Looking back at the markets through April

A selection of articles looking back through the markets last month. Global Market Review Painful consequences Following March’s collapse in share prices, global stock markets made a partial recovery in April, although most major indices still sustained double-digit losses compared with the start of the year. As the coronavirus pandemic continued to cut a swathe … Continue reading “Looking back at the markets through April”

The moral hazard of crisis intervention

US markets closed up 12% in the shortened pre-Easter week as new coronavirus case growth fell globally and an undercurrent of monetary and fiscal support helped keep sentiment buoyant. Many global markets have now entered ‘bull market’ territory. Nonetheless, European markets remain 20-25% off their 01 January levels, so you’d be forgiven for not feeling … Continue reading “The moral hazard of crisis intervention”

China standing out among emerging markets

Like those almost everywhere else, emerging markets (EMs) suffered a coronavirus shock in March. Having plunged by nearly a third in the early part of the month, however, EM share prices partly recovered towards the end. Promises of large-scale monetary and fiscal stimulus in the US arrested the declines, but EM stocks still had a … Continue reading “China standing out among emerging markets”

US Senate reaches agreement to a $2 trillion fiscal stimulus package

As expected, the US Senate reached agreement between the parties to a $2 trillion fiscal stimulus package yesterday, which gave the markets a big boost. Democrats allowed substantial funds to be available for business through a $500bn fund for industries, cities and states, with a $367bn loan programme for small business. They also accepted the … Continue reading “US Senate reaches agreement to a $2 trillion fiscal stimulus package”

Why is the current market vulnerable?

Sharp falls in equity markets are never pleasant for investors, but the recent market weakness needs to be viewed in context of last year’s market environment, where we saw one of the strongest rallies in global equities in recent times. To illustrate, the US stock market (S&P 500) returned 31.5% in US Dollar terms last … Continue reading “Why is the current market vulnerable?”

Looking back at the markets through January

A selection of articles looking back through the markets last month. Global Market Review Coronavirus hits investor sentiment Investor sentiment was initially buoyed in January as the US and China signed their interim trade deal, driving US share indices to new all-time highs. However, major global equity markets ultimately ended the month in negative territory … Continue reading “Looking back at the markets through January”

The US-EU economic battle

Donald Trump spoke out at Davos, condemning the people he called the “perennial prophets of doom” for forecasting climate and other disasters. He said they “are the heirs of yesterday’s foolish fortune tellers. They want us to do badly”. He did not name the EU or individual European countries, but the implication was clear. His … Continue reading “The US-EU economic battle”

Markets are due a pause for breath

Shares continue to rocket, with equity market gains in 2020 impressive. But can this performance continue?  After the party comes the hangover. The risk-on rally in equities that started at the end of September looks overdue for a pause – and any correction following the recent melt-up would be pretty healthy. For investors becoming concerned … Continue reading “Markets are due a pause for breath”

Are we witnessing the US dollar’s fall from grace?

A world in which money is scarce might appear to be a far-fetched idea. But for US banks in the business of taking deposits and making loans, this has become a reality. The chart below shows a global shortage of US dollars has emerged, shown in the left hand vertical axis in  billions. It has … Continue reading “Are we witnessing the US dollar’s fall from grace?”

How far will the monetary boost go?

The world’s central banks are keen to boost economies. Many are using the scope of falling US interest rates to do something similar themselves. Some are worried about the lack of money in the markets and are taking action to boost liquidity. Some are concerned about a low rate of new borrowing reflecting poor rates … Continue reading “How far will the monetary boost go?”

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”

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”

A balanced view: Investors wake up to fundamentals

While markets of late have been dominated by positive returns across all asset class, 3 factors drove Equities down in August: US corporate reporting season highlighted the deteriorating health of the underlying business, provided an earnings recession. Trade wars continue to run – the longer they do, the more lasting and permanent the drag on … Continue reading “A balanced view: Investors wake up to fundamentals”

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”

Looking back at the markets through July

A selection of articles looking back through the markets last month.   Global market review Possibility of “no deal” moves closer Boris Johnson beat Jeremy Hunt during July to become the new leader of the Conservative Party and the UK’s new Prime Minister. The new Government’s harder-line approach to Brexit – and the increased prospect … Continue reading “Looking back at the markets through July”