It was another turbulent week for financial markets. This week saw yields on UK government bonds climb again (yields rise as prices fall) over worries that the fiscal books continue to look unbalanced and the Friday deadline for Bank of England (BoE) support in that market loomed.
In the face of mounting criticism, Chancellor Kwasi Kwarteng performed another U-turn this week by announcing his medium-term fiscal plan would be brought further forward. This will see the Office for Budget Responsibility’s (OBR) forecasts released just ahead of the next BoE meeting on 3rd November and has the potential to influence the committee members’ policy decisions. With Halloween now the chosen date, I am sure the tabloids will relish the prospect of some creative headlines.
Attention in the States is now turning towards the Q3 earnings season. The banks, as ever, are first up in the next few days, while the following couple of weeks will see some of the world’s largest corporates provide insight into how the wider macro picture has affected their bottom line. Previously they had dealt well with supply chain and inflationary pressures but the recent surge in the dollar could also act as a further headwind for many.
Staying focused on the long-term potential of an investment remains at the heart of everything we do here at MHA Caves Wealth. When the markets are very volatile and the media is full of doomsday predictions about the period ahead, it pays to keep in mind the words of US radio presenter Paul Harvey: “in times like these, it helps to recall that there have always been times like these.”
John Naylor, Chartered FCSI – Head of Investment Committee