Global Markets Update Low volatility doesn’t mean EM equities are bound to fall The volatility of the MSCI Emerging Markets (EM) Index has plunged, as the index has climbed steadily to an all-time high in local currency terms. But these developments need not inevitably unwind... 18th July 2017 · 1 min read
Global Markets Update Will euro-zone peripheral bonds shrug off ECB tapering? Government bond yields have risen recently by more in Germany than in some “peripheral” countries of the euro-zone. This has happened even though the sell-off in bonds has been caused by concerns that... 14th July 2017 · 1 min read
Global Markets Update Are US equities actually undervalued? It is two decades since the Fed compared the yields of US government bonds and equities in its semiannual report to Congress, the next instalment of which Janet Yellen will deliver tomorrow. A... 11th July 2017 · 1 min read
Global Markets Update How stretched is the valuation of emerging market equities? The price/earnings ratio of the MSCI Emerging Markets Index has increased to a level that is well above its long-run average. However, in our view, the valuation of the index is not especially high... 7th July 2017 · 1 min read
Global Markets Update Will rising bond yields continue to weigh on equities? We think that this week’s sell-off in government bonds sets the tone for the second half of the year. Nonetheless, we don’t expect a further rise in their yields to prompt a major correction in equity... 30th June 2017 · 1 min read
Global Markets Update Strong growth should continue to support financial equities The failure of two Italian regional lenders over the weekend was a reminder of the vulnerabilities still present in parts of the global financial system. However, the big picture is that the system is... 28th June 2017 · 1 min read
Global Markets Update Is the inclusion of Chinese A-shares in the MSCI a big deal? We are not surprised that stock markets in China have barely risen in response to MSCI’s decision to include the country’s A-shares in its Emerging Markets (EM) Index. Admittedly, the initial... 21st June 2017 · 1 min read
Global Markets Update Is the US stock market bound to hit the skids? Those who claim that the US stock market is bound to hit the skids soon point to the fact that Shiller’s cyclically-adjusted price/earnings ratio is now more than double its long-run average of 14... 16th June 2017 · 1 min read
Global Markets Update Little evidence of a bubble in technology shares Some investors are bound to be feeling nervous after Friday’s near-2.5% drop in the NASDAQ 100, given the rout in technology shares during the bursting of the dot com bubble. However, the technology... 12th June 2017 · 1 min read
Global Markets Update UK political turmoil doesn’t mean market mayhem We doubt that political uncertainty after Thursday’s UK General Election will itself have a big effect on the markets. However, there could be significant moves if the endgame is a Labour-led... 9th June 2017 · 1 min read
Global Markets Update China’s demand for Treasuries unlikely to anchor yields China has started to accumulated foreign exchange reserves again in recent months, having reduced them over the past few years. We expect reserves to continue rising, but doubt that this will weigh on... 7th June 2017 · 1 min read
Global Markets Update Will euro strength put euro-zone equities under pressure? While we expect the euro to strengthen further over our forecast period, we think that equities in the euro-zone will continue to outperform those in the US, where the economic recovery is more mature... 5th June 2017 · 1 min read
Global Markets Update Revising, but not renouncing, our view of US equities We have revised up our end-year forecast for the S&P 500, as the index’s surge to above 2,400 since President Trump was elected has left it well above our previous projection. Nonetheless, for now at... 1st June 2017 · 1 min read
Global Markets Update Is low volatility in the Treasury market a bearish signal? There hasn’t been much action in the Treasury market since yields shot up last November after Donald Trump was elected US president. As is the case for the US stock market, though, low volatility... 24th May 2017 · 1 min read
Global Markets Update Will the hunt for yield soon be over? We think that the hunt for yield will end soon, as the available return on US Treasuries rises in response to tighter Fed policy than investors are anticipating. This probably wouldn’t result in the... 12th May 2017 · 1 min read
Global Markets Update How would markets react to a Macron victory? Investors breathed a sigh of relief after Emmanuel Macron claimed the largest share of the vote in the first round of the French presidential election, and there is scope for a further rally if, as... 5th May 2017 · 1 min read
