Switzerland may be at risk of entering deflationary territory in 2025 due to the strengthening of the Swiss franc, which is challenging policymakers’ control over price growth.
The Swiss National Bank has lowered interest rates three times this year as of September, attributing the country’s declining inflation rate to the robustness of the safe-haven currency, as well as to falling oil and electricity prices.
Analysts increasingly believe that the Swiss National Bank may need to engage in foreign currency intervention to avert a deflationary scenario.
Furthermore, the central bank has adjusted its forecasts downward, setting the average annual inflation rate for 2024 at 1.2%, down from 1.3%, and anticipating a price growth of 0.6% in 2025, a decrease from the previously forecasted 1.1%.
Nvidia is set to replace its rival chipmaker Intel in the Dow Jones Industrial Average, signifying a significant change in the blue-chip index that highlights the surge in artificial intelligence and a substantial shift within the semiconductor industry.
Intel’s shares fell by 1% in extended trading on Friday 1st November 2024, while Nvidia’s shares increased by 1%. Intel has now lost over half its value.
The update will take place on 8th November 2024. Also, Sherwin Williams will replace Dow Inc. in the index, the S&P and Dow Jones said in a statement.
Nvidia‘s shares have surged over 170% in 2024, following a roughly 240% increase last year, as investors flock to the AI chipmaker. Nvidia’s market capitalisation has expanded to $3.3 trillion, ranking it second only to Apple among publicly traded companies.
Nvidia one-year share price chart
Nvidia one-year share price chart
Major companies such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s graphics processing units (GPUs), like the H100, in large quantities to create computer clusters for AI projects. Nvidia’s revenue has more than doubled for five consecutive quarters, with at least a threefold increase in three of those quarters. The company has indicated that the demand for its forthcoming AI GPU, Blackwell, is ‘insane’.
With Nvidia‘s inclusion, four of the six tech companies valued at over a trillion dollars are now part of the index, leaving Alphabet and Meta as the two not listed in the Dow.
China’s factory activity jumped back into expansion among smaller manufacturers in October 2024, according to a private survey report released on Friday 1st November 2024.
The index stood at 49.3 in September 2024, 50.4 in August, and 49.8 in July. A PMI figure above 50 signifies an expansion in activity, whereas one below 50 suggests a contraction.
Following the release of the official PMI data on Thursday 31st October 2024, which showed the first expansion in the country’s manufacturing activity since April 2024, the Caixin measure, which typically reflects the performance of exporters and private sector firms, contrasts with the official PMI that includes larger and state-owned enterprises.
Elon Musk, the billionaire entrepreneur and CEO of Tesla and SpaceX, has recently made headlines in the U.S. with his stark predictions about the potential economic fallout if Donald Trump wins the upcoming presidential election.
This is unusual, as you are more likely to hear these proposals in a crisis, when desperate times demand desperate measures, but not leading up to a presential election and especially not from an opposition vying to take control of the U.S. presidency.
Musk’s comments have sparked widespread debate and concern, as he foresees significant economic turmoil and a stock market crash in the event of a Trump victory.
Musk’s predictions are deep-rooted in his belief that Trump’s proposed economic policies, including drastic cuts to federal spending and mass deportations, will lead to severe short-term economic disruptions.
Musk emphasised the need to reduce government spending to live within the country’s means, even if it involves temporary hardship.
He reportedly argued that such measures are necessary for long-term prosperity but acknowledged that they would likely cause an initial severe overreaction in the economy
Comments Elon Musk made
Billionaire Musk, Trump’s would-be government budget-cutting and ‘efficiency’ adviser, also says there will be “no special cases” and “no exceptions” when he starts slashing federal spending after Trump takes office.
With just a week until the presidential election, Donald Trump’s ally and influential economic adviser Elon Musk is warning people to expect economic chaos, a crashing stock market and financial “hardship” – albeit only “temporary” – if Trump wins.
“We have to reduce spending to live within our means,” Musk said. “That necessarily involves some temporary hardship, but it will ensure long-term prosperity.”
Describing government spending as “a room full of targets,” Musk said: “Like, you can’t miss. Fire in any direction and you’re going to hit a target.”
He reportedly said, “I think once the election takes place we’ll immediately begin looking at where to take the most immediate action.”
And he reportedly added, “obviously a lot of people who are taking advantage of the government are going to be upset about that. I’ll probably need a lot of security.”
