FT News Briefing UK leaders court US investors
Aug 5, 2024
UK Chancellor Rachel Reeves is on a mission in New York and Toronto to showcase Britain as a prime investment destination. With about $1.5 trillion sidelined in money markets, the visit comes at a crucial time. Meanwhile, commodity prices have plummeted due to reduced demand from China and record agricultural output in the US and Brazil. Additionally, the upcoming elections may reshape trade dynamics with China, particularly with innovative technologies aiming to increase lithium production and support energy transitions.
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Risk Aversion in the Market
- Investors are playing it safe by parking cash in money market funds.
- This behavior creates frustration for asset managers seeking higher returns on investments.
Cash as a Preferred Investment
- Investors favor cash due to returns outpacing inflation, unlike in the past decade.
- They prefer the safety of cash amidst market uncertainty and potential losses.
Asset Manager Frustration
- Asset managers are frustrated by investors' reluctance to actively invest.
- They earn less on idle cash and perceive this as a negative market sentiment.