WEEKEND WEB: Economy data boost brings positive signs
SCOTT WOODS brings us his weekly view on the global economy
Euro-area company shares outperformed after a report showed that jobs growth and new manufacturing orders rose to 17-year highs; on the back of the figures, the euro gained against the US dollar for a third straight week. Energy stocks were among the strongest performers globally, as oil prices continued to rally.
• Billed as the most significant Budget in years, it proved to be something of a non-event for UK investors. Shares in housebuilders fell slightly before bouncing on news that, despite Chancellor Philip Hammond’s pledge to build more homes, the government would review the practice of ‘land banking’ (where land with planning applications remains undeveloped). Drinks companies, such as Diageo, traditionally affected by fiscal tinkering, moved little. The biggest headlines came from the sharp slowdown in UK growth projections by the independent Office for Budget Responsibility.
• Angela Merkel is struggling to extend her tenure as the EU’s longest-serving leader. The German chancellor, first elected in 2005, has hit an impasse in talks to form a coalition government, following September’s election. If Merkel cannot revive the negotiations between her CDU/CSU bloc, the Free Democrats and the Greens, or forge an alliance with the Social Democrats, the chancellor may call fresh elections. Still, investors have reacted calmly, with German equities only underperforming the broader European share index slightly.
Source of information Old Mutual Global Investors (OMGI).
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