“Everyone,” he reportedly said, will be taking a “haircut.”
The Tesla CEO went further and agreed with a supporter who predicted “an initial severe overreaction in the economy” and that “Markets will tumble.”
“Sounds about right,” Musk replied.
Trump has already reportedly said he wants Musk to head up a commission of government efficiency. Trump says the billionaire tech entrepreneur would be his “Secretary of Budget-Cutting,” implying a possible Cabinet position.
Musk himself has described his new role as running a “Department of Government Efficiency,” though he admits the title is an inside joke – the acronym spells DOGE, the name of a cryptocurrency.
Musk speech highlights
One of the key points Musk highlighted is the potential impact of Trump’s policies on the stock market. He agreed with a social media post suggesting that the combination of mass deportations and significant government spending cuts would lead to a sharp decline in market values.
Musk’s agreement with this assessment has raised alarms among investors and economists, who fear that such a scenario could trigger a financial crisis.
Musk’s concerns are not without precedent. The stock market is highly sensitive to political and economic uncertainties, and drastic policy changes can lead to volatility and investor panic.
The prospect of mass deportations, in particular, could disrupt labour markets and consumer spending, further exacerbating economic instability. Additionally, significant cuts to federal spending could lead to job losses and reduced public services, compounding the economic challenges.
Unusual comments leading up to an election
Musk reportedly told supporters that the measures were needed because of the crisis of the skyrocketing federal debt.
This is not the usual picture when a politician and his campaign promise austerity, hardship, deep budget cuts, a likely economic “overreaction” and a slump in the stock market.
You usually hear these things proposed in a crisis, when desperate times supposedly demand desperate measures.
Are desperate times coming, maybe they are already here?
Optimism
Despite the grim outlook, Musk remains optimistic about the long-term benefits of these policies. He believes that once the initial shock subsides, the economy will recover and emerge stronger and more sustainable.
However, this perspective is not universally shared. Many economists argue that the risks associated with such drastic measures outweigh the potential benefits, and that a more balanced approach is needed to address the country’s economic challenges.
Musk’s predictions have also drawn criticism from those who view them as politically motivated. As a prominent supporter of Trump, Musk’s comments have been interpreted by some as an attempt to rally support for the former president’s economic agenda. Critics argue that Musk’s focus on austerity measures and government efficiency overlooks the broader social and economic implications of such policies.
Conclusion
Elon Musk’s predictions of economic hardship and a stock market crash if Trump wins the election have sparked significant debate and concern.
While Musk believes that these measures are necessary for long-term prosperity, the potential short-term disruptions and risks cannot be ignored. As the election approaches, investors and policymakers will be closely watching the developments and preparing for the potential economic fallout.
Whether Musk’s predictions come to pass remains to be seen, but his comments have undoubtedly added to the uncertainty and complexity of the current economic landscape and the never-ending ‘commentary surrounding the U.S. election.
As the autumn chill of November sets in, the market seems to defy the temperature drop with a notable heated uptick in activity.
This phenomenon, often referred to as the ‘November Effect’, is a period where investors start to position themselves for end-of-year strategies, leading to increased market volatility and opportunity.
Historically
Historically, November has been a month where markets tend to show positive returns. Several factors contribute to this trend. Firstly, the anticipation of the holiday season boosts consumer spending, leading to higher revenues for retail companies. This optimism often spills over into the stock market, driving up share prices.
Secondly, institutional investors begin to adjust their portfolios to lock in gains for the year, a process known as ‘window dressing’. This activity can lead to increased buying, particularly in stocks that have performed well throughout the year, further driving market momentum.
Additionally, the release of third-quarter earnings reports in October sets the stage for November. Companies that have posted strong earnings results often see continued investor interest, propelling their stocks higher. Conversely, companies with weaker results might face selloffs, adding to market dynamism.
Tech resilience
Tech stocks, in particular, have shown resilience and growth potential, even amidst economic uncertainties. With advancements in AI, cloud computing, and cybersecurity, tech continues to be a focal point for investors. November often sees a renewed interest in these sectors, with investors looking to capitalise on year-end growth opportunities.
However, it’s essential to approach this period with a balanced perspective. While the ‘November Effect’ can present lucrative opportunities, it’s also a time of heightened market volatility. Investors should stay informed, diversify their portfolios, and consider both the potential rewards and risks.
