What happens when rates go up?

A look at the implications of rising interest rates in the US. The US Federal Reserve has begun the painstaking process of raising interest rates, up to 0.5% to 0.75% in December, and has signalled 2017 will contain more of the same. We believe that strong fundamentals support the idea that the US stands to … Continue reading “What happens when rates go up?”

Has the US market risen too far too fast?

Markets do not normally go up in straight line. They usually have pauses for reconsideration and bouts of fear. Investors got over their shock and dismay at the election of Mr Trump very quickly. Share markets soon latched on to the reflationary potential of the Trump tax cuts, proposed increased infrastructure spending and more interventionist … Continue reading “Has the US market risen too far too fast?”

Will 2017 be as good as 2016?

It is unlikely 2017 will offer as clement an investment climate as 2016, but the outlook is still upbeat. As the New Year dawns, investment managers have some sense of relief if they can report decent positive returns for the year just ended. 2016 was generally a good year for UK investors. UK bonds produced … Continue reading “Will 2017 be as good as 2016?”

How will investments perform in 2017?

Despite political uncertainty, and some notable surprises, UK investors have largely benefitted from some positive trends during 2016. But what does 2017 hold in store for the major asset classes? Equities It remains to be seen whether Donald Trump’s widely-anticipated reflationary policies will pass through Congress. If his planned infrastructure spending aimed at igniting growth … Continue reading “How will investments perform in 2017?”

Market predictions for 2017

After a turbulent and unpredictable 2016, Charles Stanley’s Chief Investment Officer Jon Cunliffe takes a look at what could be in store for global markets in the year ahead. If there is one lesson to learn from 2016, it is to expect the unexpected. Britain’s vote to leave the European Union and the election win … Continue reading “Market predictions for 2017”

Why 2017 UK inflation fears are overdone

UK inflation in November came in higher than expected, but we think that concerns over a damaging rise in prices over the next 12-18 months are overdone. On the face of it a sharp rise in inflation looks likely, with worrying implications.  UK imports account for 30% of GDP and trade-weighted Sterling is 15% lower … Continue reading “Why 2017 UK inflation fears are overdone”

The euro on the ballot paper?

What impact will the looming elections in Europe have on the euro and the markets? Revolts against the political establishments of advanced countries are becoming commonplace. The Brexit and Trump decisions have so far been positive for shares in the UK and US, despite big doubts and unhappiness for many in markets on the news. … Continue reading “The euro on the ballot paper?”

Will the UK consumer keep spending?

There have been alarms put round that the UK will witness a big squeeze on real incomes, leading to a reduction in consumer demand. The argument goes that the devaluation of the pound will cause substantial price increase, which will eat into wage increases and cause a fall in real incomes and spending power. The … Continue reading “Will the UK consumer keep spending?”

Volatile bonds: What is happening to interest rates?

This year the US, UK and German bond markets have moved together. Whatever the news, rates have followed similar trends and patterns. It is true US rates have stayed the highest of the three, and German rates by far the lowest. In each market rates fell from their highs on 1 January to reach new … Continue reading “Volatile bonds: What is happening to interest rates?”

Historic win by Donald Trump

An assessment of the historic win by Donald Trump in the US Presidential election. It was always a possibility that Mr Trump would win the US election, despite the worries and fears of market commentators and those in the main economic institutions.  Charles Stanley took a cautious approach ahead of the event, recognising that there … Continue reading “Historic win by Donald Trump”

Is a Trump win now possible?

John Redwood, Charles Stanley’s Chief Global Strategist, looks at Donald Trump’s performance in the US presidential election campaign Mr Trump has so far outperformed in this election. The pundits wrote him off early on. The whole might of the Republican Party got behind an alternative candidate to try to prevent him getting the nomination. Many … Continue reading “Is a Trump win now possible?”

Has China borrowed too much?

The worriers are back warning us that China has borrowed too much. If China was assessed by the same standards as the advanced world, they would be taking a different view. In China, state debt is only around 40% of GDP, compared to six times that amount in neighbouring Japan. The hostile commentators look at … Continue reading “Has China borrowed too much?”

Should we worry about Japanese debts?

Investors like to worry. When you’ve got your money at risk it is natural to do so. It is commonplace to read about the very high levels of Japanese state debt, with some querying how much longer it can carry on. Japan has the highest level of state indebtedness of the main economies. Its gross … Continue reading “Should we worry about Japanese debts?”

A tale of two visits

John Redwood, Chairman of the Investment Committee at Pan Asset takes a look at the Indian and Chinese stock markets. On the 20th October the President of China Xi Jinping will arrive in London for a state visit. The guest of the Queen, there will be a grand banquet at Buckingham Palace, and business meetings … Continue reading “A tale of two visits”

Sterling weakness and plenty of money

The UK has been battling down its government deficit for the last seven years.  In the March Budget book they forecast an annual deficit of £55bn for the present year, down from £72 bn this year. They also forecast a falling path for UK state borrowing as a proportion of our GDP, with net debt … Continue reading “Sterling weakness and plenty of money”