COPIERS AND FOLLOWERS UPDATE
Hi everyone, here is another update for you as markets continue to calm and investor sentiment, for the moment, remains positive.
U.S and China reached a consensus on trade after a second day of talks in London and these discussions are an important focus for investors as markets are still jittery when it comes to any sudden moves in trade policy. After both China and the U.S agreed to pause the high tariffs towards each other’s trade a few weeks ago, all eyes are whether a fully ironed-out agreement will materialise anytime soon.
There are a couple of data releases this week I am keeping a close eye on, the first of which is the U.S May CPI inflation figures, which are due out later today. Markets are expecting a relatively soft figure, with any meaningful price rises on the back of trade tariffs not expected to kick in for another couple of months. Anything less positive could set markets back a bit, which brings us on to the other event I am watching this week.
The auctions for U.S 10 year treasury notes and 30 year treasury bonds are happening today and tomorrow respectively and their demand will affect the price and yield. Treasuries have already fallen a fair amount since Trump’s “Liberation Day” and if demand proves to be low and the inflation figures come in hotter than expected, then this might well prove a good opportunity to buy these bonds which are already paying out attractive yields.
I don’t want to keep the remaining 8% cash we have sidelined for too much longer and I am keen to reinstate a bond portion of the portfolio now prices are at a more attractive level. This should now provide somewhat of a hedge if stocks suffer any short-term setbacks, certainly compared to how bonds have performed in the past 18 months or so.
As always, I will of course keep you informed when I do make additions or changes to the portfolio, so please do stay posted for more updates.
All the best for the rest of the week!
Best wishes, Richard.... Show More
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