Global shifts and UK opportunities
As we progress through 2024, the financial markets are navigating through a period of significant change. Our recent webinar, featuring Wayne Bishop from King and Shaxson, provided valuable insights into these shifts. This article consolidates key points from our discussion, offering a comprehensive overview of current market dynamics and future opportunities.
The evolving ESG and impact investing space
The landscape of ESG (Environmental, Social, and Governance) and impact investing has been shifting. While impact investing outperformed during the COVID-19 pandemic, recent market trends have seen a convergence with more traditional ESG approaches. Nevertheless, certain sectors remain promising:
- Renewable energy: Despite challenges, the renewable energy sector is rebounding. Global energy security concerns are spurring renewed interest, particularly in major projects in the US.
- Water management and healthcare: Companies involved in water management and healthcare are performing well. Innovations in AI and novel disease treatments are driving growth in these sectors.
The UK market: Emerging opportunities
The UK market, previously overshadowed by Brexit uncertainties, is gaining renewed interest:
- Sterling’s strength: The British pound has recently strengthened, driven by perceived political stability, better-than-expected GDP data, and improved investor sentiment.
- Political and economic factors: The recent election results favouring a Labour government could enhance market stability and stimulate investment in infrastructure and real estate.
Interest rates and economic outlook
Interest rate expectations are a key area of focus:
- Global trends: Markets are anticipating potential interest rate cuts from major central banks. The US Federal Reserve might cut rates as early as September, while the European Central Bank has already implemented a cut and may consider further reductions.
- UK’s position: The Bank of England's approach remains uncertain, with rate cuts potentially lagging behind other economies. The anticipated cuts could make infrastructure investments more appealing.
Equity market views
Equities are performing well but caution is warranted due to the late stage of the economic cycle:
- US equities: Large-cap technology stocks continue to lead the market.
- UK equities: With lower valuations and strong sector exposure, UK equities are increasingly attractive.
Risks and considerations
Several risks need to be monitored:
- Geopolitical uncertainties: Ongoing conflicts and political developments could impact markets.
- Inflationary pressures: Potential inflationary spikes, influenced by global political outcomes, warrant attention.
- Trade tensions: Ongoing trade issues could affect global economic growth.
Stay informed
To explore these market dynamics in greater detail and understand how they could impact your investment strategy, watch the full June investment market update webinar. In this session, Wayne Bishop from King and Shaxson discusses the evolving market trends and opportunities with insights into the UK market and beyond. Don’t miss out on their expert analysis and actionable insights. Watch the webinar here.
This market update is for informational purposes only and does not constitute investment advice. The value of investments can go down as well as up, and you may get back less than you invest.
