August’s markets in brief | HK Wealth

On the Brexit front, August saw no real progress towards a deal on either side. Theresa May even announced that a no-deal Brexit ‘wouldn’t be the end of the world’. Perhaps not. But it still could signal the end of the UK’s 200 year reign as a significant player in the world economy.

The FTSE performed badly this month, finishing the month down 4% at 7,432. The pound also fell during the month by 1% against the dollar. All in all, not a great month for the British economy.

While Britain’s attempts to distance itself from Europe are cloaked in uncertainty, across the pond the US’s attempts to complicate economic ties with… well, just about everyone, show no such ambivalence and ambiguity. This month, Trump threatened to pull out of the World Trade Organisation and doubled tariffs on Turkish aluminium and steel, causing the lira to plummet.

Whatever you think of Trump’s protectionist policies, by the end of the month the US was awash with good economic news. Figures released in August announced that the US economy had grown at an annualised rate of 4.2% and the Dow Jones finished the month up 2% at 25,964.

In the Far East, continuing worries about a US-China trade war are wreaking havoc on the Chinese markets. In August, the Shanghai Composite index was down by 5% and Hong Kong did only slightly better, falling by just 2%. However, across the Sea of Japan, the Japanese markets closed up by 1% as the island nation’s economy returned to growth.

Emerging markets have had a typically turbulent month. In South America, Venezuela is in a state of full blown crisis. Food scarcity and violence have driven millions to emigrate into neighbouring countries. All this in a country with the largest oil reserves in the world. Argentina’s markets have also had a poor month, with the interest rates rising to 60% to prop up the flailing peso.

What an unsettled month. Hopefully the global markets are less of a mixed bag next month, something of an Indian summer remains a possibility.