As the weather gets colder, the markets heat up, creating a dynamic environment ripe with possibilities for those who navigate it wisely. The key lies in staying informed and alert, ready to adapt to the ever-changing market landscape.
Take informed financial advice from a professional qualified financial adviser.
Apple has returned to the top five smartphone vendors in China’s market during the third quarter, lifted by the release of the iPhone 16, according to data.
Apple’s shipment growth remained steady year-on-year in the Q2, securing the company a second-place rank by market share in Q3.
Following Apple, Huawei held the third position with a 15.3% market share, as per reported data. Despite this, Huawei’s smartphone shipments in China saw a significant increase of 42% year-on-year.
As of September 2024, the UK’s national debt stands at £2,685.6 billion, which is approximately 100% of the country’s GDP. This is the highest level of public sector debt since 1961.
UK debt and its borrowing
As of 2024, the United Kingdom’s national debt has reached a staggering £2,685.6 billion, an amount equivalent to the nation’s GDP. This surge in debt, driven by persistent borrowing, has sparked significant economic and political debate.
Historical context
The UK’s debt levels have fluctuated over time, influenced by wars, recessions, and policy decisions. However, the current debt level marks a significant peak not seen since the early 1960s.
The Financial Crisis of 2008 saw the debt-to-GDP ratio rise sharply as the government borrowed heavily to stabilize the banking sector and stimulate the economy. More recently, the COVID-19 pandemic necessitated extensive government borrowing to fund health services, furlough schemes, and business support measures, exacerbating the debt situation.
Government borrowing
Government borrowing, or public sector net borrowing, is the amount by which government expenditures exceed its revenues. This borrowing is essential for funding various public services, infrastructure projects, and welfare programs.
While borrowing can be a tool for stimulating economic growth, especially during downturns, it also raises concerns about fiscal sustainability and the burden on future generations.
Economic Implications
High levels of national debt can have profound economic implications. On the one hand, government spending can stimulate economic activity, create jobs, and drive growth. However, excessive borrowing can lead to increased interest payments, diverting resources from essential services like healthcare and education.
Additionally, high debt levels can reduce investor confidence, potentially leading to higher borrowing costs for the government and businesses.
Debt management strategies
The UK government employs various strategies to manage its debt. These include issuing government bonds to investors, which provide a relatively low-cost means of borrowing. The Bank of England also plays a crucial role, particularly through its monetary policies, such as setting interest rates and implementing quantitative easing programs.
The government’s fiscal policy, which includes tax and spending measures, is another key component in managing the debt.
The future
Looking ahead, the UK’s debt trajectory will depend on several factors, including economic growth rates, government policy decisions, and global economic conditions.
While reducing the debt burden is a priority, balancing fiscal responsibility with the need for economic stimulus remains a delicate act. Policymakers must navigate this complex landscape to ensure long-term economic stability and prosperity for future generations.
UK debt in direct relation to UK GDP from 1980 – 2024
Since the 1950s, UK debt has gone through several cycles. Post-World War II, debt was high due to reconstruction efforts.
The 1980s saw a decline in debt, thanks to privatisation and reduced public spending. However, the 2008 financial crisis caused a sharp increase, followed by more borrowing during the COVID-19 pandemic, reaching 100% of GDP in 2024.
UK public sector borrowing
Public sector debt as a proportion of GDP
How does the UK government borrow money?
The government raises funds by issuing financial instruments known as bonds. A bond represents a commitment to repay borrowed money in the future, typically with periodic interest payments until maturity.
UK government bonds, or ‘gilts’ are generally regarded as secure investments, carrying minimal risk of non-repayment. Institutions both within the UK and internationally, including pension funds, investment funds, banks, and insurance companies, are the primary purchasers of gilts.
Additionally, the Bank of England has purchased substantial amounts of government bonds in the past as an economic stimulus measure through a mechanism known as ‘quantitative easing’.
How much is the UK government borrowing?
The government’s borrowing fluctuates monthly. For example, in January, when tax returns are filed, there’s typically a surge in revenue as many pay a significant portion of their taxes at once. Therefore, it’s more informative to consider annual or year-to-date figures.
In the financial year ending March 2024, the government borrowed £121.9 billion. The latest data for September 2024 indicates borrowing at £16.6 billion, up by £2.1 billion compared to September 2023.
