>Stocks, bonds slumped following new fiscal measures on Friday
>
>UK markets feel like ‘the wild west,’ AJ Bell’s Hewson says
>
>The UK’s stock and bond markets have lost at least $500 billion in combined value since Liz Truss took over as Prime Minister, with investor confidence shattered by a shock tax-cutting budget.
>
>Taking the helm at a time when the UK economy was already grappling with the specter of recession, the Truss government’s new fiscal policies fueled concerns that inflation and borrowing would surge at a time of rapidly rising interest rates. That triggered a cross-asset selloff so severe that it sent the pound to a record low and sparked chatter about emergency action by the Bank of England.
>
>“Confidence in the UK has been sideswiped amid a pile-on of worries about the economic outlook and the direction of travel being taken by the Truss administration,” said Susannah Streeter, senior analyst at Hargreaves Lansdown. “Only a U-turn in the slash-and-spend policies is likely to significantly restore optimism, but the administration is digging in its heels.”
>
>The FTSE 350 Index — which comprises stocks in the export-heavy FTSE 100 and the domestically focused FTSE 250 — has now lost more than $300 billion in market capitalization since Sept. 5, when Truss was confirmed leader of the Conservative Party. In that time, a UK government bond index has lost over £160 billion ($173 billion) in market value, according to data compiled by Bloomberg. The rate on 10-year government bonds has risen by over one percentage point to surpass 4% for the first time since 2010.
>
>“What the UK government has done is said, ‘to hell with the inflation outlook, let’s just think about growth’,” said Seema Shah, chief strategist at Principal Global Investors. “Bond yields are only going to go higher and undo a lot of that positive economic movement from the tax cuts,” she said in an interview.
>
>Sterling-denominated, investment-grade bonds have also lost $29 billion over the same time, dragging down the market value of a Bloomberg index that tracks the securities to the lowest level since March 2016. A gauge of sterling-denominated junk bonds — of which British companies account for more than 90% — has seen its market value drop by $1.4 billion.
>
>To be sure, with bond holders more likely to buy and hold until maturity, the selloff in bonds is relatively smaller when compared to other assets. On Tuesday, UK bonds had recovered some ground and the pound was headed for its biggest rally in months.
>
>For stocks, the measures put at risk the FTSE 100’s outperformance this year, which has been reinforced by its exporter-heavy members. The index is down about 5% so far in 2022, compared with about a 20% slump in the Stoxx 600 Index, but its lead has narrowed in September.
>
>“Far from being the safe pair of hands investors have been used to, the UK seems more like the wild west at the moment,” said Danni Hewson, a financial analyst at AJ Bell.
>
>— With assistance by Greg Ritchie, James Hirai, and Tasos Vossos
Im impressed by the sheer stupidity of the tories.
I have a question for Brits and people who know british politics better than I do : what would in your opinion the UK look like today if Ed Milliband hadn’t been struggling with a sandwich ?
Same shit different people ?
Oh, well, the markets, often they resemble a bunch of hysterical mothers-in-law.
Tabloid level financial reporting.
Euro Area markets have lost trillions since Liz Truss took over. US markets likewise.
The fact is that bonds and equities have sold off heavily over the past few weeks, basically everywhere. Now, the repricing (of bonds in particular) has been especially acute in the UK due to the poor reception of last week’s uncosted mini-budget, but let’s not delude ourselves and pretend that there hasn’t been a significant fall in the market value of fixed income and equity assets in other jurisdiction.
Sadly, the UK is not going to be an isolated case, it’s just the first mover. As European governments gradually update their fiscal forecasts for 2023, with significant upward revisions to the deficits, and far weaker expectations for growth, the repricing will eventually happen. This will be especially true if the ECB gets around to stopping QE.
TLDR: Markets in every jurisdiction have lost “a big scary number” in value in the last few days/weeks, the $500bn number for the UK is a bit meaningless on its own without also showing what the same is for other countries.
**Edit**: Just to add some sort of context, the FTSE MIB (Italy’s major stock index), has lost $100bn in the last 2 weeks. The FTSE (UK) has lost $350bn over the same period BUT this index is 5 times bigger than FTSE MIB. The German DAX (a little over half the size of the FTSE) has lost $200bn, whilst the S&P 500 has lost $4000bn (yes, 4 trillion).
**Edit 2**: Oh look, OP (surprised this troll hasn’t been banned yet) has blocked me for having the audacity to introduce just a little context into their anti-UK circle jerk. If you disagree with me, that’s fine, provide a counterargument. Trying to shut down people you disagree with just shows how you want an echo chamber and only an echo chamber.
