How might higher inflation affect your portfolio?

The latest figures for US consumer prices showed that the rate of inflation increased the most since September 2008. This is raising fears that we are headed for a sustained bout of inflation. Rapid price increases lower a currency’s purchasing power, reducing the amount of goods and services you can buy with money. This damage … Continue reading “How might higher inflation affect your portfolio?”

Is the Federal Reserve really in control?

Whenever investors have a rush of doubt over inflationary pressures or the possibility the Fed might start to reduce its assistance, there are short, sharp sell-offs in riskier assets. The Fed is very clear about what it is trying to do. It is working closely with the Biden Administration on a huge joint stimulus of … Continue reading “Is the Federal Reserve really in control?”

ESG is the culmination of 200 years of ethics

Ethical investment was first practised by the Methodists and Quakers in America in the early nineteenth century. ESG is a continuation of the ideas they developed. Environmental, Social and Governance (ESG) investing is a relatively-new name for something that isn’t new at all. Ever since stock markets were first established, investors have considered their own … Continue reading “ESG is the culmination of 200 years of ethics”

Can global cities still thrive after the Covid-19 crisis?

The Covid-19 pandemic has led to many changes in the way people live and work. With many forced to work from home during lockdown, some people are now questioning whether they need to live in the city in which they work. This has prompted much speculation in the media about the future of global cities … Continue reading “Can global cities still thrive after the Covid-19 crisis?”

Inflation will rise and will test the Fed

The Federal Reserve accepts that inflation will rise above 2% this year, but the central bank insists this will be temporary and longer-term inflation expectations remain anchored. To many in the markets the authorities have got away with it. We have just lived through a period of unprecedented peacetime money creation by central banks, with … Continue reading “Inflation will rise and will test the Fed”

Stock markets are not economic reality

Equity cycles have some relationship to GDP growth, but they are also dependent on central banks’ policies, lending by commercial banks – and on investors’ ever-changing view of the future. Market commentators and forecasters spend a lot of time trying to predict what will happen to economies – and therefore to turnover and profits of … Continue reading “Stock markets are not economic reality”

China offers a glimpse of life after lockdown

China delivered a startling reminder of what a post-pandemic world might look like, setting a new record high for domestic tourism during its Labour Day holiday this month. The national May 1-5 break saw 230 million Chinese citizens make in-country trips1 – the equivalent of more than half of the entire European Union on the … Continue reading “China offers a glimpse of life after lockdown”

The pandemic has a further sting

Equity markets are discounting a fast pace of recovery in the second half of 2021. But investors need to watch out for those countries where lockdowns will need to intensify. The virus is not defeated yet. According to the European Centre for Disease Prevention, in the last two weeks, India experienced 4.8 million new cases of … Continue reading “The pandemic has a further sting”

How much more QE? Markets need their sugar high

Last week the Bank of Canada slipped out that it was cutting its Quantitative easing programme by one quarter, taking it down to C$3bn a week of bond buying from C$4bn. They got away with it, and markets remained unruffled. Over at the ECB, Mrs Lagarde wanted people to know they are accelerating their QE … Continue reading “How much more QE? Markets need their sugar high”

Things usually turn out better than we feared

Over time things have a habit of turning out better than we feared. This is not to suggest that we adopt a Pollyanna mindset, but to simply highlight that there is a tendency to view uncertainty as a negative.  Now, if we turn to the business of investing the whole exercise is fraught with uncertainty, … Continue reading “Things usually turn out better than we feared”

How strong might the UK’s post-Covid economic recovery be?

Despite encouraging signs, policy support will be required for some time to come. It has been a tough start to the year for the UK. As lockdown restrictions continue to slowly ease, we examine the progress made in tackling the Covid-19 pandemic, and whether hopes for a strong economic recovery are well founded. Vaccines offered … Continue reading “How strong might the UK’s post-Covid economic recovery be?”

Are higher business taxes on the horizon?

The finance ministers and central bankers of the world’s biggest economies met to refine their action plans for recovery and world financial governance. What are the likely outcomes? Finance ministers and central bankers want to set a minimum corporation tax rate for the world, partly to prevent the largest global companies such as the digital … Continue reading “Are higher business taxes on the horizon?”

UK mid-caps – far from middle of the road

No matter what their size, the past few years have been tricky for UK companies. First Brexit, then the Covid-19 pandemic – two headwinds that saw many investors leave the UK equities market for more certain climes. Now though, with an acceptable Brexit conclusion and a potential vaccine-led recovery, we believe UK equities, mid-caps in … Continue reading “UK mid-caps – far from middle of the road”

Which equity sectors can combat higher inflation?

The sharp rise in bond yields over recent weeks has rattled equity markets amid fears that fiscal stimulus and a post-pandemic spending splurge could stoke higher inflation. Five-year inflation expectations, as measured by the yield difference between nominal and inflation-protected US Treasury bonds, have rebounded sharply from their pandemic lows and are now at 2.5% … Continue reading “Which equity sectors can combat higher inflation?”

The pandemic takes a large toll on Europe

Europe has endured one of the worst experiences of the pandemic worldwide, with high case rates and all too many deaths. By 18 March, the European Union’s official figures showed 24 million cases to date and 577,000 mortalities. All seven of the countries that have recorded more than 1,900 deaths per million from Covid-19 globally … Continue reading “The pandemic takes a large toll on Europe”