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”

Which stockmarket sectors have performed best over two decades?

We look at which UK stockmarket sectors could have grown your money the most over the last 20 years, and what their valuations are telling us now. When the stockmarket rises and falls the sectors within it can move very differently, especially in the short-term. Perhaps the best example was the dotcom boom and bust, … Continue reading “Which stockmarket sectors have performed best over two decades?”

Consumers under pressure as UK inflation continues to rise

More bad news for UK households. The annual rate of consumer price index (CPI) inflation rose from 2.3% in March to 2.7% in April – higher than consensus estimates of 2.6%. Meanwhile, the retail price index (RPI) measure of inflation jumped from 3.1% to 3.5% over the same period, also slightly higher than consensus expectations. … Continue reading “Consumers under pressure as UK inflation continues to rise”

Trump’s first 100 days: how markets have performed

Is the “Trump bump” over? The surge in the stockmarket, the dollar and bond yields that welcomed Donald Trump’s arrival at the White House has shown signs of flagging as his first 100 days approaches. Donald Trump sailed into the White House on a wave of populist, pro-trade polices. He promised to spend big, create … Continue reading “Trump’s first 100 days: how markets have performed”

The case for ending negative rates early

Few interventions in history of central banking have been as dramatic as the European Central Bank’s (ECB) expansion of its balance sheet to over €4tn to support the eurozone. The strengthening economic recovery in the eurozone and pickup in inflation mean the debate on how to make an elegant exit from its emergency measures is … Continue reading “The case for ending negative rates early”

Is populism good for markets?

Populist policies appear good for markets, given the performance of equities following the Brexit and Donald Trump votes. However, we would note that the conditions for a rally (dovish signals from the Federal Reserve (Fed) and signs of a global recovery) were already falling into place last summer, before either of these two events took … Continue reading “Is populism good for markets?”

After the FTSE 100’s 37% return, should I still invest?

The FTSE 100 has soared in the past year and reached a new all-time high. Is the UK stock market still good value? The rise in the FTSE 100 since a low last February has been remarkable. The index was up 33% between 11 February 2016 and mid-January 2017. Including dividends, the index returned 37%. … Continue reading “After the FTSE 100’s 37% return, should I still invest?”

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”

Five things I learned at Davos

Populism, automation, regime changes, future forecasting and long-term investing – Huw van Steenis, Global Head of Strategy, shares his perspectives from the 2017 World Economic Forum meeting. The mood at Davos was the most divergent in years. Some American bosses were notably bullish about accelerating economic growth and a regime change in fiscal, regulatory and … Continue reading “Five things I learned at Davos”