Fed Chairman Jerome Powell has alluded to a ‘hot’ labour market in the U.S., as the current number of job openings far exceeds the total number of unemployed – 4.5 million to be exact.  In other words, a tight labour market occurs when job openings (demand) > total unemployed (supply). Moving across the Atlantic, the U.K. finds itself in the same position for the first time ever.  The latest data from the Office of National Statistics shows total job openings at 1,295k, an all-time high.  Conversely, the number of individuals who are unemployed dropped to an all-time low of 1,257k.

U.K. large-cap equities continue to be resilient in the face of multiple headwinds, as the FTSE 100 is the third strongest performer year-to-date.  The index is up 4.7%, only behind to the Brazil Bovespa Index (+9.1%) and OMX Oslo All-Share Index (+10.5%). We note possible reasons for relative outperformance in a prior note which include index composition (higher tilt towards value), attractive valuations and higher dividend yields (A Case for U.K. Equities: Valuation and Yields Look Attractive, March 31, 2022).  However, we note that small-cap companies have underperformed as the FTSE 250 has declined 9.2% year-to-date in the face of

U.K. equities have generally underperformed its global peers consistently over the last decade.  The FTSE All Share has experienced a compound annualized growth rate (CAGR) of 4.7% and 7.3% over the last 5 and 10 years respectively.  In comparison, the Russell 1000 CAGR over this same period is 16.5% and 14.9%, while the Datastream World Market CAGR is 11.1% and 9.9% respectively. The start of 2022 has been one of the most volatile on record which we highlight in a prior note (Data Insight: A Turbulent Start to the Year for Global Equities, January 27, 2022).  To this point, the

With a bull market over the last decade, global equities have provided strong returns for investors in most regions.  Exhibit 1 above highlights U.S. equities, as represented by the S&P 500, led global markets with a 13.6% annualized return over the last ten years.  U.K. multinationals also performed well, with the FTSE 100 achieving a 7.4% annualized return. Interestingly, the performance of U.K. domestic equities, as represented by the FTSE 250, significantly outperformed the FTSE 100 over the last decade.  The FTSE 250 achieved a 12.0% annualized return, making it one of the leading indices globally.  The FTSE 250 also

In another indication that brick-and-mortar retailers are suffering, British retail icon Marks & Spencer will be dropped from the FTSE 100 stock index on Sept. 20.  FTSE Russell, in its quarterly review, announced that M&S, Direct Line Insurance Group and Micro Focus International will leave the index.  For M&S, this will mark the first time it has exited the FTSE 100 since being a founding member of the flagship index which was created in 1984. A fun fact: Using data going back to 1994, of the original 101 constituents in the index, 61 are no longer public actively traded securities