Tatton Weekly: Trump trade reversal – sign of things to come?; Brexit pains – or ordinary economic fluctuations?; Public purse or private wealth: Re-nationalising the utilities?; Q1 earnings – fairly valued or overvalued?; Insurance accounting rule changes: Another nail in the coffin of annuities?

Trump trade reversal – sign of things to come?

It’s always the same. The moment you comment on an anomaly in the markets, it either ends or is significantly challenged. Last week, I wrote about the eerie calm in the stock markets. This week, Trump’s got himself into so much trouble with the opposition and the press that markets woke up and staged a 1.5% one-day sell-off. It seems that market participants are beginning to accept that president Trump may turn out a liability to stock markets rather than delivering a boost. The press busied itself with speculations about impeachment probabilities and parallels to Richard Nixon, the only US president to ever resign. Supposedly, that’s where markets took fright and volatility returned swiftly.

Brexit pains – or ordinary economic fluctuations?

As was widely reported in the news media last week, the Office for National Statistics (ONS) has calculated that real wages in the UK have fallen for the first time in three years. The ONS report showed that, while average nominal weekly wage growth over the three months to March was 4 2.1% higher than a year ago, CPI inflation rose 2.3% over the same period, taking real wage growth negative by cancelling out any gains in purchasing power for workers.

Public purse or private wealth: Re-nationalising the utilities?

It has been interesting this week to compare and contrast the underlying economic principles in the Labour and Conservative manifestos. One would expect a clear ideological divide, but is this the case?

Q1 earnings – fairly valued or overvalued?

Now that the Q1 earnings season is mostly complete, our analysis indicates that European companies were the key standout of what was a strong quarter for all regions. However, the bar for the next quarter has clearly been raised, and investors might view the recent weakness in commodity prices and flatter activity in leading economic indicators as a driver for softer EPS momentum in the medium-term.

Insurance accounting rule changes: Another nail in the coffin of annuities?

Beneath the headlines about the UK’s finance sector appearing to turn a corner (following the full ‘re-privatisation’ of Lloyds Banking Group), lurked the news of changes to accounting rules that could have significant implications for the $13 trillion insurance industry worldwide, particularly for UK life assurance firms who provide annuities.

Please click here to read the full Tatton commentary.