Keep calm and carry on

An unexpected global pandemic has triggered the third bear market of the 21st century. At the start of the year, equity analysts had priced in profits growth of 5-10% a year, now they are downgrading their profits estimates by 5-10% a week. One of the deepest economic recessions since the 1930s will expose some well-known … Continue reading “Keep calm and carry on”

Coronavirus to spark “severe” global recession

The coronavirus is having a severe effect on global economic activity and amidst considerable uncertainty we have attempted to gauge the impact and updated our forecasts. We now expect to see the world economy contract this year by 3.1%, before rebounding by 7.2% in 2021. The forecast incorporates a severe recession in the first half … Continue reading “Coronavirus to spark “severe” global recession”

Surprises in European equities

Why have European equities performed so well in 2019 and what are the prospects for 2020? For much of 2019, European equities were an unloved asset class, shunned by investors. At first sight, this was understandable – the region is growing only slowly, wracked by political tensions and wrestling with headwinds in vital sectors such as … Continue reading “Surprises in European equities”

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?”

Investors must get used to an environment of lower growth

We will have to get used to an environment of lower growth. However, this is the kind of environment in which active managers will truly prove their worth. “Nobody buys a farm based on whether they think it’s going to rain next year. They buy it because they think it’s a good investment over 10 … Continue reading “Investors must get used to an environment of lower growth”

Bank of England takes dovish turn, but for how long?

The Bank of England (BoE) left interest rates at 0.75% as expected. However, there was a surprise as two members of the monetary policy committee voted to cut rates. The more dovish1 vote (7-2 rather than the widely expected 9-0) came alongside a downgrade to the bank’s global growth assumptions. Weaker UK growth is also … Continue reading “Bank of England takes dovish turn, but for how long?”

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”

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”

Will the UK economy slip into recession?

Disappointing GDP data shows the UK economy contracted in the second quarter and raises the risk of the country entering a technical recession. The UK economy contracted by 0.2% in the second quarter, following 0.5% growth at the start of the year. What was behind the data? A sharp drop in manufacturing output (-2.3%) over … Continue reading “Will the UK economy slip into recession?”

Unwise to chase the rally in European equities

Although the eurozone economy is struggling, European assets have performed strongly in recent weeks as policymakers at the European Central Bank (ECB) have made it clear that they are ready to implement another round of monetary stimulus. Nevertheless, we remain pessimistic about the eurozone economy’s prospects and sceptical of the ECB’s ability to stimulate growth. … Continue reading “Unwise to chase the rally in European equities”

Tough times for the UK may force rate cut

The UK economy is struggling to stay above water. Brexit uncertainty has hit confidence, causing many companies to postpone or cancel investment projects. Even households are now cutting back. According to the latest survey from the British Retail Consortium, average sales growth weakened to just 0.6% in the 12 months to June, which is the … Continue reading “Tough times for the UK may force rate cut”

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”

May resignation raises UK recession risk

Prime Minister Theresa May has now announced her resignation, stepping down on 7 June. This will trigger a Conservative Party leadership contest, the winner of which would also become prime minister. May’s resignation follows the end of Brexit talks with the opposition Labour Party, which officially concluded without agreement. At this stage, bookmakers have the … Continue reading “May resignation raises UK recession risk”

Creating a virtuous circle in residential investing

How do we balance effective residential investing with being sensitive to tenants’ needs and to climate change? With the right approach, they can be far more harmonious that you might think. In fact, we would argue that they are intrinsically linked. Using change as a lens We have identified four global forces for change that … Continue reading “Creating a virtuous circle in residential investing”