The US election – just political noise?

The weakness in US equity markets in September appeared to come as a surprise to many investors, despite history pointing to this being seasonally quite typical. After such a strong and persistent rally since the Covid-19 lows of March, profit taking and market consolidation should be seen as a positive rather than a negative. However, … Continue reading “The US election – just political noise?”

UK recovery loses momentum as Covid-19 effects linger

The latest monthly UK GDP estimate shows the economy returning back to growth on a rolling three-months basis – up 8% compared to a -7.6% contraction in July, which should ensure double digit growth for the third quarter. However, the data also reveals a significant loss in momentum, as monthly growth was down from 6.6% … Continue reading “UK recovery loses momentum as Covid-19 effects linger”

The virus remains difficult to control

Even in the most freedom-loving societies there was widespread buy into controls for the initial lockdowns. Now consent is waning. It’s been another week dominated by pandemic news. Donald Trump’s contentious approach to tackling the disease has been centre stage, with his self-announced triumph over the illness thanks to a couple of drugs that he … Continue reading “The virus remains difficult to control”

Covid-19 and the Japanese model

The Japanese economy was in recession when the virus struck. GDP fell 1.8% in the fourth quarter of 2019 and experienced a further small fall in quarter 1 2020. Japan’s decline of 7.9% in the second quarter was a large fall by historic standards but was at the lower end of declines worldwide as economies … Continue reading “Covid-19 and the Japanese model”

Back on the Brexit rollercoaster: buckle up for a bumpy ride

What’s happening with Brexit? The UK and European Union (EU) resumed Brexit negotiations over the summer but made limited progress. The political drama and posturing that accompanied the proceedings look certain to persist in the coming weeks. It appears the UK intends proposing domestic laws to weaken its Withdrawal Agreement commitments on the border between … Continue reading “Back on the Brexit rollercoaster: buckle up for a bumpy ride”

A deepening divide: emerging markets and the second-quarter earnings season

Emerging markets (EMs) are often discussed as if they were somehow homogenous. That, however, is misleading. The differences between the individual markets included in EM indices are profound. The Covid-19 crisis has exposed these fundamental differences – especially those between emerging Asian economies and other parts of the developing world. And EM companies’ second-quarter earnings … Continue reading “A deepening divide: emerging markets and the second-quarter earnings season”

Has “Eat Out to Help Out” saved the UK hospitality sector?

The UK’s hospitality industry began to emerge from lockdown on 4 July when pubs, restaurants and cafes in England were allowed to re-open. Their Scottish counterparts followed from mid-July. The end of lockdown didn’t mean an end to the challenges facing the sector, with social distancing rules limiting capacity and customers wary of venturing to … Continue reading “Has “Eat Out to Help Out” saved the UK hospitality sector?”

Riding the central bank stimulus

The major issues today are how fast the recovery will be, how widespread will it be, and how much permanent damage will remain. Bulls in the stock market are excited by the recovery cycle. It now looks as if all the major economies have passed the worst of their troughs in output and incomes brought … Continue reading “Riding the central bank stimulus”

Looking back at the markets through July

A selection of articles looking back through the markets last month. Global Market Review  The other “R” number … Recession Early in July, investors were buoyed by news of progress in the development of coronavirus vaccines. However, as the month continued, optimism was tempered by a surge in infection rates in countries including the US, … Continue reading “Looking back at the markets through July”

The US Presidential election remains an uncertainty for markets

The US presidential elections take place on November 3 and Donald Trump is now closing the gap in the polls with Joe Biden. The result remains too close to call. The US election is now Democrat candidate Joe Biden’s to lose. Donald Trump’s grand strategy has been badly damaged by the virus. His plan was … Continue reading “The US Presidential election remains an uncertainty for markets”

The performance of world markets in the pandemic

Equity-market performance around the world has diverged in response to government stimulus measures and those exposed to the digital revolution. At the end of July, the S&P 500 index of larger US company shares pushed ahead of its starting level this year. Nasdaq powered on, forming more new highs. It has now delivered a 22% … Continue reading “The performance of world markets in the pandemic”

Investors expect even higher returns from the stock market in years ahead – despite coronavirus shock

Savers predict annual returns of 10.9% from their stock market investments, even as Covid-19 halted the longest economic expansion on record and plunged the world into deep recession. Investors continue to hope for double-digit yearly total returns from their portfolios, despite the huge blow inflicted on the global economy by the Covid-19 pandemic, according to … Continue reading “Investors expect even higher returns from the stock market in years ahead – despite coronavirus shock”

Brazil: will this emerging market ever emerge?

Will Brazil be an emerging market that never quite emerges? In the 2000s, the Latin American giant was making impressive progress in converging with developed economies. But since the global financial crisis of 2008, it has surrendered most of these gains. Today, the Covid-19 pandemic is hitting the country hard, threatening not only the health … Continue reading “Brazil: will this emerging market ever emerge?”

The investment trends accelerated by Covid-19

The Covid-19 outbreak is likely to change the way we think, work and live. It is accelerating trends that were already in place and changing people’s behaviour. All of this has implications for investors. Here we look at some of the long-term consequence of the ongoing pandemic. Creating jobs by de-carbonising the economy Creating jobs … Continue reading “The investment trends accelerated by Covid-19”

Five key investor questions on China answered

Amid the Covid-19 pandemic, our team considers the relative prospects for China’s economic recovery and stock market resurgence. What the pandemic has highlighted is large differences in state capacity to manage this crisis. Will China experience a ‘V-shaped’ economic recovery? We are still at the beginning of an enormous economic and social repair job. Governments … Continue reading “Five key investor questions on China answered”