26 March 2024
In this video our Client Investment Director, Shane Balkham, explores today's market trends and considers how our team safeguard client investments through smart diversification strategies, ensuring peace of mind and steady growth.
https://youtu.be/BKHrkcbTTik