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
Global Markets Focus What does history tell us about the outlook for US equities? The prospect of a protracted economic downturn until 2010 at the earliest implies that the upside for US equities is likely to be limited, despite bank recapitalisation. 30th October 2008 · 1 min read
Global Markets Focus Commodity prices have much further to fall We think that oil prices will decline to $80 per barrel in the coming weeks and perhaps as low as $50 in the coming year. Agricultural commodity prices could still drop by as much as a third from... 7th October 2008 · 1 min read
Global Markets Focus The market implications of the US bank bailout The US bank bailout is a necessary but far from sufficient condition for a decent economic recovery. We expect further falls in equity markets and government bond yields. But provided the dollar holds... 29th September 2008 · 1 min read
Global Markets Focus How commodity index funds affect the price of commodities Commodity index funds differ from traditional speculation in commodities in significant ways. These underpin the possibility that such funds are having a material impact on prices. 26th August 2008 · 1 min read
Global Markets Focus Can speculation drive up oil prices without a rise in inventories? Contrary to the conventional wisdom, the absence of a build-up of crude oil inventories does not rule out the possibility that speculation has been helping to drive up oil prices. 23rd July 2008 · 1 min read
Global Markets Focus Oil fundamentals will bring prices back down to earth Speculative pressure can only push oil prices so far before fundamental demand and supply conditions reassert themselves, leading to a potentially sharp correction. We expect (Brent) crude oil prices... 19th March 2008 · 1 min read
Global Markets Focus US corporate profits to fall sharply in 2008 We expect US corporate profits to fall by around 7.5% this year as the impact of the wider economic slowdown more than offsets any boost to earnings from the weaker dollar. This is not yet fully... 10th January 2008 · 1 min read
