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

January has marked one of the most volatile starts to the year given macro, political, and geopolitical uncertainty.  The VIX index reached 31.2 on January 25th, up 81.0% year-to-date and currently at a one-year high. As a result, most global equity indices have had the worst start to the year since 2008 and are approaching a ‘correction’ which is defined as a 10% drop from the most recent high. Using Refinitiv Datastream, Exhibit 1 looks at the year-to-date performance for the Russell 1000 which is currently down 9.1%.  The chart is a point-in-time comparison, meaning for each blue bar in

The Brexit transition period will end on December 31, 2020.  This deadline may have taken a backseat throughout most of the year due to COVID-19.  The duopoly of COVID-19 and fears of a no-deal Brexit has caused the FTSE 350 index to fall 14.3% year-to-date, making it one of the worst performers globally. However, the outlook for 2021 will certainly be somewhat improved irrespective of a Brexit deal as Britain has begun inoculating its population with a COVID-19 vaccine.  Britain was the first country to approve a COVID-19 vaccine and has ordered 40 million doses from Pfizer. In the United