Will Nvidia stock keep going up?

It more than doubled its sales. It unveiled a new line of microchips. It promised to keep rolling out new products for the next few years. In the end, Nvidia, the chip manufacturer, delivered the kind of blockbuster results that traders and investors had been waiting for. Yesterday’s ‘Nvidia Day’ (as the company’s quarterly results days are now known on Wall Street) turned out to be better than even the most bullish investor could have hoped for. There is just one snag. The company is now powering the bull market. If anything goes wrong with its turbo-charged expansion, it will bring equities down with it. It’s great for the moment

Daily life at the 18th-century Bank of England

The England cricket team was once greeted at an Ashes test by an Australian banner with the immortal words ‘WOTHAM IS A BANKER’, the simple genius of the line being that you knew Wotham was being insulted before you had worked out quite who Wotham was, or what exactly he was being accused of. But, as Anne Murphy reminds us, the word ‘banker’ was not always just a word of abuse; it could also denote personal probity, sobriety, a certain nitpicking stolidity of thought, above all a preoccupation with credit and public confidence. It was not automatically oxymoronic to think of ‘virtuous bankers’. Amid all the financial crises of the

Levelling up is failing

First the good news: the Office for National Statistics figures released today show that pay is rising at its fastest rate in two decades, with regular pay up by 4.2 per cent in the three months for February to April compared with a year earlier. Now the bad news: such is inflation that, in real terms, regular pay was actually down 2.2 per cent – lower than at any time in the past two decades except for a brief period in the autumn of 2011. So, yes, it isn’t just an illusion: we really are getting poorer. That is a big problem not just for households trying to make ends

Why does the City still use quotas?

It sometimes feels like every regulatory body in Britain today misuses its influence to advance progressive causes. A welcome exception is the Financial Conduct Authority, which last week decided to allow firms to choose whether they use sex or gender as the definition of ‘woman’ for reporting on their representation on corporate boards. It is clearly not the role of a financial services regulator to attempt to define ‘man’ and ‘woman’. Out of 540 responses to a consultation on the matter, all but one said they did not want trans women to be automatically included in the targets and data. As the group Sex Matters has pointed out, there is

The TV licence is a dead duck

‘Tell me we’re winning the media battle!’ I imagine Unilever boss Alan Jope barking at his team on Tuesday, following the revelation on Sunday of his rejected £50 billion bid for GlaxoSmithKline’s consumer healthcare arm. ‘Yes, sir,’ replies the flustered PR, ‘Very much so… except for top investor Richard Buxton of Jupiter telling the FT: “The idea of letting the goons at Unilever run [the GSK business] is laughable.” Then there’s an analyst in the Telegraph saying: “We can’t imagine many things that would unnerve us more about Unilever” than this deal going ahead. Oh, and our shares fell 7 per cent yesterday.’ Jope is now huddled with his advisers

It’s time to reform the Big Four accounting firms

It has been exactly 20 years since the Enron scandal upended the reputation of global accountancy firms, leading to the downfall of both the company – one of the largest in US history up to that point – and Arthur Andersen, one of the ‘Big Eight’ accounting firms. Enron’s collapse provoked an avalanche of regulation, ostensibly to reduce the chances of similar accounting fraud repeating itself. In the United States this effort was spearheaded by the 2002 Sarbanes–Oxley Act, while the European Union’s 2006 Auditing Directive followed scandals like the 2003 collapse of Italian dairy giant Parmalat. In reality, these supposedly stringent regulations were crafted under considerable influence from the

The Liberal Democrats have a dangerous vision for the City of London

Liberals have always set great store by laws and declarations. It was joked about Lord Loreburn, the liberal Lord Chancellor in the years before the First World War, that if told the Germans had landed he would immediately have taken steps to obtain an interim injunction from the Chancery Division requiring an immediate withdrawal. These days something similar seems to be happening as regards the Liberal Democrats’ approach to climate change. Last Thursday Ed Davey took aim at the City, which he has decided to add to the party’s growing list of climate change villains. In a curious interview with the Guardian he put forward a modest proposal to deal

The clever radical who led the City’s transformation

It’s a vivid example of unintended consequences that the swimming-pool builders of southern England should owe so much to Sir Nicholas Goodison, the former chairman of the London Stock Exchange who has died aged 87 and whose obituaries suggested little inclination to frivolity, poolside or otherwise. Head-and-shoulders the most cerebral of the Exchange’s leading members at the turn of the 1980s, he was also one of its most far-sighted and probably, as a noted connoisseur of 18th-century clocks, its most cultured. A traditionalist majority of his peers were content with the City’s clubbable old ways. But Goodison — a third-generation stockbroker who had originally thought of a career in teaching

The EU’s debt bondage expansion

In the global market for government debt, worth an estimated $92 trillion (£66 trillion), it amounts to little more than a drop in the ocean. The European Union this week issued the first €20 billion (£17 billion) of bonds to pay for its Coronavirus Rescue Fund. The money itself doesn’t amount to very much one way or another. And yet, the Commission’s President Ursula von der Leyen was surely right when she described it as a ‘truly historic day’. Why? Because, the Commission is already using it to seize control of fiscal policy, just as it used vaccine procurement to take control of health policy. Its enthusiasts have already hailed the

No, Amsterdam hasn’t overtaken the City

London is Europe’s major financial centre and one of the world’s two leading financial hubs. This is unlikely to change following Brexit. Its main competition is with New York, Singapore, Hong Kong and other centres like Shanghai that will emerge in the coming years. However, the headline of today’s main story in the Financial Times proclaimed, ‘Amsterdam ousts London as Europe’s top share trading hub’. The article correctly reported that more shares were traded last month on ‘Euronext, Amsterdam and the Dutch arms of CBOE Europe and Turquoise in January’ than ‘in London’. While the data in this story is naturally correct, it needs to be put within context in order to

The capitalist nihilism of WallStreetBets

When Croatian movie director Dario Jurican ran in the country’s presidential election in 2019, his campaign slogan, ‘corruption for everybody’, promised that normal people would also be able to profit from cronyism. The people reacted with enthusiasm although they knew it was a joke. A similar dynamic is present on the WallStreetBets subreddit, which subverts the financial system by over-identifying with it or, rather, by universalizing it and thereby revealing its in-built absurdity. The story is well-known already, but let’s briefly recap. Wallstreetbets is an online group in which millions of participants discuss stock and options trading. It is notable for its profane nature and promotion of aggressive trading strategies.