Weird how the British right has gutted the nation and ruined almost everything and yet still have broad support
7 comments
>Stocks, bonds slumped following new fiscal measures on Friday
>
>UK markets feel like ‘the wild west,’ AJ Bell’s Hewson says
>
>The UK’s stock and bond markets have lost at least $500 billion in combined value since Liz Truss took over as Prime Minister, with investor confidence shattered by a shock tax-cutting budget.
>
>Taking the helm at a time when the UK economy was already grappling with the specter of recession, the Truss government’s new fiscal policies fueled concerns that inflation and borrowing would surge at a time of rapidly rising interest rates. That triggered a cross-asset selloff so severe that it sent the pound to a record low and sparked chatter about emergency action by the Bank of England.
>
>“Confidence in the UK has been sideswiped amid a pile-on of worries about the economic outlook and the direction of travel being taken by the Truss administration,” said Susannah Streeter, senior analyst at Hargreaves Lansdown. “Only a U-turn in the slash-and-spend policies is likely to significantly restore optimism, but the administration is digging in its heels.”
>
>The FTSE 350 Index — which comprises stocks in the export-heavy FTSE 100 and the domestically focused FTSE 250 — has now lost more than $300 billion in market capitalization since Sept. 5, when Truss was confirmed leader of the Conservative Party. In that time, a UK government bond index has lost over £160 billion ($173 billion) in market value, according to data compiled by Bloomberg. The rate on 10-year government bonds has risen by over one percentage point to surpass 4% for the first time since 2010.
>
>“What the UK government has done is said, ‘to hell with the inflation outlook, let’s just think about growth’,” said Seema Shah, chief strategist at Principal Global Investors. “Bond yields are only going to go higher and undo a lot of that positive economic movement from the tax cuts,” she said in an interview.
>
>Sterling-denominated, investment-grade bonds have also lost $29 billion over the same time, dragging down the market value of a Bloomberg index that tracks the securities to the lowest level since March 2016. A gauge of sterling-denominated junk bonds — of which British companies account for more than 90% — has seen its market value drop by $1.4 billion.
>
>To be sure, with bond holders more likely to buy and hold until maturity, the selloff in bonds is relatively smaller when compared to other assets. On Tuesday, UK bonds had recovered some ground and the pound was headed for its biggest rally in months.
>
>For stocks, the measures put at risk the FTSE 100’s outperformance this year, which has been reinforced by its exporter-heavy members. The index is down about 5% so far in 2022, compared with about a 20% slump in the Stoxx 600 Index, but its lead has narrowed in September.
>
>“Far from being the safe pair of hands investors have been used to, the UK seems more like the wild west at the moment,” said Danni Hewson, a financial analyst at AJ Bell.
>
>— With assistance by Greg Ritchie, James Hirai, and Tasos Vossos
Im impressed by the sheer stupidity of the tories.
I have a question for Brits and people who know british politics better than I do : what would in your opinion the UK look like today if Ed Milliband hadn’t been struggling with a sandwich ?
Same shit different people ?
Oh, well, the markets, often they resemble a bunch of hysterical mothers-in-law.
Tabloid level financial reporting.
Euro Area markets have lost trillions since Liz Truss took over. US markets likewise.
The fact is that bonds and equities have sold off heavily over the past few weeks, basically everywhere. Now, the repricing (of bonds in particular) has been especially acute in the UK due to the poor reception of last week’s uncosted mini-budget, but let’s not delude ourselves and pretend that there hasn’t been a significant fall in the market value of fixed income and equity assets in other jurisdiction.
Sadly, the UK is not going to be an isolated case, it’s just the first mover. As European governments gradually update their fiscal forecasts for 2023, with significant upward revisions to the deficits, and far weaker expectations for growth, the repricing will eventually happen. This will be especially true if the ECB gets around to stopping QE.
TLDR: Markets in every jurisdiction have lost “a big scary number” in value in the last few days/weeks, the $500bn number for the UK is a bit meaningless on its own without also showing what the same is for other countries.
**Edit**: Just to add some sort of context, the FTSE MIB (Italy’s major stock index), has lost $100bn in the last 2 weeks. The FTSE (UK) has lost $350bn over the same period BUT this index is 5 times bigger than FTSE MIB. The German DAX (a little over half the size of the FTSE) has lost $200bn, whilst the S&P 500 has lost $4000bn (yes, 4 trillion).
**Edit 2**: Oh look, OP (surprised this troll hasn’t been banned yet) has blocked me for having the audacity to introduce just a little context into their anti-UK circle jerk. If you disagree with me, that’s fine, provide a counterargument. Trying to shut down people you disagree with just shows how you want an echo chamber and only an echo chamber.
Weird how the British right has gutted the nation and ruined almost everything and yet still have broad support
This but a flesh wound