Prospects of a warm spring

Another relatively quiet week meant a generally benign environment for risk assets. In our last Weekly, we discussed how low-volatility markets tend to rise, which prompted some questions from readers, so we’ll explain our thoughts later in this article.

Focusing on the UK economy, Friday’s data told us that while March was cold, the spring could be getting economically warmer. The morning’s UK retail sales data for March marked another reduction in volumes, partly due to the cold weather, according to the Office for National Statistics (ONS).

Open season on corporate earnings

Spring brings new beginnings, and corporate earnings reports. Companies have only just started reporting on their performance for the first three months of the year, but it looks like many of them could do with some new beginnings themselves. Just 17% of S&P 500 companies have posted quarterly results so far, and while results are mixed, they are generally better than consensus. For 86 companies, earnings are down 1% on the year, generating a surprise of 5%. Analyst expectations as of the end of March were even lower, predicting a 6.7% decline.

Are money market funds a threat to US banks?

Where is the best place to keep your cash? If you want regular access – and to be sure it’s worth at least the same as yesterday’s value – you won’t hold it as a long-term investment. Most people choose a bank account, where returns are generally lower than we would expect for investing in riskier assets, but that is just the price to pay for security and ease of access.


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