Mar ’23: Harvesting tax losses

March has been rather a wet month in London. Wet, and cold. This translates into the ski slopes in the French Alps (finally) having great conditions – sadly too late for me to enjoy.

Further north, it’s been a month of big change in Scotland. Nicola Sturgeon, the populist/nationalist leader north of the border, and one of the most formidable politicians in the UK, resigned in February. But March has seen her party, the SNP, in disarray. I don’t follow Scottish politics closely, but am no fan of nationalist parties and I regard March as a good month for Scotland and the UK.

Closer to home Rishi Sunak, the leader of the populist/nationalist party in England (still called the Tories but don’t let names mislead you), had a very good month thanks to his Windsor framework for improving/ameliorating the arrangements between Northern Ireland and mainland UK. Given that the problems here all arose from Brexit, which Sunak was an original supporter of, I am not minded to give him too much credit for this Windsor Framework. The new arrangements clearly lag the pre-Brexit arrangements. It grates to see Sunak championing N. Ireland’s advantages being a member both of the UK and of the EU, and until I see Tesla/similar set up a car factory in Northern Ireland I don’t think he fools anybody.

Another story that got a lot of coverage last month was how miserable the London Stock Exchange is. Versus the USA stock markets, the case is pretty unarguable. But the point that gets missed by all the UK coverage is that all the other major stock markets, such as Hong Kong, Australia, etc suffer from the same concern. A combination of its tech strengths and network effects have given the US what appears to be an unassailable lead. But somehow I consider the US has plenty of capacity for self harm, and the UK and EU are likely to sync up their financial markets more in the future, so I am more optimistic about London than the current media.

Market movements in March

In the markets, the key stories remain energy and inflation. Interest rates seem to be close to their peak, which has helped lift bonds and depressed the USD. Equities generally sagged, though tech stocks rose significantly – this combination left the US up, the UK down, and Europe/Australia somewhere in the middle.

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