The national debt refers to the total amount owed by the government, which stands at approximately £2.8 trillion. This figure is comparable to the gross domestic product (GDP) of the UK, which is the total value of goods and services produced in the country annually.
The current debt level has more than doubled since the period from the 1980s up to the 2008 financial crisis. Factors such as the financial crash and the Covid pandemic have escalated the UK’s debt from its historical lows to where it is now.
However, when considering the economy’s size, the UK’s debt is relatively low compared to much of the previous century and to that of other major economies.
How much money does the UK government pay in interest?
As the national debt increases, so does the interest that the government must pay. This additional cost was manageable when interest rates were low throughout the 2010s, but it became more burdensome after the Bank of England increased interest rates.
The government’s interest payments on the national debt are variable and reached a 20-year peak in early October 2023. Approximately a quarter of the UK’s debt is tied to inflation, meaning that payments increase with rising inflation.
This situation led to a significant rise in the cost of debt service, though these payments have begun to decrease. If the government allocates more funds to debt repayment, it could result in reduced spending on public services, which were the original reason for the borrowing.
In conclusion, while the UK’s debt and borrowing levels present challenges, strategic management and informed policy decisions will be crucial in navigating the path forward.
The UK debt total vs GDP is now as of 2024 all but 100%
The International Monetary Fund (IMF) has issued a warning about the potential decline of China’s property market while reducing its growth forecast for the world’s second-largest economy.
In a report published Tuesday, The IMF has reduced its growth forecast for China this year to 4.8%, which is 0.2 percentage points below its July projection. For 2025, the IMF reportedly anticipates growth to be at 4.5%.
The IMF has pointed out that the unexpected contraction of China’s property sector is among several factors posing risks to the global economic outlook.
‘The real estate market could face worsening conditions, potentially leading to further price declines amid a drop in sales and investment’, the report indicated.
The report referenced past property crises in countries such as Japan in the 1990s and the U.S. in 2008, suggesting that if China’s situation is not managed, property prices may fall even more.
According to the IMF‘s World Economic Outlook, this could undermine consumer confidence, leading to lower household spending and domestic demand.
MD Kristalina Georgieva praised the efforts of major central banks in controlling inflation but pointed out that such successes were not widespread.
Additionally, Georgieva cautioned that international trade is no longer the growth catalyst it used to be, emphasizing the increase in restrictive policies across numerous economies.
“It is successful major economies that have done really well … and there are pockets in the world where inflation is still a problem,” she reportedly said.
“The impact of higher prices remains, and it is making many people in many countries feel worse off and angry.”
In October 2024, the asking prices for UK homes increased only slightly as the market saw an influx of properties, a survey reportedly revealed on Monday 21st October 2024
This report also indicated that some buyers were holding off on purchases, awaiting details on tax revisions from the new government’s forthcoming budget.
The increase in asking prices was a just 0.3% for October 2024, significantly lower than the typical 1.3% monthly rise for this time of year, according to property website Rightmove.
There was a 12% rise in the number of homes listed for sale compared to the same period last year, marking the highest number per estate agent since 2014.
Despite the increase in supply, the property market’s overall activity remained robust, with a continued uptick in buyer demand. Year-on-year, prices saw a 1.0% increase.
Gold continues on its path to new highs touching $2740 on 21st October 2024
In 2024, gold experienced a surge of over 35%, reaching new record highs.
This increase was propelled by the anticipation of additional Federal Reserve rate reductions following a half-percentage-point cut in September 2024, coupled with persistent geopolitical uncertainties stretching from Europe to the Middle East.
Delegates at the London Bullion Market Association‘s annual meeting earlier this week predicted that gold prices could reach $2,941 per troy ounce in the next 12 months.
As investors continue to seek out a safe haven for their money, the price of gold will remain elevated.
Gold price one year chart – price snapshot as of: 21st October 2024 (08:52 BST)
Gold price one year chart – price snapshot as of: 21st October 2024 (08:52 BST)
Gold, which yields no interest in its own right, tends to gain in value when interest rates are cut and when geopolitical tensions heat up.
Amazon Web Services (AWS) has announced the signing of an agreement with Dominion Energy, the utility company of Virginia U.S., to explore the development of a small modular nuclear reactor near Dominion’s existing North Anna nuclear power station.
