I have had the most MARVELLOUS week. The first power cut (from Monday night to 3pm Tuesday) made working from home…..fun! And the second one from 5pm to 10pm Wednesday was even better! This is all part of some huge conspiracy plan to turn us all into some grotesque post-modern Smeagols, dribbling with pleasure when Master gives us a working light bulb, a computer and the children still in school. Tired I am, dark it is, utterly pissed off I am, but Master gave me light and schools, lucky Smeagol! Precious!

Ahem….right. Now that’s out of my system let’s get on with the show!

Rishi Sunak’s Spending Review this week was a bit like watching a nice friendly generous Hobbit realising that he was destined to play with Orcs for a very long time to come. “Our health emergency is not yet over. And our economic emergency has only just begun.” Oh terrific. Ease us in gently, why don’t you.

Here are some headlines:

• We are skint. The UK is set to borrow nearly £400 billion this year. Boris has nothing left in his nasty little pocketses.

• We will become more skint. Gross Domestic Product (the value of stuff we make) will fall by over 11% this year. (That’s really bad, just to be clear). Economists normally go all apocalyptic if it falls by 2 or 3%.

• Jobs are in a downward spiral. Unemployment is forecast to go to 7.5% next year.

• Don’t expect any pay rises.

• Taxes are heading north in Middle Earth. That includes Council Tax too.

Like all of us, Rishi couldn’t actually bring himself to talk about Brexit because he too would have to lie down, foaming at the mouth and reaching for the gin.

The next step on our journey takes us from Westminster to the City. It’s a mixed bag, but there are jollier messages to be found.

• The FTSE100 is still ‘only’ about 18% off January highs – which is a near miracle after a year of thwacked productivity and Brexit-Schmexit. Slight collywobbles around this morning as some vaccine-euphoria evaporates. A lone outcast, drinks-maker Diageo defied the trend by rising 0.4% as the news of my alcohol consumption on Wednesday evening hit markets.

• News that Arcadia is on the brink of collapse is devastating because the group has 14,999 employees in addition to Orc Commander Gothmog (aka Phillip Green). I grew up with Top Shop. I bought my first ever three-tier ra-ra skirt from there. (With red piping, ladies, a detail I hope you enjoy.) A victim of a bigger high street demise that we can’t just blame on Covid.

• More generally, home-grown investments are looking a bit limp.

• Over the pond, the NASDAQ100 tech-heavy index continues to play the part of Gandalf, defying the odds and pulling out some magic.

• Tesla shares sky-rocketed this week by more than a whopping 30% and Elon Musk – surely Lord of Rivendell – is now the world’s second richest man. Why? Well, Tesla will be added to the list of 500 companies in the so-called S&P500 on 21st December. This S&P list is important because all the passive funds out there (cheaper collections of investments which involve no human decisions from people with expensive habits called Jeremy or Tristan, but just buy whatever is on these investment ‘playlists’) will have to buy Tesla shares to add to their funds, and all this demand pushes prices up.

• It’s not just the States. My JP Morgan Emerging Markets Investment Trust is up by over 35% since March gloom. The tech-heavy Baillie Gifford Global Discovery fund is up by over 50%. And the iShares Global Clean Energy Fund too. There are of course plenty of other examples out there.

Don’t take those as recommendations – I’m just making the point that these are markets in which some sectors, regions and themes are having their day in the sun. Whilst others feel the broader chill of Winter……! But of course investing is seasonal too so there’s little point in all racing to buy gloves in March.

Have a good weekend everyone. Hang on in there. Winter is coming but so is Spring. Time to channel our inner Hobbits. “Even the smallest person can change the course of the future”.

Holly