Growth to slow as trade wars escalate

As a deeper and more prolonged trade war is anticipated between the US and China, we have downgraded our global growth expectations and forecast slower growth in both 2018 and 2019. Much of the slowdown can be attributed to the effect of trade wars. Europe and Japan disappoint Two of the world’s most export-oriented economies, … Continue reading “Growth to slow as trade wars escalate”

Doom Loop

The most likely candidate for the next ‘Lehman moment’ is in Europe. In some ways the regulatory response that followed in the years after the collapse of Lehman Brothers has been a success. The days of racy balance sheets chasing outsized profits on wafer thin capital are largely over; replaced by a mantra of prudence … Continue reading “Doom Loop”

Russian influence on Western markets

The Russian stock market remains cheap by Western standards, with people applying a Russian discount for the political risks. The market is dominated by the large oil and gas enterprises including Rosneft, Lukoil, Gazprom and Surgutneftegas, and has done well since 2014. Much of the gain has come from the rise in energy prices increasing … Continue reading “Russian influence on Western markets”

Genoa tragedy sets Italy on course for EU clash

The tragic loss of lives in Genoa when a large section of an elevated motorway collapsed is one of those dreadful events that should not have happened. We all feel for the families scarred by loss. It is a big event which is having a dramatic effect on Italian politics and government. This matters at … Continue reading “Genoa tragedy sets Italy on course for EU clash”

Turkey: an idiosyncratic problem or a threat to wider emerging markets?

Turkey has seen a temporary resolution to its current crisis with the injection of $15bn of Qatari cash, but it is still in crisis. The Qatar offer, from Sheikh Tamim bin Hamad Al-Thani, is designed to help the country ride out its currency crisis, which has seen the lira plunge. However, it is a short-term … Continue reading “Turkey: an idiosyncratic problem or a threat to wider emerging markets?”

Property investors are in need of some retail therapy

Many would say that high street retailing is dead. The reality is that no high streets have truly perished and very few will be completely wiped out. Yet many are undoubtedly shadows of their former selves, most will never be the same again, and relatively few could be considered in fine fettle. The global financial … Continue reading “Property investors are in need of some retail therapy”

Trump’s tariffs

Last week, the White House announced tariffs on imported steel and aluminum of 25% and 10% respectively – a move that sparked global indignation and threats of a trade war. But tariffs are more common than you may imagine. Almost every US president since Ronald Reagan has announced a tariff of one kind or another. … Continue reading “Trump’s tariffs”

Italian election yields a bitter stalemate

Italy is not usually known for its political stability, so the results of its general election come as no surprise. The bitter and divisive contest yielded no overall winner, but the swing towards populist extremist parties could be a concern. Based on exit polls, the anti-establishment Five Star Movement appears to be the single biggest … Continue reading “Italian election yields a bitter stalemate”

Time to revisit the Italian election

Markets have been relaxed about the Italian election.1 Last year it was on the investment radar as a potential risk to the euro and the Eurozone, with the Five Star movement leading in the polls and expressing scepticism about the single currency. As they did well so the new leadership of Five Star toned down … Continue reading “Time to revisit the Italian election”

A healthy correction?

The phrase “healthy correction” is one of the most frequently used in the investment lexicon. It has been ubiquitous over the past few days as a descriptor of the significant falls in global markets. It is also a phrase that has puzzled me over the years. As to “healthy”? Falls of over 4% in a … Continue reading “A healthy correction?”

What has driven stockmarket returns and what will drive them in future?

While the equity markets of various countries and regions have performed very similarly over the past three years, the components of returns have been very different. When we look back over the past three years, investors have earned remarkably similar returns in local currency terms in very different parts of the world. UK, eurozone, Japanese … Continue reading “What has driven stockmarket returns and what will drive them in future?”

Call of the city – how investors can profit from urbanisation

When we think about urbanisation, we often conjure images of newly constructed skyscrapers in Asia or rapidly-growing cities in South America or Africa. Indeed, the proportion of the world’s population living in towns and cities is forecast to increase from just over half today to two thirds by 2050 (source United Nations). Most of this … Continue reading “Call of the city – how investors can profit from urbanisation”

Farewell to 2017

Is it better to travel than to arrive?  The US share market has done well this year.  It has been in fitful anticipation of tax cuts to come.  As the old year draws to a close the tax cuts have as we expected taken legislative form. The US growth rate has risen, exceeding 3% as … Continue reading “Farewell to 2017”

You didn’t think European political risk was over, did you?

The crisis in Catalonia probably won’t derail the Eurozone recovery. But there are more political challenges ahead. Markets have largely shrugged off events in Catalonia. They are probably correct to do so. After all, Catalonia is unlikely to become independent, at least for the foreseeable future. There does not appear to be a majority in … Continue reading “You didn’t think European political risk was over, did you?”