Eyes down for a full house
Big tech investors are not having it all their own way; we have seen Tesla shares lose around 25% of their value so far this year, and Apple’s share price has fallen around 15% from its peak as it announced weak sales of the iPhone in China. The majority of the rest of the Big 7 seem to be keeping their head above water. The S&P fell for the 2nd day running, as did the Nasdaq, halting its robust start to the year.
In other news, Chinese authorities announced their plans to grow their economy by 5% again this year, on top of the 5% they managed just about last year. 5% on 5% on 5% becomes harder each year.
Ahead of today’s budget, which is more than likely to be a damp squib, as is usually the case, most of it leaked in advance. The main announcement is likely to be a 2p cut in National Insurance. He will apparently pinch, hitting non-doms from the Labour Party, hit oil companies again and probably smokers and drinkers. Most Chancellors usually find a way to raid our pensions, no sign inheritance tax will change. It will be surprising if the Chancellor does anything that revives the incumbent government’s popularity. Rumours are also starting to circulate Mr Sunak is contemplating calling a May election, not October as was expected.
One thing, it seems people are getting more optimistic about the UK economy. Pantheon Research now forecasts that next week’s GDP report will, in their words, leave last year’s minor recession behind. Retail sales in January jumped 3.4%, leading to Pantheon forecasting that the UK economy will grow by 0.2% month on month. Business and consumer confidence surveys are also pointing to an uptick in the UK economy. Bloomberg ran a report quoting several UK company CEOs talking about an improvement in the outlook for the UK economy, including British Land’s CEO claiming demand for office space is on the up. Perhaps if big tech loses its shine for a while, and investors become more optimistic on the UK economy, which should help sterling, it’s possible UK stocks may return to favour.
Election fever will soon be upon us, it looks as if Mr Trump is heading back to the Whitehouse, at this moment anyway. Although according to one political commentator around 70% of Americans would rather have an alternative to Mr Biden or Mr Trump. Mr Sunak may be unpopular but Mr Starmer may well reach the doors of N0 10, not from his own charisma, but from the general unpopularity of the man who currently holds the keys. The UK will likely lurch to the left as the rest of Europe will likely lurch to the right.
For now its eyes down for a full house as Mr Hunt takes the stage.