Three ways to profit as fear returns to global markets – MoneyWeek

By admin, 2020年4月21日

Thatstheshortversion–IllleaveittomycolleagueDavidStevensontogointomoredetailonourblogspage:DarlingignoresBritainsbiggestproblemdebt。

Butfornow,letslookatwhatelsewasgoingonintheworldwhileAlistairDarlingwasmakinghispartypoliticalbroadcastfromthePre-Budgetpulpit

Fearreturnstoglobalmarkets

WhileBritainwasgamelyignoringitsownnasty-lookingbudgetdeficit,globaljitterscontinuedovermoreobviouslytroubledcountries。

StockmarketsacrossEuropeendedthedaylower,afterSpainhaditscreditratingoutlookdowngradedfromstabletonegativebyratingsagencyStandardPoors。

Inotherwords,theagencydidntactuallyslashSpainscreditrating,butitsgettingclosertodoingso。

SPreckonsthatSpainsgovernmenthasntyetdoneenoughtotacklethestateofitsfinancesortheeconomy,andsobothwilldeterioratefurtherthanexpected。

Meanwhile,Greecewhichisinafarworsestateisunderheavypressuretodealwithitsdeficits(youcanreadmoreonGreecesproblemshere:Thebiggestthreatfor2010countriesgoingbust)。

AndwhileDarlingwastryingtodistracttheelectoratewithtaxesonbankersbonuses,hiscounterpartoverinIrelandwasoutliningoneofthemostbrutalbudgetshisbeleagueredcountryhaseverseen。

Inhissecondemergencybudgetineightmonths,IrishfinanceministerBrianLenihancutpublicsectorpaybyupto6%。

Benefitswerealsocut。

Andtherewasevena20%paycutfortheTaoiseach。

(AlthoughthefactthattheheadoftheIrishgovernmentisamongthebestpaidleadersinthefreeworld,doesgiveyousomeideaofwhyIrelandneedstocutpublicsectorpaysosharplynow)。

Irelandseconomyissettoshrinkby7。

5%thisyear,butLenihanhopesthatthecutsshouldpreventthebudgetdeficitfromrisingabove12%ofGDPtheEUhasgivenIrelanduntil2014togetitsdeficitbackbelow3%。

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Dubaisproblemsarentgoingaway

Andacrosstheworld,gettingbacktowheretherecentsurgeinfearsoversovereigndebtkickedoffconcernsoverDubaiarentgoingaway。

Theemiratesawitsstockmarkettakeasharptumbleyesterday。

Itfellbyaround6%,asNakheel,thetroubleddeveloperbehindthepalmtreeislanddevelopment,reporteda£2。

25bnlossforthefirsthalfoftheyear。

Meanwhile,DubaipropertydeveloperEmaarPropertiesabandonedaplannedmergerwiththreereal-estatedivisionsofDubaiHolding,aconglomerateownedbyDubaisruler。

AccordingtotheFT,analystsreckonthenewsmakesitmorelikelythatDubaiHoldingcouldbethenextgrouptoneedtorestructureitsdebts,afterDubaiWorld。

Sotherecouldcertainlybemorenastysurprisesfromthatdirection。

Howtoplaythis

Whatdoesallthismeanforinvestors?

Withgeneraldebtworriesrisingandfewgovernmentsinthemoodtotacklethem,marketsarelikelytoremainjumpyandvulnerabletomoreshocks。

AndasDominicFrisbypointedoutinyesterdaysemail,formostofthisyear,onethinghasgoneupwheneverythingelsehasgonedown–thedollar。

Sohowdoyouplaythis?

Youcouldtakealookat?

spreadbetting(youcanfindalistofvariousprovidershere)。

Butdoalwaysbearinmindthatwhileitdoeshavesomeadvantages(itstaxfreeanditcanbequitegoodfun–whenyourewinning),yourlossesaretheoreticallyunlimited,soyouneedtobeverycareful。

Ifyouaretempted,thengiventhevariousemergingproblemsintheeurozone,shortingtheeuroversusthedollarwouldbeoneoptiontoconsider。

YoucouldlookatbuyingUSstockstoo。

Butthebroaderstockmarketlooksovervalued(by40%orso,reckonsAndrewSmithers,whohasadecenttrackrecordonthesethings)。

AneasierwayforBritishinvestorstogetexposuretoastrongerdollarissimplytobuystocksthatwillprofitfromit。

Bigpharmaisamongthemostobviouscandidates–stockssuchasAstraZeneca(LSE:AZN)andGlaxoSmithKline(LSE:GSK)。

Thenicethingaboutthesecompaniesisthattheyrealsodefensiveplayswithdecentdividendyields,sowiderfearsovertheeconomyshouldhavelessimpactonthem。

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