Gerald Fitzgerald’s Market Review 26th August

LAST WEEK IN 30 SECONDS...

Volatility prevailed last week as markets being starved of direction saw periods of risk on and risk off. The week finished with a sharp sting in the tail as China upped the ante raising tariffs on $75bn of US goods, sending the NASDAQ 3% lower for the day alone. With retaliations expected this game of chess is far from finished.

US Federal Reserve Chairman Jerome Powell gave few clues to markets on Friday noting the US Fed would “act as appropriate” but the lack of strong guidance or direction was met coldly from a political perspective. Gold continued to trend higher and was up over 1.7% for the week whilst movements in high quality government bond yields including the US and Germany were broadly flat for the week.

THIS WEEK IN 30 SECONDS...

From an economic data perspective this week, a close eye will be kept on German consumer sentiment and retail sales data releases as the economy struggles under the impact of slowing global growth.

Eurozone and US inflation metrics are due for release on Friday. With inflation lagging and the market generally uncomfortable, further guidance from both the US Federal Reserve and European Central Bank will be sought to assuage public fears of an impending recession.

TIMING YOUR INVESTMENT SWITCH

Missing out on a relatively small number of days in the market can have a significant impact on your long term returns. Missing out on the best 20 days over the past 30 years in the FTSE All Share index effectively would have cost an investor over £6k for every £1k invested. Trying to time investment switches may be opportunistic, but can ultimately come at a cost.