Moola July Market Commentary

Posted by Simon Moore on July 31
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A Positive Month For Markets

July has, at the time of writing, been a broadly positive month for the global markets. British shares have recovered from the lows seen in March of this year, and international markets are on the more positive side of up and down moves we've seen for most of 2018. The picture for bonds is broadly positive as well as yields on British government debt has fallen, pushing up bond prices (bond prices generally rise when yields fall).

Brexit Headlines Continue

Brexit headlines have continued as the Prime Minister revealed more details of the UK's negotiating plans. It's important to remember that much of your Moola portfolio is invested globally, often using currency hedging to help control currency swings on your investments. This potentially softens the impact of the ups and downs of Brexit on your portfolio, relative to someone who only invests in the UK. We have no crystal ball when it comes to Brexit, but, we believe, it's unlikely to be a major driver of globally positioned Moola portfolios.

Trade Tensions

Recently, the United States has imposed tariffs on many trading partners. Tariffs are basically taxes on foreign goods entering a country. These tariffs have increasingly been met by similar tariffs on American exports.

This is potentially a negative for growth because trade is an important part of how many products are made and sold, from cars to iPhones. Higher tariffs could slow the growth of global trade. However, despite this, the global growth picture remains positive, with the global economy expected to grow at around 4% both in 2018 and 2019 on the International Monetary Fund's most recent forecasts.

Overall Picture

2018 appears on course to be a solid, if unspectacular, year for markets, with global growth continuing, and no major region of the world experiencing severe economic problems. China and India are expected to be among the better performing economies in 2018 , with the U.K. and Japan seeing lower, but still positive growth, on most estimates.

Written by Simon Moore

He was previously CIO of FutureAdvisor, a US digital advisor. His most recent book Digital Wealth, explains automated investing. He studied economics at Oxford, and completed his MBA at the Kellogg School of Management.

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