Global Markets Focus Future monetary tightening and the prospects for Treasuries There have been seven major monetary policy tightening cycles in the US since the early 1970s. If these are a useful guide, the ten year Treasury yield will start to rise well before the first... 23rd March 2012 · 1 min read
Global Markets Focus Increasing intangible investment – implications for equity prices If corporate expenditure on intangible assets is treated as investment, rather than as an expense, the US stock market appears much less overvalued than traditional barometers of “fair” value suggest... 1st February 2012 · 1 min read
Global Markets Focus The market fall-out from a Greek default and possible EMU exit Greece is on the cusp of a sovereign default that could still be either “orderly” or “disorderly”. An orderly default would cause less upheaval in the markets, but any respite would probably be... 22nd November 2011 · 1 min read
Global Markets Focus A mid-year review of our big calls This Focus provides an interim report on the calls that we published at the start of the year. We were right to be cautious on the prospects for the global economy and equity markets and to forecast... 14th July 2011 · 1 min read
Global Markets Focus Will emerging markets outperform again? The relative valuations of emerging market equities and bonds are no longer as attractive as they have been in the past. But the fears of overheating and hard landings that have held many back so far... 1st July 2011 · 1 min read
Global Markets Focus Treasury yields have further to fall We continue to expect the 10-year US Treasury yield to hit 2.5% by year-end. Admittedly, the Fed’s second round of quantitative easing (QE2) draws to a close this month, there are concerns that... 18th June 2011 · 1 min read
Global Markets Focus US municipal bonds - the next domino to fall? Investors have become increasingly concerned about the outlook for the $3trn US municipal bond market. Although issuers of US municipal bonds are faced with many challenges, we think investors’ worst... 31st March 2011 · 1 min read
Global Markets Focus What is the outlook for S&P 500 earnings? We expect S&P 500 operating earnings per share (EPS) to increase by nearly 15% this year. While encouraging, such an outcome would come as a disappointment to many investors. According to Bloomberg... 24th May 2010 · 1 min read
Global Markets Focus Gold prices to fall back to $900/oz by year-end Gold prices are struggling again. We do not believe that prices had risen beyond levels that could ever be justified by fundamentals. Nor is it hard to imagine circumstances where they might spike... 25th March 2010 · 1 min read
Global Markets Focus Are markets simply riding a wave of central bank liquidity? We believe the surge in global asset prices owes much more to falling risk premiums associated with a fundamental improvement in the economic outlook than to a wave of liquidity created by central... 26th November 2009 · 1 min read
Global Markets Focus Gold – a new bull market or a bubble about to burst? The new highs seen in recent weeks are unlikely to mark the resumption of the sustained bull market that saw gold prices quadruple between 2001 and 2008. Assuming at least a partial recovery in the... 15th October 2009 · 1 min read
Global Markets Focus How should we forecast the US stock market? The aim of this Focus is to outline our approach to forecasting the aggregate level of the US stock market. 15th May 2009 · 1 min read
Global Markets Focus What does QE mean for government bonds? Quantitative easing (QE) has provided little support for government bonds so far, but regardless of exactly how this policy is implemented we still think that the wider economic and financial... 4th March 2009 · 1 min read
Global Markets Focus What impact has speculation had on commodity prices? Commodity prices across all major classes have experienced three distinct phases: first, a period of prolonged broad price stability, followed by sharp rises in prices, and then sharp falls. Changes... 22nd December 2008 · 1 min read
Global Markets Focus Real yields in a world of deflation Because of the zero bound on nominal interest rates, a period of deflation can result in high and rising real yields. 8th December 2008 · 1 min read
Global Markets Focus How much has speculation driven commodity prices? This piece looks at several aspects of commodity market speculation that are often invoked to support the conventional wisdom which asserts that speculation has not been a driving factor in commodity... 3rd November 2008 · 1 min read