As Amazon’s cloud computing subsidiary, AWS has an ever-growing demand for clean energy, particularly as it expands into generative AI. This agreement aligns with Amazon’s journey towards net-zero carbon emissions.
Amazon joins other major tech companies like Google and Microsoft in turning to nuclear power to meet the increasing energy needs of data centres.
AI systems, particularly generative AI, necessitate substantial computational power, leading to significant energy use. Conventional energy sources might not meet these growing demands.
Environmental Commitments
Numerous tech firms have pledged to lower their carbon emissions. Nuclear power, a low-emission energy source, supports these environmental commitments.
Dependability
Nuclear energy offers a consistent and uninterrupted power supply, essential for data centres that operate around the clock.
Technological Advancements
Progress in nuclear technologies, such as small modular reactors (SMRs), has enhanced the feasibility and appeal of nuclear power for extensive use.
For example, Google has entered into an agreement with Kairos Power for electricity from small modular reactors to bolster its AI operations. In a similar vein, Microsoft has collaborated with Constellation to refurbish an inactive reactor at the Three Mile Island nuclear facility.
These collaborations mark a notable transition in the energy strategies of the tech sector, as they pursue dependable, eco-friendly, and robust power solutions to support their AI initiatives.
The UK Labour government aimed to attract foreign investment on Monday 14th October by hosting its first International Investment Summit in London
Prime Minister Keir Starmer, Chancellor Rachel Reeves, and Business Minister Jonathan Reynolds headed the one-day event at London’s Guildhall, with an attendance of approximately 200 executives from both the UK and abroad.
Notable attendees were former Google Chairman Eric Schmidt, Goldman Sachs CEO David Solomon, BlackRock CEO Larry Fink, and GSK CEO Emma Walmsley. Poppy Gustafsson, the newly appointed Investment Minister and co-founder of the British cybersecurity company Darktrace, were also present to advocate for the UK as a favourable business environment.
The UK government unveiled a relaxation of regulations and announced investment deals worth billions of pounds in sectors such as artificial intelligence, life sciences, and infrastructure, while Starmer proclaimed it’s ‘a great moment to back Britain.’
‘We will rip out the bureaucracy that blocks investment and we will make sure that every regulator in this country take growth as seriously as this room does,‘ Starmer reportedly told delegates.
UK Prime Minister Keir Starmer on Monday 14th October 2024 vowed to slash regulatory red tape to boost investment in the country.
“We’ve got to look at regulation across the piece, and where it is needlessly holding back investment … mark my words, we will get rid of it,” he reportedly told delegates at the UK’s International Investment Summit.
The government on Sunday 13th October 2024 announced the launch of a new industrial strategy, designed to focus on eight “growth-driving sectors.”
The prime minister reportedly restated that growth was the “No. 1 test of this government,” and reiterated plans for the U.K. to become the fastest-growing G7 economy.“
Starmer also outlined stability, strategy, regulation and improving Britain’s global standing as “four crucial areas” in his pitch for Britain.
“Private sector investment is the way we rebuild our country and pay our way in the world,” Starmer said
In a panel discussion with Starmer, Google’s ex-CEO Eric Schmidt expressed his surprise upon learning that the Labour party had shifted to ‘strongly’ support growth.
Schmidt is eager to see the execution of this approach and encouraged the government to increase investment in artificial intelligence to fulfill broader growth objectives.
Tesla’s stock declined on Friday 11th October 2024 following the electric vehicle maker’s highly anticipated robotaxi event, which left investors unimpressed
£60 billion was wiped off Tesla market cap
CEO Elon Musk showcased the Cybercab concept vehicle, announcing that it would be available for purchase at a price below $30,000.
Analysts reportedly commented that the event did not emphasise any immediate opportunities for Tesla, focusing instead on Musk’s long-term vision for fully autonomous driving.
At the ‘We, Robot’ event on Thursday 10th October 2024, CEO Elon Musk presented the Cybercab, a sleek, silver two-seater without steering wheels or pedals, underscoring his company’s goal to develop a fleet of self-driving vehicles and robots.
Musk expressed his hope for Tesla to start producing the Cybercab by 2027, though he did not specify the manufacturing locations. He reiterated that the Tesla Cybercab would be sold for less than $30,000.
Furthermore, he anticipated that Tesla’s Model 3 and Model Y electric vehicles would feature ‘unsupervised FSD’ operational in Texas and California by next year. FSD, standing for Full Self-Driving, is Tesla’s advanced driver assistance system, currently available in a supervised format.
