Shares tread water in May 21

Share Performance in May 21

It is a rare month when every index we follow only moves by +2% to -2%. Indeed, even most of the individual share price movements were within modest parameters.

After the events of the last 12+ months it might be ‘good’ to put this down to an uneventful month for UK and global news. But that is not the case. C-19 seems to be getting worse in many parts of the word – in particular India. Tensions are rising in many areas what with ‘hijacked’ airplanes and mounting tensions with China. Here in the UK we had the Dominic Cummings circus.

From an economic viewpoint, there is little doubt that the UK and US are roaring back to life. Indeed staff (or should I say ‘skills’) shortages are common place. But, to counter this, there are fears that inflation will raise its ugly head again. Indeed are talking of ‘1970s-type’ inflation. As I lived through double digit inflation – and interest rates – I really wouldn’t wish that only anyone. Indeed, people under the age of 40 have been used to low inflation and interest rates for all of their working lives.

Worth pointing out however that all the major indices we follow – NASDAQ, FTSE100 and the FTSE IT Index -are all up between 7%-9% in 2021 YTD. Rather better than inflation at 1.5% and much better than the 0.1% you can get on an instant access account!

Outlook

I’d like to think that life might get back to something closer to normal in the next month. Indeed I’ve already had my first hotel holiday in 15 months and several meals out. There is certainly a pent -up demand for these things in the Holway household – and I suspect in the households of many HotViews readers too. That can only be good for the economy and, in turn, for the tech companies supplying services to those customers.

The problem is that one cannot be totally certain about anything – in particular the detrimental effects of a further mutant C-19 strain.

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Posted by Richard Holway at '06:53'