No time to be pig-headed

The trade war is dominating headlines and shaking investor confidence in China. But as we enter Year of the Pig, it’s worth remembering this is a long-term growth story. No sooner have the Christmas decorations come down than new ones have gone up to mark the Lunar New Year, which starts on February 5. It’s … Continue reading “No time to be pig-headed”

Is there too much borrowing?

Markets have a love/hate relationship with debt. If there is not enough of it available, shares tend to fall. More borrowing helps the world go round. If there is too much debt, markets can also fall. There is a fear that individuals and companies will not be able to pay the interest or meet the … Continue reading “Is there too much borrowing?”

Trade: Will Trump rediscover the art of the deal?

The markets have two problems with US President Trump’s approach to the trade talks. The first is he is so unpredictable that it makes it very difficult for commentators and forecasters to come up with a well-based vision of what the future holds. The second is there is a nagging worry that the US China … Continue reading “Trade: Will Trump rediscover the art of the deal?”

Why Trump and China both want to end the trade war

Optimism that the trade war that has ravaged global markets could be resolved soon is mounting. China’s Ministry of Commerce said that last week’s discussions with US representatives were extensive and had established a foundation for the resolution of each country’s concerns. In fact, it appears that things are moving into place for Donald Trump … Continue reading “Why Trump and China both want to end the trade war”

How trade wars have affected emerging market returns

The MSCI Emerging Markets Index, a measure of emerging markets (EM) equities, was down 14.3% in 2018, but this masked a considerable dispersion of returns, particularly in US dollar terms. Turkey was the year’s worst performer, thanks to a collapse in the lira, with equities losing investors 57.6% in dollar terms. The best performing major … Continue reading “How trade wars have affected emerging market returns”

China tries to balance its economy

The Chinese bear market in shares has lasted since the peaks reached in the summer of 2015. The index of share prices for the Shanghai market has halved since June 2015. Then excessive exuberance tempted many domestic buyers into the stock market. A substantial credit expansion allowed people to buy shares on borrowed money. When … Continue reading “China tries to balance its economy”

China and Taiwan tensions build

President Xi Jinping’s statement that Taiwan is properly part of China and will be fully integrated one day is not new policy. Nonetheless it seemed to upset the Hong Kong market, and made investors wonder whether there was to be a new tougher phase in China’s relations with the very successful island economy of Taiwan. … Continue reading “China and Taiwan tensions build”

2018: A year to forget

2018 will be a year that many investors would rather forget. A lucky few will still be looking for an overall gain for the year, but the past few months have proved extremely uncomfortable. What have been the highs and lows of the year?  Research by Willis Owen shows that eight sectors delivered a positive … Continue reading “2018: A year to forget”

Trade deal leaves considerable uncertainty

President Trump decided to sit down with President Xi after all at the G20 Summit in Argentina. He had blown hot and cold about whether it was worthwhile to do so, and had threatened to carry on with his increases in tariffs on Chinese goods ahead of the meeting. Markets should be growing used to … Continue reading “Trade deal leaves considerable uncertainty”

The forgotten bear market in China

In the summer of 2015, the Chinese authorities overdid their enthusiasm for wider share ownership. With their general encouragement, brokers advanced large sums to individuals to buy shares. A buying frenzy developed in the markets and the Shanghai index hit a new high of 5,166 in June. The government decided things were getting out of … Continue reading “The forgotten bear market in China”

China’s growth surprise is just the start

With the impact of tariffs yet to show up in the data, and the looming threat of a property slowdown, the larger-than-expected slowdown in Chinese growth is a taste of things to come. The larger-than-expected slowdown in reported Chinese GDP, to 6.5% from 6.7% in the second quarter, has seemingly spooked markets and pushed policymakers … Continue reading “China’s growth surprise is just the start”

Trade and banking matters hit China

The Chinese economy is one of the two giant economies in the global market. We have got used to relying on China to produce growth of more than 6%, and to supply a wide range of manufactured items at attractive prices. The combined effects of a huge expansion of Chinese manufacturing capacity, and the digital … Continue reading “Trade and banking matters hit China”

Will Trump policy hasten the collapse of the dollar?

The world’s acceptance of the dollar as its reserve currency has been positive for Americans. But with Donald Trump’s America First policy, will the world move away from the greenback. When world leaders laughed at Donald Trump’s comments in his address to the United Nations last week, it was an insight into the new world … Continue reading “Will Trump policy hasten the collapse of the dollar?”

How much damage will the trade war do?

Trade wars are not good news. Mr Trump’s imposition of tariffs on another $200bn of Chinese exports helped drag eastern markets down ahead of the event. Forecasters and pundits fear that the tariffs will curb exports and activity in Chinese factories, push up the price level a little in the US and adversely affect the … Continue reading “How much damage will the trade war do?”