Courtiers Wealth Management
Courtiers Wealth Management

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August 2018 – Market Update

Market update

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There were two big-name departures in UK politics last month as Brexit secretary David Davis and Foreign Secretary Boris Johnson both resigned from Theresa May’s cabinet within a day of each other. Neither of them were happy with May’s Brexit strategy, which includes a common rulebook for all goods and no hard Irish border. Neither the UK stock market nor sterling were particularly spooked by the back-to-back departures, as the FTSE 100 gained +0.92% and sterling lost just -0.17% versus the dollar on the day of the announcements.

Facebook broke an unwanted record last week as it suffered the largest one-day loss in US stock market history. When the tech giant released its quarterly results on 26th July, the share price plummeted -18.96%, wiping $120.9 billion from the value of the company. This is the first time a US company has shed more than $100 billion in one day, and surpasses the $90.7 billion lost by Intel during the tech bubble burst in September 2000. The quarterly results included weaker-than-expected revenue and a disappointing number of global daily active users. Meanwhile, Apple is enjoying better fortunes as it has just become the first US company to exceed $1 trillion in value.

After months of speculation, yesterday the Bank of England increased the base interest rate to 0.75%, following a unanimous 9-0 decision from the monetary policy committee members. This comes nine months after the rate was increased to 0.50% from its all-time low of 0.25%.

July was a mostly positive month for equity markets. The FTSE 100 index gained +1.52%, but medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index, slipped -0.06% and -1.04% respectively. In the US, the S&P 500 index picked up +3.72%, while in Europe the Eurostoxx index earned +3.96%. The Topix index, which measures Japanese equities, increased +1.30%.

Emerging market returns were also mostly positive, as the MSCI Emerging Markets index rose +1.78%. Latin American equities, measured by the MSCI Latin America index, performed particularly well as they surged +6.03%, but Chinese equities continued to struggle as the MSCI China index declined -2.38%. In India, the IISL Nifty 50 PR index lifted +5.99%.

Fixed income returns were mixed. UK government bonds, measured by the FTSE Gilts All Stocks index, lost -0.35% and long dated (over 15 years to maturity) gilts dipped -0.60%. In the corporate market, European corporate bonds, measured by the Markit iBoxx Euro Corporates index, rose +0.28% while sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, returned +0.30%. In the high yield market, the Bank of America Merrill Lynch Euro High Yield index and the Bank of America Merrill Lynch Sterling High Yield index gathered +1.56% and +0.92% respectively.

In the commodities market, the S&P GSCI index, which consists of a basket of commodities including oil, metals and agricultural items, fell -3.53%. Oil suffered a turbulent month, as the price of a crude oil contract sank -7.27%. The precious metals also struggled, with the S&P GSCI Gold and Silver indices shedding -2.37% and -3.78% respectively. The agricultural markets meanwhile saw prices rising with the warm weather as corn and wheat gathered +4.11% and +10.47% respectively.

In the FX market, sterling lost ground against most major currencies. The US dollar and the euro both appreciated against the pound by +0.63% and +0.67% respectively.

(All the above returns are reflected on a local currency basis i.e. they do not factor in any relevant currency movements. Unless accompanied by PR (Price Return), they do include income).

Issued by Courtiers Asset Management Limited, CAM0818143. Courtiers Asset Management Limited is Authorised and Regulated by the Financial Conduct Authority – Register No: 616322. Address: 18 Hart Street, Henley on Thames, Oxfordshire RG9 2AU. Telephone: 01491 578368 Fax: 01491 572294 Website:

Warning – the views expressed by Courtiers in this summary and any video and video transcripts, are reached from our own research. Courtiers cannot accept responsibility for any decisions taken as a result of reading this document, watching the featured video or reading the video transcript and investors are recommended to take independent professional advice before effecting transactions. The price of stocks, shares and funds, and the income from them, may fall as well as rise. Past performance is not necessarily a guide to future returns.

We do not endorse nor accept responsibility for the content of any website not operated by Courtiers which you may visit by following a link from this article.

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