Will it be smooth sailing for markets until the end of the year?

Schroders Keith Wade & Aymeric Forest look at whether equities can sustain their stellar run in view of the coming reduction in central bank liquidity, geopolitical tensions, currency moves and stretched valuations? Equities underpinned by solid synchronised global growth The global economy is on a firm and synchronised upward trajectory, which is increasingly industrial-led and underpinned … Continue reading “Will it be smooth sailing for markets until the end of the year?”

The rise of China’s technology giants

Baidu, Alibaba and Tencent have rewarded investors’ faith in them. But how have they come to dominate the online economy in China?  When little-known Chinese online gaming and messaging company Tencent decided to list in Hong Kong back in June 2004, its shares were offered at HK$ 3.70 apiece. Fast-forward 13 years to the present … Continue reading “The rise of China’s technology giants”

With the German election over, it’s time to focus on Europe’s growth opportunities

As expected, Angela Merkel has emerged as the victor in the German elections with her centre-right CDU/CSU bloc winning 33% of Sunday’s vote. The centre-left SPD took 20.5% and has said it will go into opposition. The dominant parties in Germany remain pro-EU although the far-right AfD won a higher-than-expected 12.6% of the vote. Negotiations … Continue reading “With the German election over, it’s time to focus on Europe’s growth opportunities”

Markets shrug at May’s Florence speech

Theresa May’s speech confirmed that the UK is seeking a transition period but gave few further details on the final shape of Brexit. Investors had hoped that Prime Minister Theresa May’s Florence speech would be the factor that pushed Brexit negotiations forward. However, the speech was a slightly softer version of her Lancaster House speech … Continue reading “Markets shrug at May’s Florence speech”

Draghi stalls for time on QE details

The European Central Bank’s (ECB) Governing Council decided to keep interest rates unchanged at their meeting on 7th September.  Importantly, it did not provide any details on the future of its quantitative easing (QE) programme, which is due to end in December. The ECB has typically announced changes in its QE programme three months ahead … Continue reading “Draghi stalls for time on QE details”

How will central bank tightening affect emerging market bonds?

Investors are worried; they’re hearing noises from the US Federal Reserve and the European Central Bank about reducing balance sheets and hiking rates. They are wondering whether that will have an impact on emerging markets and on Asian bonds. In the past, they’ve been right to worry. Generally, when central banks start tightening, it does … Continue reading “How will central bank tightening affect emerging market bonds?”

How to invest in times of political change

The last few years have thrown up a series of political surprises. Rank outsiders overturning the odds have become so normal that equity markets have learnt to brace for impact and as a result, those impacts have become more muted. Political leaders and commentators appear to have accepted that old rules may not hold even … Continue reading “How to invest in times of political change”

Progress of Europe’s banks may mark a turning point

We crave turning points.  As we mark five years since European Central Bank (ECB) President Mario Draghi’s “whatever it takes” speech — which crushed government and corporate bond spreads and contributed towards an 80% rally in eurozone stocks — are we on the cusp of another inflection? The eurozone has just enjoyed its best quarter … Continue reading “Progress of Europe’s banks may mark a turning point”

Fed leaves rates on hold and balance sheet reduction is coming soon

No surprises from the US Federal Reserve (Fed) with interest rates being left unchanged at the meeting last Wednesday. The statement contained some tweaks in wording with job gains now upgraded to “solid” and inflation is noted as “running below 2%”. Meanwhile, balance sheet reduction (the unwinding of quantitative easing) is now expected to take … Continue reading “Fed leaves rates on hold and balance sheet reduction is coming soon”

UK GDP growth remains sluggish

Latest figures from the Office for National Statistics show the UK economy saw a small pick-up in GDP growth, but the overall environment remains sluggish. The preliminary estimate shows second quarter GDP growth at 0.3% compared to 0.2% in the first quarter, and matching consensus expectations. To put the recent growth figures into context, the … Continue reading “UK GDP growth remains sluggish”

Chinese growth beats forecasts but looks set to slow

Chinese growth once again surpassed expectations in the second quarter, growing 6.9% year-on-year (y/y), unchanged from the first quarter. This should ease fears over the ongoing credit tightening in China, though we still expect a growth impact to come through in the second half of this year. Manufacturing growth accelerates A key contributor to the … Continue reading “Chinese growth beats forecasts but looks set to slow”

Global liquidity and emerging markets

Emerging markets have benefited from an extremely accommodative environment but global liquidity conditions are becoming less easy than they used to be. Today we find ourselves in a world where central banks are reviewing their unconventional stimulus measures. The European Central Bank (ECB) is discussing tapering quantitative easing (QE) while the Federal Reserve (Fed) is … Continue reading “Global liquidity and emerging markets”

Brexit: One year on

On the first anniversary of the historic vote to leave the European Union, a panel of Schroders’ experts look at the impact the referendum has had on the UK from an economic, fixed income and equity perspective.  When the result of the UK’s EU referendum confirmed that the UK had voted to leave, markets were … Continue reading “Brexit: One year on”

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”