There was a slight surprise in the Bank of England minutes, as we saw the voting come in at 7 to 2 for the rate to be left unchanged. The surprise was more in the fact that one member had voted for an increase. Personally I think this would be extremely damaging for the UK economy as I have written in last months newsletter.
We have seen another stock finally getting stopped out as Gold and oil falls back. This leaves just three stocks in the fund at present with others looking slightly vulnerable.
Inflation came in ahead of expectation for both the UK and US showing the effects of high oil and food prices are really hitting the economies hard. US retail sales came in below expectation which would suggest that the previous high figures were solely related to the tax refunds. In the UK British Retail Consortium’s figure on retail sales suggested that we too saw a blip last month, with indications that this weeks official figure will come in lower.
July has been a pretty poor month for a bullish only fund. We could have course moved completely to cash with the market moving down as it was, but you never know when it is going to turn, plus we had some stocks that may have seen gains if it did fall.
There must have been a sigh of relief a few minutes ago when the UK Producer Price Index was released. This shows us inflation at the factory gate, both input (cost of raw materials) and output (increase in prices passed on by factories), came in lower than expected.
If it was not already clear, the slowdown in the UK housing market and associated industries was highlighted by the poor figures during last week. What was also shown was that individual borrowing has taken a dive, not good for the retail sector, or banks.
I thought I better just update the virtual fund, to adjust a couple of stops and bring it into line for the end of the month. At the close of June we ended 8% up as apposed to the S&P being down 8%.
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