Looking back at the markets through June

A selection of articles looking back through the markets last month. Brexit: no further forward   Global market review The third anniversary of the Brexit referendum came and went in June, and still the issue of Brexit remained up in the air. As the clock ticked towards the extended deadline of 31 October, the Conservative … Continue reading “Looking back at the markets through June”

Are profits no longer required?

The number of loss-making companies listing on the US stock exchange is approaching a 30-year high, according to new research. Indeed, the average company going through an IPO is now making a loss (IPO stands for initial public offering, the term used when a private company goes public by listing on the stock market). Perhaps … Continue reading “Are profits no longer required?”

Mr Trump’s torrent of trade tweets

Financial markets are being buffeted by President Trump’s tweets on trade. What are the short and long-term implications of this new style of policy making in the US? Tactical tweeting Since the summer of last year, investors have had to look at Twitter far more often. President Trump has used this form of social media … Continue reading “Mr Trump’s torrent of trade tweets”

Looking back at the markets through May

Although the US and China had been widely expected to agree a trade deal, US President Donald Trump instead confounded hopes by announcing that tariffs on over US$200 billion-worth of imports from China would increase from 10% to 25%.  In response, China raised tariffs on US$60 billion-worth of US goods. Share prices fell heavily in … Continue reading “Looking back at the markets through May”

Still on our way in May, watching for winners

Investing is a curious mixture of art and science. It is a world of phenomenally fast algorithmic trading, supplemented with old-fashioned sayings and adages concocted decades ago. Behavioural finance studies draw attention to the importance of ‘heuristics’. These are mental shortcuts or rules of thumb that ease the cognitive load in decision-making. The saying “sell … Continue reading “Still on our way in May, watching for winners”

Germany will pay the price for Italy’s provocation of Trump

The Italians have joined China’s controversial “New Silk Road” programme, a move that is likely to stoke the ire of Washington. At the weekend, Italian populists handed Donald Trump yet another reason to turn his trade guns on Europe, increasing the risk of a German recession. At a signing ceremony in Rome, Chinese President Xi … Continue reading “Germany will pay the price for Italy’s provocation of Trump”

Car crash in the motor industry?

Last year was not a good year for the world motor industry. Passenger car sales fell by 13% in the USA, by 9% in the UK, by 4% in China, by 3% in France and by 0.2% in Germany. In the USA higher interest rates reduced people’s willingness to take out car loans. In China … Continue reading “Car crash in the motor industry?”

G20 stare down does not de-escalate tensions

It would be easy to see last weekend’s G20 meeting a heralding a thaw in the US-China trade war. But it hasn’t. There are some positives. It looks increasingly likely that the US will not put in place a fresh 10-25% tariff hike in January on $250bn of Chinese exports, as most had thought. It … Continue reading “G20 stare down does not de-escalate tensions”

Trade deal leaves considerable uncertainty

President Trump decided to sit down with President Xi after all at the G20 Summit in Argentina. He had blown hot and cold about whether it was worthwhile to do so, and had threatened to carry on with his increases in tariffs on Chinese goods ahead of the meeting. Markets should be growing used to … Continue reading “Trade deal leaves considerable uncertainty”

Fear not – volatility is normal

After the long period of rather calm markets in 2016-17, we predicted that from 2018 onwards, we would see a return towards more normal levels of market volatility. Swings up and down in share prices – even big moves – are normal behaviour for markets. The upside from investing in equity markets is the potential … Continue reading “Fear not – volatility is normal”

The Only Game in Town

The US stockmarkets were the only game in town in August. US stockmarkets provided the only positives in August posting another month of strong gains due to robust economic news-flow.  However, all other major global regions showed negative returns, with geopolitical issues and trade war concerns weighing on investor sentiment. The overall result was a … Continue reading “The Only Game in Town”

Growth to slow as trade wars escalate

As a deeper and more prolonged trade war is anticipated between the US and China, we have downgraded our global growth expectations and forecast slower growth in both 2018 and 2019. Much of the slowdown can be attributed to the effect of trade wars. Europe and Japan disappoint Two of the world’s most export-oriented economies, … Continue reading “Growth to slow as trade wars escalate”

More trade disruption from US sanctions on Iran

There has been plenty of attention to the way the EU is caught in the crossfire of the US trade dispute with China. We also need to remember that the EU also stands to lose from the US wider dispute with Iran. The EU exported $10.8bn to Iran last year and is worried that US … Continue reading “More trade disruption from US sanctions on Iran”

Is the road to inflation taking us back to the 1960s?

The 1960s are remembered for radical social reform, political upheaval and war. Often forgotten is that they were also a time of rising inflation – and in this they may hold disquieting lessons for us today.   One of our key calls for 2018 is that consumer price inflation in the US will become an … Continue reading “Is the road to inflation taking us back to the 1960s?”