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In this week’s newsletter:
- ISA Tax Changes Explained: What Savers Need to Know
- These Are the FTSE’s AI Stock Winners
- The State Pension Triple Lock Explained
- What Starmer’s Resignation Means for the UK’s Credit Rating
- Time to Take Profit in These 5 European Large-Cap Stocks
- The Best US Dividend Kings to Watch
One of the most curious aspects of Keir Starmer’s resignation at the start of the week was how little bond, stock, and currency markets actually moved. This may just be a pause as investors wait to see what Andy Burnham, the likely prime minister, has planned. For now Morningstar DBRS expects an orderly transition. But there’s a hum of speculation surrounding policies, including wealth taxes, CGT, and pensions. This month he pledged to keep the state pension triple lock, a commitment he may have to ditch.
Savers and investors who were preoccupied with the Labour party’s drama or the heatwave may have missed the latest statement from the Treasury about new ISA rules, which kick in next April. The government is imposing a 22% tax on cash interest to deter people arbitraging the cash and stocks allowances. But plenty in the detail is confusing, especially around holding liquid “cash-like” assets in ISAs. A new property-based ISA is also planned.
The FTSE 100 and 250 indexes have performed modestly well this year, with returns in single digits, but those stocks with a supporting role in the AI theme have done better. Christian Mayes spoke to Rathbones’ director of equities about the merits of the “picks and shovels” approach to finding UK AI winners. One of her arguments focuses on downside protection if the AI rally unwinds, which seems pertinent in a week of high volatility for global tech stocks.
The gold price may be about to test USD 4,000 after a June slump, but the buzz around commodities continues. Valerio Baselli’s interview with Roberta Caselli, commodities investment strategist at Global X, looks ahead to the rest of the year. Silver, uranium, and lithium could be the commodities to watch as the themes of AI, defense, and energy play out.
Next week sees the start of the third quarter. Q2 was dominated by the outbreak of war and that conflict will loom large over the upcoming earnings season and key central bank decisions in Q3. We look ahead at what that means for investors in UK and European bonds and stocks.
