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Markets have been weak cialis holland apotheke. Commodity prices are still falling. Currency wars are endemic. On the face of it, not a great time to be an investor. The last week’s focus has been on China with volatility in stock markets caused by a sharp depreciation on the yuan (China’s currency), which many commentators have assumed means the Chinese economy has slowed sharply. By depreciating the yuan, Chinese exports become cheaper and more attractive on a world stage. However, this will probably lead to falling prices for various goods, something most central bankers want to avoid as they are all busily stoking inflation.

The obsession with the timing of the first interest rate increase in both the US and UK is fascinating. But think about it for a minute and you will realise that the Bank of England and the US Federal Reserve will only put rates up when the economy is strong enough to take it, i.e. when it no longer needs a stimulus. So rate increases in the long term should be applauded but central bankers have moved on from simple inflation as the key measure and appear to be waiting for wage growth to pick up strongly prior to making a move.

The commodity sector, mainly oil and mining companies, have had a torrid time of late as commodity prices have collapsed due to over-supply in the case of oil and under-demand in many commodities (as China has slowed). These companies make up a large part of the FTSE 100, the index of companies you will hear most about, helping drag it downwards. The FTSE 100 is at a 7 month low, whereas many commodity companies are at 7 year lows.

I am still of the view that for investors shares look the best value, especially after the recent near 10% correction (in the UK). That said, there are enough concerns on a global basis to be cautious at present so I would not commit to being ‘bullish’ just yet. Brave investors may want to take advantage however and use recent falls as a buying opportunity.

Shore Financial Planning’s Ben Yearsley on the markets
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