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Walker Crips' Market Commentary

Can multiple financial rescues and a government budget keep a hibernating bear at bay?

Season 1, Ep. 72

As European and US indices turned lower last week, investors were left pondering: can multiple financial rescues and a government budget keep a hibernating bear at bay?


Last autumn, UK pension funds that use liability driven investing as a core investment strategy were the first to experience a mismatch in assets and liabilities, necessitating a liquidity backstop. The Bank of England had to step in with a short-term quantitative easing program to prevent a crash in the gilt market and stabilise the UK pension sector.


Fast forward from last year to the present day, and three US banks have failed, demonstrating that the banking sector is not immune to the harsh realities of quantitative tightening. The troubles these banks faced were not triggered by a disastrous mini budget but rather a fall in the value of crypto currency assets. Nonetheless, a mismatch in assets and liabilities has resulted once more albeit in a different sector. Each bank has had its own White Knight come along to the rescue in the form of a bid from a competitor or a ‘bailout’. Although the US Federal Reserve (“Fed”) has been careful not to use that word, all the while emphasising support is going directly to depositors - not to the banks...


Stocks featured:

Close Brothers, Credit Suisse, Direct Line, Prudential and UBS



To find out more about the investment management services offered by Walker Crips, please visit our website:

https://www.walkercrips.co.uk/


This podcast is intended to be Walker Crips Investment Management’s own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this podcast constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange.

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