MONEY MATTERS: Troubles for Trump sees bonds blow

Scott Woods
Scott Woods
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Global stock markets pulled back, with the MSCI All Country World Index retreating from close to a record peak, as US President Donald Trump faced mounting controversies surrounding Russia and a political crisis shook Brazil.

As a result, shares in utility companies, which investors tend to favour as relatively-stable stocks, topped the leader board on the index.

Developed-market government debt, which is perceived as a ‘safe haven’ of sorts, was also in demand; the yield on 10-year US Treasury bonds, which moves inversely to prices, dropped to a one-month low.

With less than four months under his belt as US president, bookies are busy taking bets on Trump’s early departure from the White House.

Dogged by rumours of collusion with Russia during his campaign, Trump has clashed with the media and US security agencies. Following Trump’s dismissal of FBI director James Comey and allegations he shared classified information with Russian diplomats, the Department of Justice appointed a special counsel to investigate ties between his election campaign and Russia. The US dollar, having risen sharply after the election last year, has since lost all ground gained.

The WannaCry ransomware virus, which infected hundreds of thousands of computers, illegally encrypting their data and demanding payments, sparked a rally in tech stocks. Shares in Microsoft initially rose 3 per cent, on the expectation more companies might upgrade their operating systems.

IT security company Palo Alto Networks rose 5 per cent and the ISE cyber security index 4 per cent. All fell back later in the week.

Shares in UK-based IT security company Sophos leapt by 17% and maintained.

The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.