Inflation subsides

A little bit of inflation is fine for share markets. A couple of years ago some investors were very worried that the advanced world was relapsing into deflation. If prices generally start falling, people put off buying things on the reasonable grounds they will be cheaper later. This can trip an economy into recession or … Continue reading “Inflation subsides”

Curve ball

Governments aren’t the only things proving to be less than strong and stable these days. Take the Phillips Curve, which describes the relationship between unemployment and wage growth. As unemployment falls, using up spare capacity in the labour market, it makes intuitive sense that wage growth starts to pick up. Given the key role played … Continue reading “Curve ball”

Merkel’s world collides with Trump

The G20 meeting this week in Hamburg should be just another review meeting by the 19 largest economies and the EU.  The Agenda is full of long term ambitions and intractable problems, from climate change to gender equality, from financial stability to managing refugees.  You can read the background papers as worthy long term statements … Continue reading “Merkel’s world collides with Trump”

Why the oil price is now in a bear market

The price of crude has slipped into bear market territory this week, despite Opec’s attempt to boost the price ahead of the flotation of Saudi Aramco. What caused it – and will it reverse anytime soon? Crude oil prices are once again in a tailspin, on concerns that the global glut of oil is not … Continue reading “Why the oil price is now in a bear market”

Green is the new black

There is a new breed of bond in the fixed income world. It’s different, it’s bold – it’s the so-called ‘green bond’ market. As the drive towards environmental, social and governance (ESG) investing continues to gather pace, policy makers and investors alike are waking up to the importance – and benefits – of green bond … Continue reading “Green is the new black”

Does low volatility mean a shock lies in store for investors?

Despite the many economic and geopolitical risks in the world today, volatility in asset markets has been remarkably subdued. The Vix index, the market’s so-called fear gauge, has recently fallen to a reading of around 10. This is exceptionally low compared to long-term norms. and only just above the all-time low of 9 that it … Continue reading “Does low volatility mean a shock lies in store for investors?”

UK election: what a hung parliament means for markets

Following the surprise UK general election result, Schroders’ Alix Stewart,  David Docherty & Azad Zangana, consider the implications for the economy and markets.   The UK general election has resulted in a hung parliament, with no party commanding an overall majority. The Conservatives have emerged as the largest party and will likely seek to form … Continue reading “UK election: what a hung parliament means for markets”

Politics takes centre stage, once again

Overview Global equity markets (ex-UK) were relative sanguine in April, gaining between 1% and 3% in local currency once sterling volatility was removed.  As can be seen below, the strength of sterling post the election announcement has detracted from that performance for UK investors, while the market has repriced large cap UK companies for the … Continue reading “Politics takes centre stage, once again”

The Only Way Is Up…

February was a month of  universal price rises across Developed Market equities, higher risk Emerging Market benchmarks as well as safe havens such as lower risk bond markets and gold – making it difficult to see what was the key themes motivating investors. Surely something has to give? On one hand for equity markets it … Continue reading “The Only Way Is Up…”

Why all investors should care about China

Isabelle Mateos y Lago, Global Macro Investment Strategist at BlackRock, puts China in context, showing how important it has become for the global economy. China’s debt-driven growth model is starting to reach its limits. Yet the country is also transitioning into a high-tech, more consumer-driven economy. How this economic evolution plays out will have major … Continue reading “Why all investors should care about China”

Why Trump makes the case for emerging markets

Donald Trump’s first weeks as US president are turning out to be just as controversial as his bruising election campaign. A flurry of executive orders on border controls, trade and healthcare has dominated headlines, causing dismay and galvanising opposition. The drama unfolding on a daily basis makes the modest comeback that developing markets have been … Continue reading “Why Trump makes the case for emerging markets”

Increasingly hawkish language from the Federal Reserve

Although US economic growth proved somewhat disappointing during the final quarter of 2016, Fed policymakers appear ready to increase interest rates as soon as it becomes appropriate; indeed, Fed Chair Janet Yellen warned that an unnecessary delay in tightening could prove “unwise”.  Meanwhile, European investors faced fresh uncertainties surrounding Greece’s financial bailout. Leading equity markets … Continue reading “Increasingly hawkish language from the Federal Reserve”

A decade to forget for savers

It is a decade since the start of the financial crisis. What started in the US housing market later engulfed the global economy and is having an enduring legacy on the UK – perhaps most notably on savers. The first signs of the financial crisis emerged in April 2007 when New Century Financial, a US … Continue reading “A decade to forget for savers”

Living with Mr Trump

Stock markets have been in love with Mr Trump the great reflator. They look forward to his promised tax cuts for individuals and companies. They want his increased spending on infrastructure. They also quite admire the way he persuades big corporations to put America first and invest more of their corporate cash. They do not … Continue reading “Living with Mr Trump”

The world economy shrugs off uncertainty… for now

Concerns about the impact of Brexit and President Donald Trump’s populist policies on growth have been swept aside and growth forecasts are now likely to be upgraded.   Now the real business begins: Donald Trump has taken office and has started to “rebuild” America. Although we remain sceptical on the ability of the new administration to … Continue reading “The world economy shrugs off uncertainty… for now”