Investment comment
July 2010
Economic and market background
Events during the second quarter of the year left blemishes not just on the environment, but on financial markets too. The eruption of a volcanic glacier in Iceland darkened the skies of Europe, and the tragic 'blow-out' of the Macondo wellhead in the Gulf of Mexico blackened the waters of the Mississippi River Delta, but other clouds cast greater shadows over investors' fortunes.
Worries about the fragility of the global economy escalated, latterly in the wake of disappointing reports on the US housing and labour markets, but predominantly during the quarter in relation to sovereign debt. The precarious state of government finances in much of southern Europe, and associated economic risks, loomed ever larger, with Greek sovereign debt downgraded to 'junk' status and Spain losing its cherished 'AAA' credit rating.
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Investment comment
