Looking back at the markets through October

A selection of articles looking back through the markets last month. Global Market Review Election fever October saw the UK plunge into election fever as progress on Brexit once again ground to a halt. Although Prime Minister Boris Johnson managed to reach a new Brexit Withdrawal Agreement with the EU , he failed to win … Continue reading “Looking back at the markets through October”

UK economy rebounds to avoid recession

Unless the economy improves and a smooth Brexit is achieved, interest rates may be lowered.  The first release of UK GDP for the third quarter shows the economy avoided a technical recession. Real GDP growth was 0.3% quarter-on-quarter compared to -0.2% in the second quarter, although the latest figure did disappoint consensus expectations of 0.4%. … Continue reading “UK economy rebounds to avoid recession”

Investors must get used to an environment of lower growth

We will have to get used to an environment of lower growth. However, this is the kind of environment in which active managers will truly prove their worth. “Nobody buys a farm based on whether they think it’s going to rain next year. They buy it because they think it’s a good investment over 10 … Continue reading “Investors must get used to an environment of lower growth”

Muddling through with low interest rates

Central bank action has supported markets this year but we need to see a recovery in corporate earnings. The world should escape a general recession this winter. The forecast manufacturing downturn has occurred, led by falls in vehicle output. Individual countries have flirted with recession. Italy was in a shallow recession last year, and German … Continue reading “Muddling through with low interest rates”

Bank of England takes dovish turn, but for how long?

The Bank of England (BoE) left interest rates at 0.75% as expected. However, there was a surprise as two members of the monetary policy committee voted to cut rates. The more dovish1 vote (7-2 rather than the widely expected 9-0) came alongside a downgrade to the bank’s global growth assumptions. Weaker UK growth is also … Continue reading “Bank of England takes dovish turn, but for how long?”

A look at equity markets in Japan and China

On a day when Wall Street has reached new all-time highs, there has been some favourable effects on equity markets around the world. The bulls are buying, hoping that there will be some modest trade deal soon between the US and China. Meanwhile, all can enjoy the benefits of low-interest rates and more money available … Continue reading “A look at equity markets in Japan and China”

Smooth Brexit could be on cards as election looms

A smooth Brexit could remove some of the fog of uncertainty over the UK economic outlook, a prospect made more likely by the agreement to extend the deadline to 31 January 2020. EU President, Donald Tusk, has announced that the EU has agreed in principle an extension to the Brexit deadline to 31 January 2020. … Continue reading “Smooth Brexit could be on cards as election looms”

The comfort of strangers: investors should look to the less familiar

Adaptation is necessary when an environment becomes less favourable. So, as the global outlook assumes a gloomier cast, we believe investors should look beyond the comfort of conventional asset classes and bolster their portfolios with less familiar – and less correlated – assets. Secular stagnation? Recent headlines provide no shortage of alarming developments: a lurch … Continue reading “The comfort of strangers: investors should look to the less familiar”

Looking back at the markets through September

A selection of articles looking back through the markets last month. Global Market Review What next for Brexit? The long-running Brexit saga took a new twist in September as the clock continued to tick towards its Hallowe’en deadline. After being suspended earlier in the month, the UK Parliament was hastily reconvened towards the end of … Continue reading “Looking back at the markets through September”

The G7 solves nothing

The meeting of leaders over the weekend in Biarritz led to US President Donald Trump’s tweet suggesting there could be more trade talks with China after all. It was sufficient for a modest rally, after the tariff-induced sell off last week. The markets remain fixated by the twin stories of possible rate cuts to come, … Continue reading “The G7 solves nothing”

Jaw-jaw at Jackson Hole: Fed exercise to restore lost credibility could end up harming it further

This month’s Jackson Hole symposium is intended to address the ‘challenges for monetary policy’. In reality, the debate will probably be around the merits or otherwise of the US Federal Reserve (Fed) continuing to cut interest rates or not. The Fed finds itself at a taxing junction. It needs to reassure investors that it has … Continue reading “Jaw-jaw at Jackson Hole: Fed exercise to restore lost credibility could end up harming it further”

Brexit – opportunity in uncertainty?

The UK is set to leave the EU on 31 October. Under new Prime Minister Boris Johnson the prospect of a ‘no-deal’ Brexit – once viewed by many as unthinkable – is now a real possibility.  The questions are: what might be the fallout if the UK crashed out of the EU? And what would … Continue reading “Brexit – opportunity in uncertainty?”

Italy’s 66th government since WW2 looks set to fall

Trade continues to dominate the headlines with Donald Trump’s tweets around US tariffs driving sentiment. The emergence of China’s appetite to use its currency as a shock absorber also added volatility. August’s volumes are traditionally lighter and that helped catalyse a very weak start for US equities albeit a lot of the losses had been … Continue reading “Italy’s 66th government since WW2 looks set to fall”

Will the UK economy slip into recession?

Disappointing GDP data shows the UK economy contracted in the second quarter and raises the risk of the country entering a technical recession. The UK economy contracted by 0.2% in the second quarter, following 0.5% growth at the start of the year. What was behind the data? A sharp drop in manufacturing output (-2.3%) over … Continue reading “Will the UK economy slip into recession?”

Tough times for the UK may force rate cut

The UK economy is struggling to stay above water. Brexit uncertainty has hit confidence, causing many companies to postpone or cancel investment projects. Even households are now cutting back. According to the latest survey from the British Retail Consortium, average sales growth weakened to just 0.6% in the 12 months to June, which is the … Continue reading “Tough times for the UK may force rate cut”