Tatton Weekly: Sterling plunges, Gold price falls through critical $1,300 level, UK economic growth back on track?

Politics are back – £-Sterling plunges – again!;  UK economic growth back on track?;  Devaluation metrics: Pounds, pence and common cents;  US Q3 company earnings season preview;  Gold price falls through critical $1,300 level;  Global property investment volumes decline for the first time in 7 years

Politics are back – £-Sterling plunges – again!

There is a distinct possibility that, in terms of investment time horizons, we may have once again experienced one of those periods where, just like the proverbial buses, we get all the returns at once (or upfront), meaning we might have to wait for a while before the next ‘wave’ comes through.

UK economic growth back on track?

The surprise bill of health that the PMI surveys have brought has led to serious doubts over whether the Bank of England will prepare more stimulus to offset the impact of June’s referendum at November’s MPC meeting.

Devaluation metrics: Pounds, pence and common cents

As to the causes of the depreciation in £-Sterling, we believe the movements were triggered by Government statements and policy, and are indicative of more fundamental underlying market concerns about the prospects for the UK economy. Just as a currency ‘devaluation’ can provide a short-term stimulus to an economy, it can also bring long-term side-effects.

US Q3 company earnings season preview 

If earnings do indeed fall -2.1% and the index posts a Q3 decline in earnings, then it would mark the first time that the S&P 500 has recorded six straight quarters of year-on-year declines in earnings since Factset began collecting such data in Q3 2008.

Gold price falls through critical $1,300 level

The big move below $1,300 appears to be a fairly significant break of gold’s recent bullish uptrend and we may see further dips as investors seek to sell into any rallies.

Global property investment volumes decline for the first time in 7 years

The small drop has left investors wondering if this marked a temporary pause or if we had reached a peak in the current market cycle for property, despite demand for property investments remaining relatively robust.

A different and more positive interpretation of the drop in further property investment volumes can be that as the Global economic uptrend continues to stabilise, investors are beginning to venture back into higher risk – higher return investment opportunities.

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