Global Markets Update The intangible aspect of stock market valuation According to the Federal Reserve’s Flow of Funds Accounts published last Friday, the market value of the equity issued by US non-financial companies at the end of H1 2011 was almost identical to the... 21st September 2011 · 1 min read
Global Markets Update How stressed out is the euro-zone banking sector? Thursday’s pledge by the European Central Bank (alongside similar commitments from the Bank of England, Bank of Japan and Swiss National Bank) that it will offer 3m US dollar funding over year-end... 17th September 2011 · 1 min read
Global Markets Update New market forecasts – even lower Treasury yields ahead We have reviewed our projections for currency, government bond and stock markets. The new market numbers are presented in the table on the next page. There are two main changes. First, we are revising... 14th September 2011 · 1 min read
Global Markets Update What would QE3 mean for the markets? On Friday, Ben Bernanke will discuss the prospects for the US economy at the Federal Reserve Bank of Kansas City’s annual economic symposium in Jackson Hole. The Fed Chairman used the 2010 symposium... 24th August 2011 · 1 min read
Global Markets Update TIPS close to a tipping point? The yield on US Treasury Inflation Protected Securities (TIPS) is close to zero for bonds maturing in ten years’ time and negative for those with a shorter remaining life. This presumably reflects a... 20th August 2011 · 1 min read
Global Markets Update Does rising credit risk pose a threat to Bunds? The cost of insuring against a default by the German government for five years has nearly doubled since early July and now exceeds the cost of insuring against a default by the UK government for the... 18th August 2011 · 1 min read
Global Markets Update What next for emerging market markets? In the wake of recent revisions to our end-2011 forecasts for developed market (DM) equities and bonds (see our Global Markets Updates, “How much further could the US stock market fall?” and... 12th August 2011 · 1 min read
Global Markets Update Prospects for the other major developed stock markets All the major developed stock markets have taken a battering in recent weeks. On Tuesday, we revised our long-standing, end-2011 forecast for the US S&P 500 from 1,200 to 1,000. Today, we are lowering... 11th August 2011 · 1 min read
Global Markets Update US Treasury yields could fall even further The yield on 10-year US Treasuries temporarily plunged below 2.1% after Tuesday’s FOMC statement, before rebounding to around 2.25%. The last time the yield was so low was in early 2009 when the S&P... 11th August 2011 · 1 min read
Global Markets Update How much further could the US stock market fall? The S&P 500 has now fallen 17% since its high on 21st July, and plummeted through our long-standing end-2011 forecast of 1,200. If the economic slowdown turns into a recession, we think the index... 10th August 2011 · 1 min read
US Economics Update Loss of US AAA rating shouldn't be a complete disaster The news that S&P finally pulled the trigger by cutting America's long-term credit rating from AAA to AA+ will surely rock the financial markets when they open on Monday. But any spike in Treasury... 6th August 2011 · 1 min read
Global Markets Update Essential points on the US debt crisis The US debt crisis will clearly dominate the agenda in the coming week, so it is worth summarising and expanding on the points we have made so far. In short, we continue to think that the Federal... 30th July 2011 · 1 min read
Global Markets Update What would a US downgrade mean for the dollar? The dollar is initially likely to weaken further if the US loses its AAA credit rating. But we would still expect the US currency to rebound and end the year higher against the euro, sterling and yen. 29th July 2011 · 1 min read
US Economics Update What if the US defaults? We still think that the US government is unlikely to default on its debt. But if it did, the implications would potentially be far more serious than those that would follow a one or two notch... 26th July 2011 · 1 min read
US Economics Update What if the US loses its AAA rating? A downgrade of US government debt would not necessarily be disastrous for Treasuries or the dollar, at least once the dust settled. However, it would be the starkest warning yet that the fall-out from... 23rd July 2011 · 1 min read
Global Markets Update What next for the Swiss franc? Most of the world’s major “paper” currencies have fallen out of favour. But the Swiss franc is an exception to the rule. It has even outperformed gold since the start of the year. We expect the upward... 20th July 2011 · 1 min read
