Global Markets Update Markets may fear uncertainty more than they like Romney The conventional wisdom is that investors prefer Republican Presidents, but we would suggest that every election is different. Romney’s plans would tax equities more favourably and lighten the burden... 5th November 2012 · 1 min read
Global Markets Update What does the future hold for US Treasuries? Although we think the yield on 10-year Treasuries will fall back soon from almost its highest level in five months, the medium-term prospects for bonds are far from rosy. Indeed, we think the average... 19th October 2012 · 1 min read
Global Markets Update Don't bank on stock market gains once earnings start to fall The US Q2 earnings season kicks off today. The news is likely to be downbeat, with the annual growth rate of profits reportedly expected to be negative for the first time since 2009. In recent months... 9th October 2012 · 1 min read
Global Markets Update Does the ECB have a strong case for buying Spanish bonds? If Spain applied to the EFSF/ESM for a (partial) sovereign bail-out, the path would become clear for the ECB to buy Spanish government bonds under its Outright Monetary Transmissions (OMT) programme... 8th October 2012 · 1 min read
Global Markets Update Euro-zone break-up risk – what’s in the market? Tensions in the euro-zone have recently eased. However, we still anticipate that Greece and one or two other small countries will leave in due course. While we are not alone – a slim majority expects... 25th September 2012 · 1 min read
Global Markets Update How stretched are US stock market valuations? The US Flow of Funds report published yesterday by the Federal Reserve suggests that the stock market remains significantly overvalued by historical standards. We doubt that equities are as far... 21st September 2012 · 1 min read
Global Markets Update China’s smaller savings surplus little threat to Treasuries One popular misconception is that China’s reinvestment of its “surplus” savings has directly depressed long-term US Treasury yields. If this were true, why have yields remained so low in recent years... 6th September 2012 · 1 min read
Global Markets Update Cost control boosts US corporate profits One of the salient features of the US economy since the official end of the Great Recession has been the strength of corporate profits. Nonetheless, we are sceptical that it will last. 30th August 2012 · 1 min read
Global Markets Update Has the US stock market fully discounted QE3? We expect any boost to equity prices from the announcement of a third round of quantitative easing (QE3) by the Fed to be much less significant than those that followed the first two rounds. 29th August 2012 · 1 min read
Global Markets Update The market implications of QE3 The US Fed looks set to launch QE3 soon, but a third injection of the same medicine is unlikely to be anywhere near as effective as the first two in supporting the prices of equities or commodities... 23rd August 2012 · 1 min read
Global Markets Update US Treasuries – lessons from Japan? A messy break-up of the euro-zone could see the yield on 10-year US Treasuries hit a new low. But the US does not appear set for a long period of deflation. Any crisis-driven decline in the yield... 13th August 2012 · 1 min read
Global Markets Update What next after five years of credit crunch? Tomorrow marks the five year anniversary of the unofficial onset of the global credit crunch. For investors, the past half decade has been characterised by a very healthy US Treasury market, a... 8th August 2012 · 1 min read
Global Markets Update Bounce in the euro likely to prove temporary The euro touched its highest level against the dollar in over a month on Monday, as the exchange rate temporarily climbed above $1.24. Yet we doubt it will be long before Europe’s single currency... 6th August 2012 · 1 min read
Global Markets Update Could nominal bond yields fall even further below zero? The emergence of negative yields on some short-dated government bonds raises the question of whether they could fall even further. We suspect the answer is yes, at least in those European countries... 27th July 2012 · 1 min read
Global Markets Update Little respite in sight for the euro The euro’s slide against the dollar is unlikely to end any time soon. Admittedly, the exchange rate is already at a two year low. But an escalation of the euro-zone crisis and a deep recession should... 9th July 2012 · 1 min read
Global Markets Update Sluggish corporate earnings to weigh on the US stock market The Q2 earnings season kicks off in the US next week. The story that is likely to emerge is one of slower profit growth. And looking further ahead, the news is likely to get worse. This is a key... 4th July 2012 · 1 min read
