- Libor, the London Interbank Offer Rate, is set to be phased out, after the head of the UK Financial Conduct Authority, has said it will be replaced by a reliable alternative by 2021. At its peak, the Libor benchmark was used to price upwards of $350tn of financial products.
- As expected, the Federal Reserve kept rates unchanged at their latest meeting and cited that they would look to start the unwind of their bond holdings relatively soon, as long as moderate economic growth continues.
- Following a strong earnings season on Wall Street, many of the major US stock indices again reached record highs. The S&P500 in particular has now had its 30th closing high of this year.
- For the first time in almost three years, Greece returned to the sovereign bond market, issuing a €3bn 5 year bond, which was more than twice subscribed.
- On Thursday, 3 August we have the UK Bank of England decision on the official bank rate, with market expectations of no change and for this rate to remain at 0.25%.
- On Friday, 4 August we will see the release of US Nonfarm Payrolls MoM, with expectations that 180,000 workers will be added to business payrolls.
A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.
A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.
A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.
*as at latest realignment 17/07/17
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.