Investors and analysts were underwhelmed by the event. Tesla shares fell.
Tesla one year chart as of 11th October 2024
Tesla one year chart as of 11th October 2024
Elon Musk’s wealth
Elon Musk is projected to become the world’s first trillionaire by 2027, as per a recent report by Informa Connect Academy. Among global billionaires, Musk is nearest to reaching the 13-figure threshold, with his wealth continuing to increase.
Ripple has announced the launch of a range of features designed to assist banks and fintech’s with the storage of digital tokens, marking a significant expansion into the realm of crypto custody.
Crypto custody services, which support clients in managing their crypto assets, represent a new venture for Ripple, now unified under the brand Ripple Custody.
The company is best known for its XRPcryptocurrency and RippleNet, a distributed ledger platform facilitating fast interbank payments.
Electric car sales to private buyers are 6.3% lower so far in 2024 despite £2 billion of manufacturers discounts
Electric car sales in the UK are facing challenges despite the growth in the number of electric vehicles (EVs) on the roads. The Society of Motor Manufacturers and Traders (SMMT) has indicated that the proportion of EV sales has not surpassed 18%, with the market mainly propelled by fleet operators, not private consumers.
It has been suggested that the industry will struggle to meet the government target of 22% of new car sale in 2024 being ‘zero-emission vehicles’.
Contributing factors to this slowdown include the high costs, a limited public charging infrastructure, and range anxiety.
Nonetheless, September 2024 saw a record number of new electric car registrations, exceeding 56,000. Yet, the long-term viability of these figures is uncertain, as they were bolstered by substantial discounts.
And yet the electric car still remains an equally expensive option by direct comparison.
On Tuesday, October 8, 2024, the U.S. Department of Justice (DOJ) indicated that it might consider the break-up of Google as an antitrust action.
The DOJ is considering both behavioural and structural options to prevent Google from using products like Chrome, Play, and Android to favour Google Search.
The decision regarding the remedies is still outstanding, and it is anticipated that Google will appeal, potentially extending the process for years.
The FTSE 100 index comprises the 100 largest companies by market capitalisation. These companies are typically well-established and financially stable, making them reliable dividend payers.
The average dividend yield for the FTSE 100 is around 3.97%.
Here are ten dividend stocks in the FTSE 100
British American Tobacco (BATS) – Known for its high dividend yield, often exceeding 7%. Not an ethical choice.
Rio Tinto (RIO) – A mining giant with a strong dividend history.
Imperial Brands (IMB) – Another tobacco company with a robust dividend yield. Not an ethical choice.
Legal & General Group (LGEN) – A financial services company with a consistent dividend payout.
GlaxoSmithKline (GSK) – A pharmaceutical company with a reliable dividend.
Vodafone Group (VOD) – A telecommunications company with a solid dividend yield.
HSBC Holdings (HSBA) – One of the largest banking institutions with a strong dividend.
BP (BP) – An oil and gas company known for its high dividend yield.
Unilever (ULVR) – A consumer goods company with a consistent dividend payout.
National Grid (NG) – An energy company with a reliable dividend history.
FTSE 250 Dividend Stocks
The FTSE 250 index includes the next 250 largest companies after the FTSE 100. These mid-cap companies often offer higher growth potential and, in some cases, higher dividend yields. The average dividend yield for the FTSE 250 is around 3.30%.
Here are ten dividend stocks in the FTSE 250
Harbour Energy (HBR) – An oil and gas company with a yield of 7.24%.
Tritax Big Box REIT (BBOX) – A real estate investment trust with a yield of 4.76%.
Investec (INVP) – A financial services company with a yield of 6.21%.
Greencoat UK Wind (UKW) – A renewable energy company with a yield of 7.48%.
IG Group Holdings (IGG) – A financial services company with a yield of 5.02%.
ITV (ITV) – A media company with a yield of 6.43%.
Abrdn (ABDN) – An investment company with a yield of 9.45%.
HICL Infrastructure (HICL) – An infrastructure investment company with a yield of 6.37%.
Direct Line Insurance Group (DLG) – An insurance company with a yield of 3.30%.
Drax Group (DRX) – An energy company with a yield of 3.81%.
