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
Global Markets Update Trump’s tax tweaks don’t alter our cautious view of US equities President Trump’s latest proposal for tax reform does not provide us with a reason to alter our forecast that the S&P 500 will end this year lower than it is now, as margins are squeezed by rising... 27th April 2017 · 1 min read
Global Markets Update After “taper tantrum”, is “reinvestment rage” next? The US Treasury market has shrugged off the news in the latest FOMC minutes that the Committee may begin to alter its reinvestment policy later this year. Nonetheless, we still expect a reduction in... 6th April 2017 · 1 min read
Global Markets Update New forecasts for bonds and currencies We have revised some of our forecasts for developed market government bonds and exchange rates to take account of current market levels and our latest thinking on monetary policy. We now project a... 4th April 2017 · 1 min read
Global Markets Update Should investors be reassured by confident US consumers? Yesterday’s surge in the Conference Board’s index of US consumer confidence to a 16-year high of 125.6 is not, in our view, a reason to be positive about the outlook for the stock market. Our end-2017... 29th March 2017 · 1 min read