Rishi Sunak’s Singapore problem

For those trying to argue that the evils of colonialism still hang over former lands of the British Empire, the legacy of racism suppressing their ambitions and achievements, the Republic of Singapore presents something of a challenge.  Just how did this particular colony manage to become not only one of the wealthiest countries in the world, but one of the highest-fliers in the United Nations’ Human Development Index? Indeed, the Asian city state has once again this week been promoted as a model for its former colonial master to emulate.  It can’t just be the Guinness that has attracted investment to another former corner of British soil over the past couple

How will the markets respond to lockdown?

What a strange non-event was the stockmarket reaction to the announcement of the latest national lockdown. Retailers, leisure companies, travel firms – all was calm. Marks and Spencer was down half a per cent on the morning, while Next was up five per cent on the back of good online results before Christmas. EasyJet was down two percent but International Airlines Group (IAG) was up 0.4 per cent. Cruise operator Carnival was down 0.7 percent but travel group Tui was up two per cent. It was just like any other day, as if nothing had happened on the Covid front. But then maybe that is because nothing much had happened.

Where to search for property in 2021

Did anyone get their predictions for the 2020 property market right? I suspect not. We’d barely heard of Covid back in January last year and, if we had, we would have probably written off the housing market for half a decade. But look at property now. Prices are up 5 per cent on average and so too is the volume of sales: £62 billion of extra transactions according to Zoopla compared to 2019. And that’s despite the economic hit we’ve experienced over the last year. I’d suggest the upward trajectory will continue, albeit with a few wobbles. This market movement is being driven by macro factors, not local ones. Low

The looming Covid unemployment catastrophe

Just how widely is the economic pain from Covid-19 being felt? Still surprisingly little, according to the latest employment figures from the Office of National Statistics (ONS). The absence of an explosion in unemployment goes some way to explaining why the lockdowns and restrictions have been accepted so meekly by the population at large. That said, unemployment is beginning to rise significantly now. There are now 819,000 fewer payroll employees compared with the start of the crisis in February. The employment rate stands at 75.2 per cent, 0.9 per cent down on a year ago, and the unemployment rate is 4.9 per cent, up 1.2 per cent. Still, this is

The perils of shared ownership

Fancy buying half a flat, paying 100 per cent of the maintenance and the cost of putting right a developer’s shoddy work? Therein lies the great scandal at the heart of shared ownership, the government scheme which BBC Panorama exposed last week but which I others were writing about over a decade ago. Shared ownership has allowed developers to put fancy price tags on properties which they might otherwise struggle to sell The concept sits at the heart of government efforts to increase the rate of home-ownership. Look around at the prices of London flats, compare them with average London salaries and you wonder how anyone can get on the

The problem with investing in gold

The gold price, we keep being told, because investors are seeking a ‘safe haven’. The first part of that sentence is true – from £1100 per ounce at the beginning of this year, gold has surged to £1500 per ounce this week. But are those buying it really doing so because it is ‘safe’ investment? Come off it. It is easy to get on the wrong side of a stock market or property boom, but gold has proved are a far more insidious destroyer of wealth over the decades. Had you fallen for the lustre of gold in 1980, when it was selling for £280 an ounce it would have

Will Western economies be ‘turning Japanese’ after Covid-19?

Japan has announced a colossal stimulus package (£1.75 trillion) as it attempts to breathe life into its Covid-19 damaged economy. But with its finances already in a parlous state before the pandemic struck, economists and policy makers around the world are nervous about where this dramatic intervention in one of world’s most fiscally conservative nations could lead. One of the biggest problems Japan could face is its own currency. The Yen has traditionally been a safe haven in times of global uncertainty but not, it appears, right now. A fall of nearly 10 per cent against the dollar was recorded in March, as investors rushed to the world’s most powerful

Disrupting the world — from a small bedroom in Hounslow

On 6 May 2010 the eurozone crisis was tearing through the continent. Greece was bankrupt, and it looked as though Spain or Italy could be next. Markets were on edge, volatility was high — and then something very strange happened. The S&P 500, one of the US’s main stock indexes, began to crash. It went faster and further than it ever had before, losing 5 per cent of its value in four minutes. The shock spread to the Dow Jones, which hurtled downwards. Financial markets across the globe were going haywire. The oil price started to fall. Shares formerly valued at $50 were suddenly trading at 0.0001 cents while others

Beware online investment apps and ‘experts’

Remember day trading, the fad for retail investors trying to emulate the hotshots of Wall Street from their spare bedrooms, and losing much of their money in the process? It is back with a vengeance, this time driven by a range of ‘disruptor’ apps which seek to lure risk-hungry traders by eliminating the cost of buying and selling assets. This time, the bets are even bigger. Controversially, some apps offer traders the chance to ‘leverage’ their bets: that is to borrow money to increase their gains. Or losses. The story of canny investors looking to outsmart the system — and the charismatic ‘experts’ that lead them — is as old