Passive dividend income
Dividend stocks in the FTSE 100 and FTSE 250 – a basic overview
Buying dividend stocks can offer several benefits to investors – key advantages are…
Regular Income
Dividend stocks provide a steady stream of income through regular dividend payments. This can be particularly appealing for retirees or those seeking passive income.
Potential for Capital Appreciation
In addition to dividends, these stocks can also appreciate in value over time, offering the potential for capital gains. This dual benefit can enhance overall returns.
Reinvestment Opportunities
Dividends can be reinvested to purchase more shares, a strategy known as dividend reinvestment. This can compound returns over time, significantly boosting the value of your investment.
Lower Volatility
Dividend-paying stocks tend to be less volatile than non-dividend-paying stocks. Companies that pay dividends are often more established and financially stable, which can provide a cushion during market downturns.
Tax Advantages
In many jurisdictions, dividends are taxed at a lower rate than regular income. This can make dividend stocks a tax-efficient investment option.
Inflation Hedge
Dividend growth can help protect against inflation. Companies that consistently increase their dividends can provide a rising income stream that keeps pace with or exceeds inflation.
Signal of Financial Health
A company that pays regular dividends is often seen as financially healthy and confident in its future earnings. This can be a positive signal to investors about the company’s stability and profitability.
Diversification
Including dividend stocks in your portfolio can add diversification. They often belong to various sectors, providing exposure to different parts of the economy.
Compounding Effect
The combination of regular dividends and potential capital gains can create a powerful compounding effect over time, significantly enhancing long-term returns.
Psychological Benefits
Receiving regular dividends can provide psychological comfort, especially during market volatility. Knowing that you are earning income regardless of market conditions can help maintain a long-term investment perspective.
Investing in dividend stocks can be a strategic way to build wealth and generate income. However, it’s important to research and choose companies with a strong track record of dividend payments and financial stability.
Conclusion
Investing in dividend stocks from the FTSE 100 and FTSE 250 can be a strategic way to generate passive income while also benefiting from potential capital gains. These indices offer a diverse range of companies, each with its own strengths and dividend yields, making them attractive options for income-focused investors.
These are NOT recommendations – just observations. Go do your research. Interest rates will/do change quickly – go check. Thanks.
Remember to ALWAYS do your own careful and considered research…
Federal Reserve Chair Jerome Powell recently stated that the latest half-percent reduction in interest rates should not be interpreted as a sign that future measures will be equally as aggressive.
The Fed suggests that subsequent adjustments will likely be more ‘modest’.
In his address, the central bank’s chief highlighted their goal to balance curbing inflation with maintaining a robust labour market, basing future decisions on data insights.
‘Moving forward, should the economy evolve as widely expected, our policy stance will progressively adjust towards neutrality. Yet, we are not bound to a fixed course,‘ he clarified during in his statement. ‘Risks are two-way, and our resolutions will be determined one meeting at a time.‘
The Federal Reserve believe, as noted in a recent update, that they are just millimetres away from that ‘elusive’ economic soft landing.
On Wednesday 9th October 2024, Chinese stocks experienced a sharp decline, with the Shanghai benchmark plummeting by 6.6%
Hong Kong’s index fell by 1.5%, in contrast to the mostly positive performance of other global markets.
Beijing’s recently detailed economic stimulus plans did not meet the high expectations set after the central bank and other agencies announced measures aimed at revitalising the struggling property sector and accelerating economic growth.
The Shanghai Composite Index fell 6.6% reversing a 4.6% gain from Tuesday 8th October 2024 when it re-opened following a weeklong national holiday.
The CSI 300 Index, which follows the top 300 stocks in the Shanghai and Shenzhen exchanges, relinquished 7.1%– ending a 10-day winning streak.
In Shenzhen’s smaller market, the benchmark tumbled by 8.7%.
The Hang Seng index in Hong Kong dropped 1.5% – and this coming after a steep decline of over 9% the previous day.
Creditors of the disgraced cryptocurrency exchange FTX are set to receive up to $16.5 billion (£12.6 billion) following a bankruptcy plan sanctioned in the U.S. on Monday
This settlement concludes a tumultuous period that began with the company’s bankruptcy in November 2022, which left millions of customers without access to their funds.
Last year, the exchange’s former chief, Sam Bankman-Fried, was found guilty of misappropriating customer funds before the collapse and was subsequently sentenced to 25 years in prison.
