The recent rally in the US stock market, with a particular focus on technology shares, has prompted several companies to tap the market for additional funding. These funds have been raised using convertible bonds, a hybrid of equity and corporate bonds. Why is interest in convertible bonds so strong, and what could this indicate about market valuations?
It’s not easy being a Chancellor in the run-up to the next election, looking to balance a look of fiscal responsibility against blatant pre-election giveaways. While there were a few headline-grabbing moves, there were no big surprises or giveaways, and it looks like it will be a tricky few months for the Conservative Party.
As we wait for interest rates to fall in the UK, the FinTech market is back in play. The signs are favourable again after a volatile couple of years due to various global economic and political challenges.
As we approach the next budget, due to be announced on 6 March 2024, there is the normal degree of speculation and counter-speculation. With an election likely to be called later this year, the government will be looking to cast the best light on the UK economy and return an element of the feel-good factor to taxpayers. How might this emerge?
Whether looking at the US, UK or further afield, there is much concern and confusion regarding economies and the timing of expected interest rate reductions. While inflation data suggests these changes could come sooner rather than later, economic figures can often suggest otherwise. However, it is widely expected that interest rates will fall in 2024 and into 2025, which has prompted private and institutional investors to look towards the corporate bond market.
Investing in stock markets worldwide has never been easier, with the introduction of the Internet facilitating the development of electronic trading. However, when it comes to market integrity, this is a topic which many of us automatically take for granted. Without a degree of market integrity, there would be no confidence and trading numbers would be nowhere near current levels.
Amid the Covid pandemic, emerging market borrowing costs went through the roof, investors sat on the sidelines, and many of these economies fell into distress. Only recently have investors begun to reconsider emerging market bonds as expectations of the US, UK and other major economies reducing their interest rates begin to reduce the pressure. So, what is happening with emerging market bonds and is this the beginning of a concerted recovery?
As the investment world becomes increasingly technical, you can now use option derivatives for hedging, income generation or speculative investment purposes. While taking advice if you are inexperienced in this area is essential, using options can help you replicate any investment strategy and attitude to risk. So, where do we start?
Diversification is the key to long-term investment returns, with defensive exposure outperforming relatively when markets fall and growth stocks outperforming when the markets move ahead. This brings us to the issue of beta, which is a measure of volatility against a benchmark, such as a gilt or an index, such as the S&P 500 or FTSE 100.
While algorithmic trading strategies have been increasing over recent years, 2024 is likely to see significant developments in this area with the adoption of and improvements in AI. This is a topic which attracts very different opinions and is often controversial. So, what is algorithmic trading, and is it ethical?