Global Economics Update From inflation crisis to financial crisis? Problems at California-based lender Silicon Valley Bank (SVB) have refocussed attention on financial sector risks. In light of this, we are resending a report from last October that provides a... 11th October 2022 · 5 mins read
Asset Allocation Update We don’t expect the relative rout in US REITs to persist Although we think that US equity REITs may have further to fall, we don’t expect them to continue to underperform the broader US stock market. The key reason is that we don’t expect Treasury yields to... 7th October 2022 · 5 mins read
Asset Allocation Update US equities aren’t bound to recover if Treasuries do We think the US stock market will fall further even after Treasury yields drop back, as the equity risk premium rises and expectations for earnings are downgraded amid a deteriorating economic... 7th October 2022 · 3 mins read
Asset Allocation Update Fiscal credibility key for Gilts & sterling Although the latest sell-off in Gilts has been driven in part by expectations for higher interest rates, the accompanying fall in sterling suggests the risk premia attached to UK assets has risen. In... 27th September 2022 · 5 mins read
Asset Allocation Update Three key threats to equities from rising bond yields The surge in bond yields that has accompanied the ratcheting up of rate expectations in the US has soured the outlook for the stock market there in three key ways. First, by raising the required... 23rd September 2022 · 5 mins read
Asset Allocation Update What would a policy shift do for China’s markets? The outlook for China’s economy has deteriorated recently, but it still doesn’t look like the PBOC will ease policy much in response. We suspect that if the central bank were to have a change of heart... 16th September 2022 · 5 mins read
Asset Allocation Update What moves in oil prices might mean for markets The recent decline in oil prices has weighed on some equity market indices and come alongside a decline in US inflation compensation, but we don’t think those moves will unwind much even if, as we... 15th September 2022 · 4 mins read
Global Markets Update The implications of the energy price cap for UK markets Notwithstanding the big policy announcements in the UK this week, we still think that the pound and the UK stock market will struggle over the rest of this year, but expect 10-year Gilts to rally. In... 9th September 2022 · 5 mins read
Global Markets Update Are markets really braced for further volatility? Despite the rise in volatility lately, compensation for risk across several major asset classes still seems quite low relative to history. That means, in our view, that if volatility were to remain... 9th September 2022 · 6 mins read
Asset Allocation Update We see little chance of a GFC-style collapse in US REITs While we think that US REITs have further to fall over the rest of this year, we doubt that they will fare nearly as badly as they did during the Global Financial Crisis (GFC), nor underperform... 30th August 2022 · 5 mins read
Global Markets Update German-Swiss bond yield spread may widen further We expect the spread between the yields of 10-year German and Swiss government bonds to widen further over the remainder of this year. In view of the wider interest, we are also sending this Global... 25th August 2022 · 3 mins read
Asset Allocation Update Weighing up the relative prospects for stock market sectors We think the macroeconomic backdrop that we envisage is consistent with certain “defensive” sectors of the S&P 500 – utilities, healthcare and consumer staples – outperforming over the rest of this... 17th August 2022 · 5 mins read
Global Markets Update Answers to your questions on global markets We held a Drop In yesterday outlining our latest forecasts for global financial markets. This Update answers some questions that we received during that Drop In but didn’t have time to address. In... 10th August 2022 · 4 mins read
Asset Allocation Update Credit spreads and excess returns Although the spreads of many “risky” bonds have risen significantly this year, some aren’t currently at levels that have typically been followed by substantial future outperformance of their “safe”... 9th August 2022 · 3 mins read
Global Markets Update What a Taiwan Strait crisis could mean for markets While China-Taiwan tensions haven’t yet caused ructions in global financial markets, any escalation that threatened to disrupt trade and/or financial flows almost certainly would. This Update explores... 5th August 2022 · 6 mins read
Global Markets Update Reassessing our forecasts for US markets We still expect a higher 10-year Treasury yield, lower S&P 500 and stronger US dollar over the remainder of the year, but have pared back our forecasts for the rise in yields and fall in equities. In... 29th July 2022 · 6 mins read
