Volatile markets reflect fears of reality

Many refer to the growing gap between the reality of Covid-19-torn economies and equity markets. Battered businesses trying to adapt to social distancing and closures struggle to generate profits, to meet rent bills – or pay dividends. At the same time, major equity indices hit new highs. Most of us run with the wind, which … Continue reading “Volatile markets reflect fears of reality”

Treasuring trade

Global trade is good for everyone but it’s taken a back seat in the past year. Can we look forward to its renaissance in 2021 and beyond? One of the few topics on which economists agree is the benefits of global trade. Among the first lessons taught to economics students is the Ricardian theory of … Continue reading “Treasuring trade”

Wall of money keeps markets buoyant

Inflation is not the enemy of central banks right now and their printing presses continue to run. Money creation look set to continue and government debts will rise. There is uniformity amongst the leading central banks of the world that recession, not inflation, is the enemy. They are all offering ultra-low interest rates, substantial money … Continue reading “Wall of money keeps markets buoyant”

Post-Brexit trade deal: three key takeaways

As 2020 drew to a close, it marked not only an end to a dismal year beset by Covid-19, but also to the UK’s transition period as it ended its membership of the European Union. There was relief over the festive period among investors that a trade deal had been finalised, helping to boost sterling. … Continue reading “Post-Brexit trade deal: three key takeaways”

Patience required on the path to recovery

The growing confidence that 2021 will be much better than the year we have just endured is probably correct. That these positive emotions are stirred over Christmas and new year is right and proper – as feelings of optimism and renewal are central themes in our winter celebrations. There is also real evidence to support … Continue reading “Patience required on the path to recovery”

Looking back at the markets through November 2020

A selection of articles looking back through the markets last month. Global Market Review A November to remember It was a November for investors to remember as a widespread focus on the perceived safe havens of gold and government bonds was replaced by renewed interest in equities. Many major equity markets notched up double-digit gains … Continue reading “Looking back at the markets through November 2020”

Are investors adjusting to the new normal?

Potential for recovery following Covid-19 and trends which have accelerated as a result of it give many reasons for optimism heading into 2021. The list of reasons for investor uncertainty heading into 2021 remains long. A global pandemic. Lockdowns. Volatile markets. Political turbulence. Uncertainty over jobs and the economy. Record levels of government borrowing – … Continue reading “Are investors adjusting to the new normal?”

Brexit, US Stimulus and Fed meetings the key focus for investors

Brexit and US Stimulus deadlines pass without meaningful change The Collins Dictionary defines a deadline as ‘a time or date before which a particular task must be finished or a particular thing must be done.’ With US Fiscal Stimulus and Brexit talks both hurtling through yet another pair of ‘deadlines’ at the end of last … Continue reading “Brexit, US Stimulus and Fed meetings the key focus for investors”

Trade policy under Joe Biden

Donald Trump’s focus on trade will be tempered under President-elect Joe Biden, but he understands the potency of Mr Trump’s rhetoric on these matters. President Trump in 2016 set out to slash the large US balance of trade deficit. He identified his villains – China, Germany and Japan – and set about exposing the villainy. … Continue reading “Trade policy under Joe Biden”

How the 2020 global share slump and recovery ranks in history

Stocks saw a record crash followed by a record rebound in 2020, creating some disparity between markets. The global stock market crashed at a record speed in early 2020 (Figure 1). On its way to a total decline of 34%, it clocked up a 30% loss in just 40 trading days. This is faster than … Continue reading “How the 2020 global share slump and recovery ranks in history”

Care needed with big power politics

The pandemic and the stimulus packages have preoccupied markets for most of this year but risks relating to the aims of the great powers are too important to ignore. The growing tensions between China and the US are likely to characterise the Biden era as much as Trump. One of the few things Democrats and … Continue reading “Care needed with big power politics”

Markets vs the Economy: The Big Disconnect

In March, governments across the world scrambled to contain COVID-19 by imposing draconian restrictions on activity.  As offices, shops, roads and rails emptied out, vast swathes of the economy were mothballed.  Over the next six months, we witnessed both the sharpest contraction and the fastest rebound on record, driven entirely by governments’ decisions to restrict … Continue reading “Markets vs the Economy: The Big Disconnect”

Biden presidency could trigger global reallocation to Asia

Less confrontational style likely to lower headline risk and may drive global investors to refocus on the fundamental strengths of Asia’s economies and financial markets. Asian financial markets could reap the benefits if US president-elect Joe Biden proves to be more conventional than his predecessor in the White House, potentially triggering a reallocation of global … Continue reading “Biden presidency could trigger global reallocation to Asia”

The four “M”s: why the 21st century belongs to Asia

For a look into the future of the global economy, and where the power is shifting, consider technology developments in both China and India. In a mere decade, China’s e-commerce market has grown from less than 1% of global sales, into the world’s largest market in 2016, representing more than 40% of transactions by value. … Continue reading “The four “M”s: why the 21st century belongs to Asia”

What a difference a vaccine makes

The announcement that a vaccine might be available before the end of the month that works and is safe changed everything – and nothing.  The optimists in markets decided that the news would be confirmed and get better. They think the vaccine they will complete its trials, it will pass its safety test – and … Continue reading “What a difference a vaccine makes”