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?”

Which equity sectors can combat higher inflation?

The sharp rise in bond yields over recent weeks has rattled equity markets amid fears that fiscal stimulus and a post-pandemic spending splurge could stoke higher inflation. Five-year inflation expectations, as measured by the yield difference between nominal and inflation-protected US Treasury bonds, have rebounded sharply from their pandemic lows and are now at 2.5% … Continue reading “Which equity sectors can combat higher inflation?”

Looking back at the markets through February 2021

A selection of articles looking back through the markets last month.  Global Market Review Concerns grow over inflation Although most major equity indices ended February in positive territory, the month finished on a question-mark. A sharp sell-off across bond markets pushed up bond yields and drove down demand for growth stocks as investors assessed the … Continue reading “Looking back at the markets through February 2021”

Running hot – but not too hot?

Last year, the big themes that found favour in the market were the digital winners from lockdown and the potential green winners from Build Back Better. This year, there is more emphasis on the shorter-term winners from recovery. The speed and nature of that recovery is now at the heart of the market debates. Will … Continue reading “Running hot – but not too hot?”

Wall of money keeps markets buoyant

Inflation is not the enemy of central banks right now and their printing presses continue to run. Money creation look set to continue and government debts will rise. There is uniformity amongst the leading central banks of the world that recession, not inflation, is the enemy. They are all offering ultra-low interest rates, substantial money … Continue reading “Wall of money keeps markets buoyant”

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”

Looking back at the markets through August

A selection of articles looking back through the markets last month. Global Market Review   Share price rises defy an uncertain outlook Global share prices generally rose during August as investors took heart from ongoing fiscal and monetary support alongside some encouraging economic data. Nevertheless, the global economic outlook remains “highly uncertain”, according to the World … Continue reading “Looking back at the markets through August”

Where to next for the Eurozone

Will the Coronavirus battle trigger a Eurozone war? The economic and health impacts of coronavirus have not been distributed equally across the Eurozone. In particular, peripheral countries such as Italy have been hit hardest in human and economic terms. This has reopened old fault lines between member states about a shared fiscal policy to offset … Continue reading “Where to next for the Eurozone”

The importance of forecasting humility

It is natural to want to rush to judgement about the long-term changes the coronavirus pandemic will bring, whether in an attempt to get ahead of the game or simply impose some order amidst the chaos. But as understandable as that impulse is, it can also be dangerous, allowing highly speculative claims to circulate and … Continue reading “The importance of forecasting humility”

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?”

Why I’m backing a consumer comeback in Europe

Worries over slowing global growth and rising trade tensions hit European share prices hard at the end of 2018. While early 2019 saw a rally, there remains considerable scepticism over the prospects for the European economy and its listed companies. I think much of this scepticism is misplaced and the role of the European consumer … Continue reading “Why I’m backing a consumer comeback in Europe”

Whatever it takes…to raise inflation

The European Central Bank has consistently failed to meet its inflation target in the seven years since the region’s sovereign debt crisis. Nor has the market any faith that it might do so in future. With the European Union (EU) elections out of the way, the horse-trading over a host of top EU jobs will … Continue reading “Whatever it takes…to raise inflation”

Fed turns more dovish and signals an end to rate hikes

The Federal Reserve (Fed) has lowered its projections for US growth and inflation and reduced its expectations for interest rates. The “dot plot” published after last night’s meeting shows no rate hikes this year and only one in 2020.  Tighter financial conditions At his press conference, Fed chair Jerome Powell said growth was slowing by … Continue reading “Fed turns more dovish and signals an end to rate hikes”

Does the US have enough firepower to fight the next recession?

With interest rates already near record lows, what’s left in the Fed’s arsenal to fight the next recession? Low starting interest rates means that the Federal Reserve (Fed) may need to expand its policy toolkit to fight an economic downturn. But if this proves insufficient, fiscal policy need to pick up the slack. The go-to … Continue reading “Does the US have enough firepower to fight the next recession?”

29 reasons not to invest in the stock market

Wars, disasters, economic strife and political instability have been persistent themes over the last three decades and they can affect people’s attitude towards investing. In many cases they make an already tough decision to part with your money and invest even harder, leading some to not invest at all. Behavioural scientists have a name for … Continue reading “29 reasons not to invest in the stock market”