Under the terms of the agreement, former clients will be able to reclaim approximately 119% of the value held in their accounts at the time of the bankruptcy, as per FTX’s statement.
Creditors expect to receive their compensation within 60 days after the plan becomes operative, although the exact date remains to be determined.
On Friday 4th October 2024, the European Union voted to implement definitive tariffs on battery electric vehicles (BEVs) made in China
‘The European Commission’s proposal to levy definitive countervailing duties on imports of Chinese battery electric vehicles has garnered the requisite support from EU Member States to proceed with the imposition of tariffs,‘ stated the EU.
Initially, the EU announced in June its intention to impose higher tariffs on imports of Chinese electric vehicles, citing substantial unfair subsidies that threaten economic harm to European electric vehicle manufacturers.
The EU disclosed specific duties for companies based on their level of cooperation and the information provided during the bloc’s investigation into China’s EV production, which commenced last year. Provisional duties have been in effect since early July.
Following the receipt of ‘substantiated comments on the provisional measures‘ from stakeholders, the European Commission updated its tariff strategy in September 2024.
A spokesperson from China’s Ministry of Commerce indicated that Beijing maintains its stance that the EU’s investigation into China’s electric vehicle industry subsidies has led to predetermined outcomes – suggesting that the EU is fostering unfair competition.
Last month, the average UK house price nearly reached a record high, buoyed by decreasing mortgage rates that have lifted buyer confidence, Halifax reports.
Halifax, the UK’s largest mortgage lender, noted that the average house price climbed to £293,399 in September 2024, narrowly missing the record of £293,507 set in June 2022.
According to Halifax, house prices have been on an upward trend for three consecutive months as market conditions have improved.
Easier mortgage affordability, driven by robust wage increases and declining interest rates, has enhanced confidence among buyers, leading to a rise in the number of mortgages agreed upon over the past year.
Halifax has recorded a 4.7% increase in house prices compared to the previous year, marking the most rapid growth rate since November 2022.
According to the Bloomberg Billionaires Index, Meta CEO Mark Zuckerberg has overtaken Jeff Bezos as the world’s second-richest person
Zuckerberg’s wealth surged by $78 billion in 2024, a rise unmatched by any other member of the index’s 500 richest individuals, thanks to his 13% stake in Meta.
Throughout the year, Wall Street has applauded Meta as the company’s quarterly earnings have consistently exceeded analysts’ expectations.
On Thursday 3rd October 2024, Zuckerberg’s net worth hit $206.2 billion, as per the Bloomberg Billionaires Index, surpassing the $205.1 billion fortune of the ex-Amazon CEO and president. The co-founder of Facebook is now approximately $50 billion behind Tesla’s Elon Musk, according to the index.
Bloomberg Billionaires Index as of 3rd October 2024
Bloomberg Billionaires Index as of 3rd October 2024
Fact: Apparently Mark Zuckerberg says he plans to give away 99% of his Facebook shares.
Bitwise Asset Management, a prominent player in the cryptocurrency investment space, has recently made headlines with its filing for a spot XRP exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC).
This move marks a significant milestone as it is the first attempt to create an ETF specifically for XRP, the native token of the XRP Ledger.
The proposed Bitwise XRP ETF aims to provide investors with direct exposure to XRP through traditional brokerage accounts. This will make it easier for both institutional and retail investors to gain access to this digital asset. Bitwise’s decision to pursue an XRP ETF underscores the growing recognition of XRP’s potential and its established presence in the cryptocurrency market.
Bitwise is no stranger to the ETF landscape, having successfully launched Bitcoin and Ethereum ETFs in the past. The company’s experience and reputation in managing crypto assets lend credibility to this new venture. However, the approval process for the XRP ETF is expected to be rigorous, given the SEC’s cautious approach to cryptocurrency-related financial products.
The filing comes at a time when the cryptocurrency market is experiencing increased interest from mainstream investors. XRP, known for its fast transaction speeds and low fees, has been a popular choice for cross-border payments and remittances. If approved, the Bitwise XRP ETF could attract a new wave of investors looking to diversify their portfolios with digital assets.
While the SEC’s decision is still pending, the filing itself is a testament to the evolving landscape of cryptocurrency investments. There is a growing acceptance of digital assets in traditional financial markets. Investors and crypto enthusiasts alike will be watching closely as this development unfolds.
