Looking back at the markets through April 2021

A selection of articles looking back through the markets last month. Global Market Review Optimism drives share prices in April Global equity markets generally rose during April, buoyed by encouraging economic data from the US. The International Monetary Fund (IMF) upgraded its forecasts for global growth from 5.5% to 6% in 2021 and from 4.2% … Continue reading “Looking back at the markets through April 2021”

Stock markets are not economic reality

Equity cycles have some relationship to GDP growth, but they are also dependent on central banks’ policies, lending by commercial banks – and on investors’ ever-changing view of the future. Market commentators and forecasters spend a lot of time trying to predict what will happen to economies – and therefore to turnover and profits of … Continue reading “Stock markets are not economic reality”

Looking back at the markets through March 2021

A selection of articles looking back through the markets last month.  Global Market Review “Light at the end of the tunnel”? The global economic outlook has improved, according to the Organisation for Economic Cooperation & Development (OECD), which upgraded its growth forecasts, as vaccine rollouts gain momentum and governments – particularly the US – provide … Continue reading “Looking back at the markets through March 2021”

How strong might the UK’s post-Covid economic recovery be?

Despite encouraging signs, policy support will be required for some time to come. It has been a tough start to the year for the UK. As lockdown restrictions continue to slowly ease, we examine the progress made in tackling the Covid-19 pandemic, and whether hopes for a strong economic recovery are well founded. Vaccines offered … Continue reading “How strong might the UK’s post-Covid economic recovery be?”

Trade policy under Joe Biden

Donald Trump’s focus on trade will be tempered under President-elect Joe Biden, but he understands the potency of Mr Trump’s rhetoric on these matters. President Trump in 2016 set out to slash the large US balance of trade deficit. He identified his villains – China, Germany and Japan – and set about exposing the villainy. … Continue reading “Trade policy under Joe Biden”

Markets vs the Economy: The Big Disconnect

In March, governments across the world scrambled to contain COVID-19 by imposing draconian restrictions on activity.  As offices, shops, roads and rails emptied out, vast swathes of the economy were mothballed.  Over the next six months, we witnessed both the sharpest contraction and the fastest rebound on record, driven entirely by governments’ decisions to restrict … Continue reading “Markets vs the Economy: The Big Disconnect”

Debts, deficits and stimulus

We have just witnessed the Japanification of world finance as central bank attempt to counteract measures to stop Covid-19. How will this all end? Never before in human history has so much extra money been created by central banks and thrown at a deep recession. Never have governments pledged to borrow so much as they … Continue reading “Debts, deficits and stimulus”

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”

Do shares always win in the long run?

It used to be a common belief of many managers that if you bought and held a portfolio of shares over any market cycle you would earn a decent return. This argument may be changing. The argument went that the sharp cycles in shares were based on shallower and shorter cycles for economies. They might … Continue reading “Do shares always win in the long run?”

The end of the beginning, not the beginning of the end

It is becoming clear that the global recovery from the COVID-19 recession began in May. Widespread, albeit still incomplete, success in slowing the spread of the virus has prompted most governments to begin easing lockdowns over recent weeks, following China’s earlier lead. That has led to broad-based improvements in business and consumer confidence, alternative indicators … Continue reading “The end of the beginning, not the beginning of the end”

Central banks continue to prop-up markets

The tsunami of money has been unprecedented and is the main reason equity markets have performed as they have. The stimulus measures have been at their largest in the US, where money growth has shot up to 25% for the year. In the Eurozone and the UK, it is a lively but more modest 10%. … Continue reading “Central banks continue to prop-up markets”

Plumbing the depths

Yesterday The Office of Budget Responsibility in the UK tried to update its forecasts for the UK economy. They emerged at the pessimistic end of the current range of estimates but attracted news coverage because of who they are. They anticipate on the scenario they published a fall of 35% in the UK second-quarter GDP, … Continue reading “Plumbing the depths”

How long a shutdown can governments afford?

If a return to work is organised after the three-month stage, there will be some rebound, but economies will not spring back into full output immediately. The Central Banks have responded quickly and with great force to the crisis. Led by the Fed they have produced huge amounts of cash to keep markets afloat, rescuing … Continue reading “How long a shutdown can governments afford?”

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”

Brexit: what’s next? The crunch dates ahead and what investors expect

“Brexit day” is nearly upon us, but the saga is far from over. We look at the key dates to come and what investors think will be the outcome. The UK voted to leave the European Union by a margin of 52% to 48% in a referendum held on 23 June 2016. Since then, the … Continue reading “Brexit: what’s next? The crunch dates ahead and what investors expect”