id I state last week that September had been a good month for stock markets? Well, looking at the above table, one must assume I made a mistake. Let me set the record straight: It was a good month in global equity markets, just not from a £-Sterling perspective. As the UK’s currency recovered some of its previous losses against other major currencies, naturally investment assets valued in those currencies declined in value, even if they rose in local currency terms. The same is true for overseas earnings of UK domiciled multi nationals and, with them dominating the FTSE100, the UK market’s main representative index was down as well.
Last year, the experience was the opposite, as £-Sterling fell, investors’ overseas assets rose in GBP terms, even if they were treading water in local terms. Overall then, was September a good or bad month for investors? I would say it was good, unless you desperately wanted to withdraw cash from your investments.
Good, because the rise in global risk asset markets has been somewhat reassuring for investors. Capital markets are seemingly not overly worried about the central bank’s widely broadcast determination to gradually end the era of ultra-accommodative monetary policy. That tells us that, compared to the ‘Taper-Tantrum’ period of 2013 (the first time monetary policy tightening was even mentioned), market participants do not appear to view this a dead certain threat to further global economic expansion.
