The third quarter is over for investment markets. It looks like a fairly flat year so far, although a volatile September has pulled down equity returns. Here is a brief summary of the main points so far.
- The UK stockmarket has gone virtually nowhere in the first 9 months. The FTSE 100 dipped below 6,600 in August and has still failed to reach 6,900 so far this year. Overall the FTSE 100 is down 1.87% over the year.
- The US stockmarket has outperformed the UK (despite tapering of quantitative easing) and the US dollar has strengthened against all other currencies including sterling. Overall the S&P 500 is up 6.7% over the year.
- The Euro stockmarkets have held up relatively well considering the economic problems of the Eurozone. However the Euro has declined sharply against both sterling (down 6.3%) and US dollar (down 8.3%). Overall the Euro Stoxx 50 is up 3.7% on the year.
- 10 year Government bond yields dropped further despite predictions at the start of the year. However 2 year Government bond yields increased in both the UK and the USA with the expectations of interest rate rises in the near future.
- UK property has done well this year, both commercial and residential. Over the year, the commercial property index is up 14.9%.
- Most commodities have been weak through this year. Iron ore for instance is down 40% since the start of the year.
As to the next 3 months?
We have the end of QE in the US (and possibly the start of QE in the Eurozone). In the UK an interest rate rise moves ever closer (as does the General Election!).
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