Wyn Thomas - Axys Investment Management

Weekly Market Commentary 12th July 2019

UK NAVY BLOCKS IRANIAN ATTEMPT TO CAPTURE BP TANKER

This week saw the UK get dragged into the simmering Middle East conflict between the US and Iran, when the Royal Navy had to intervene to prevent the Iranians from seizing a British tanker in the key shipping lane of the Strait of Hormuz. While this act of aggression has got a lot of attention, it follows on from the UK seizing an Iranian oil tanker off the coast of Gibraltar last week and arresting the Captain. While the ship was suspected of breaking sanctions on Syria, the retaliation was hardly unexpected. This tit for tat state sponsored piracy can probably be resolved without further escalation. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 5th July 2019

EXPLORING THE DIVERGENCE BETWEEN EUROPE AND THE US

This week was nicely summed up by president Trump’s July 4th reimagining of the 1776 revolutionary war to include ye olde airports; incoherent markets with soft expectations fantasies winning out over hard reality. Equities rallied on talk that US and China might restart trade talks, despite data showing that manufacturing sectors in both China and the US have seen a slump in activity. Home purchases have been picking up, but construction has been falling and consumer confidence has risen while business sentiment has deteriorated. It will be interesting to see if shopper’s refusal to acknowledge a slowing economy will actually make a recession less likely. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 21st June 2019

TRUMP REVERSES COURSE ON IRAN

This week tensions between the US and Iran almost boiled over into full blown conflict; President Trump launched strikes against Iranian radar and missile installations, only to call them back at the last moment. Whilst overt hostility was avoided this time, it seems inevitable that the cold war turns hot eventually. The Trump administration, led by national security adviser John Bolton who was instrumental in the Iraq war, is pursuing a policy of trying to crush Iran economically to force regime change; the regime is unlikely to go willingly. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 14th June 2019

ONE COUNTRY, TWO SYSTEMS

This week, while Tory party hopefuls all clamour for the chance to sit in the captain’s chair on the Titanic, another democracy is also on the brink of collapse. Protests in Hong Kong over changes to the Island’s governance structure saw thousands hit the streets, despite a violent clampdown from Chinese authorities. The “one country, two systems” arrangement, that has allowed a form of democracy to exist in Hong Kong since the British handed control back to the Chinese in 1997, looks to have come to an end. While China has been undermining this system for years, new rules allowing Honkongers to be arrested and extradited by mainland Chinese police has finally killed off its quasi-independence. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 31st May 2019

TRUMP THREATENS MEXICO WITH TARIFFS OVER IMMIGRATION ROW

This week markets have been rattled by a further escalation in Donald Trump’s trade war, when he opened a new front with Mexico. Despite renegotiating the NAFTA agreement more to his liking, he has now threatened to impose tariffs unless Mexico does something to stem the flow of immigrants crossing the Southern border. This comes in the same week that the confrontation with China spilled over into diplomatic channels, with the UK taking fire for defying American orders not to work with Chinese telecoms firm Huawei. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 24th May 2019

THERESA MAY CONFIRMS RESIGNATION

This week we witnessed another Conservative Prime Minister reduced to rubble over Brexit, whoever ends up replacing her in Number 10 will likely suffer the same fate. Ultimately, she was undone by refusing to acknowledge a simple truth; leaving the EU will be complicated, lengthy and painful. Until that truth is confronted we’re doomed to repeat the same pattern; construct a fantasy, have it blown apart by reality, fail, resign. All the while allowing the anger and betrayal vote to swell making the country ever harder to govern. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 17th May 2019

MARKETS REMAIN UNUSUALLY CALM AMIDST ESCALATING

TENSIONSThis week, despite the escalating trade war with China and a growing possibility of an actual war with Iran, US markets largely shrugged off rising uncertainty. While we are advocates for ignoring the noise and focusing on the long term, this still seems unusually zen. While it’s possible that the erratic behaviour of President Trump is now fully priced in, it could also be that the market has now become complacent and is too heavily discounting anything serious happening. The latter is more likely, which means a violent reaction to these events could still be on the cards if expectations shift. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 10th May 2019

NEW TARIFFS MARK LAST GASP BID TO FORCE TRADE DEAL

This week the collapsing state of US-China trade relations has roiled markets. Talks appeared to have broken down after US trade negotiator, Robert Lightizer, accused China of reneging on what little the two countries had already agreed on. The opening shots in a new trade war have already been fired, with President Trump confirming he’s increasing tariffs on $200bn worth of imports. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 3rd May 2019

FEDERAL RESERVE CHAIRMAN CONTINUES TO DEFY MARKET EXPECTATIONS

This week, while we await the results from local council elections, there was a chance to indulge in the sport of interest rate speculation; an old favourite from “the before times” when simple things like the strength of the global economy were all we had to worry about. New Federal Reserve Chairman Jerome Powel is proving to be a difficult opponent, with a knack of contradicting himself every few weeks and shaking off the pack who might have been coming close to guessing his next move. On Wednesday he wrongfooted a market that had become over confident in an upcoming rate cut and sent equities into a bit of a panic. Read more…

Wyn Thomas - Axys Investment Management

Weekly Market Commentary 26th April 2019

EUROPEAN ELECTIONS PUTS BREXIT TALKS ON HOLD

This week, after a delightful break, we get back to Brexiting. True to form, whatever small signs of progress there might have been have evaporated after cross party talks were reported to have ended without progress; it looks likely now that nothing will happen until after the elections. While the European elections are getting all the attention, the more interesting contest is in the local council elections. While the European elections will be fought between Brexit focused fringe parties, that isn’t indicative of a general election. If the Tories get wiped out in the local elections however, that will likely focus the minds of government MPs. A credible opposition threat might stop the party from fighting with itself and unify around a compromise position. Read more…