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St. James's Place Partnership

Please find attached this week’s Bulletin which contains the following points:

• Greece’s descent into financial ignominy was completed last week as it signed-up to another EU/IMF bail-out and associated austerity package.

• A last minute agreement to get German and French banks to agree to roll-over some of their debt, in return for advantageous repayment terms, sealed the deal.

• Global equity markets, in response, enjoyed one of their most powerful rallies for two-years as investors breathed a huge sigh of relief over Greece but also had a double-whammy of better-than-expected manufacturing data from the US.

• By the end of the week equity markets were up c5% as was oil whilst gold and government bonds fell as investors switched from ‘risk-off’ to ‘risk-on’.

• But it was not all good news – the US has reached its borrowing limits whilst its politicians wrangle but no-one seriously expects it to default as the consequences are too enormous.

• The UK recovery continues to fade with a drop in consumer confidence and more failures on the High Street last week. House prices remain in the doldrums too with mortgage lending languishing according to the BoE.

• European equity manager, Stuart Mitchell, explains his current strategy and why he is optimistic looking ahead.Kind regards,