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In contrast to their relatively strong performance over the last decade, we expect financials in the US to fare worse in general than their counterparts in the euro-zone and the UK next year. … US financials unlikely to keep outperforming in …
10th December 2018
Despite the fact that it has already fallen a long way, we think that the MSCI Emerging Markets (EM) Index will drop by another 10-15% by the end of next year. This is partly because we expect earnings growth to slow markedly in 2019. … Why earnings are …
We think that this week’s turbulence provides a reasonable guide to the trends to watch for in markets next year. In particular, while both the S&P 500 and US Treasury yields have started to drop a little sooner than we had previously anticipated, we …
7th December 2018
While 2018 has been a very difficult year for “long-only” investors to make money from anything , 2019 may be a bit less challenging. Our view is that US government bonds will offer some reward next year. … In search of a return … from …
This report is only available as a PDF. Click to download. … Fed still on track for a December rate hike …
This report is only available as a PDF. Click to download. … Flattening yield curve a worry, despite possible distortions …
6th December 2018
Worries about the prospects for the US economy have contributed to the ongoing flattening of the US Treasury yield curve and the sell-off in the S&P 500. We think that both those trends will continue in 2019, as growth there does indeed slow sharply. … …
5th December 2018
This report is only available as a PDF. Click to download. … US financials likely to remain under pressure …
This report is only available as a PDF. Click to download. … Inverted yield curve a warning sign for the S&P 500 …
4th December 2018
This report is only available as a PDF. Click to download. … Hit to the dollar from trade optimism likely to fade …
3rd December 2018
This report is only available as a PDF. Click to download. … Bund yields likely to rebound, even if Treasury yields fall further …
30th November 2018
Frontier market dollar debt markets have been rattled in recent months. Part of this is due to the fall in oil prices, which helps to explain the widening of spreads in Venezuela and Nigeria. But that’s not the whole story. Investors seem to be …
There’s an air of optimism in markets about the meeting between Presidents Trump and Xi at the G20 this weekend, where trade will be top of the agenda. An agreement between the two leaders might temporarily ease tensions. But it would be highly unlikely …
29th November 2018
While doubts have been raised over whether the Japanese yen remains a safe haven in light of its poor performance in the summer, we think that the currency will retain this status for the foreseeable future. … The yen’s days as a safe haven are probably …
This report is only available as a PDF. Click to download. … We still expect Treasury yields to fall even further next year …
This report is only available as a PDF. Click to download. … Outperformance of Chinese equities likely to prove fleeting …
28th November 2018
Although Italian government bonds (BTPs) are already trading like “junk”, we think that their credit spread will rise even further next year for several reasons. … Italian BTPs will probably continue to trade like …
This report is only available as a PDF. Click to download. … Treasury yields likely to fall much further in 2019 …
27th November 2018
The recent pick-up in US corporate credit spreads is more than just a response to the slump in oil prices over the past couple of months. We think that it also reflects worries about the outlook for the global economy, which are likely to intensify next …
26th November 2018
This report is only available as a PDF. Click to download. … Outlook for EM equities poor, but not because of oil prices …
While the 10% drop in the S&P 500 since early October can be partly blamed on plunging oil prices and concerns about global demand, it also seems to reflect justified fears about the US economic outlook. … What the S&P’s slump tells us about the US …
This report is only available as a PDF. Click to download. … Any relief from a possible Trump-Xi deal is unlikely to last long …
23rd November 2018
This report is only available as a PDF. Click to download. … More broad-based EM currency weakness on the cards …
22nd November 2018
We think that the performance of UK financial assets would be varied in the event of a no deal Brexit, which has become increasing likely given the recent political chaos in Westminster. … No deal Brexit would be a mixed bag for UK …
This report is only available as a PDF. Click to download. … Cyclical stocks will probably keep living up to their name …
21st November 2018
This report is only available as a PDF. Click to download. … More trouble on the way for the beleaguered IT sector …
20th November 2018
Italian government bonds are now trading like “junk”, but we think that the spread between the yields of 10-year BTPs and German Bunds will increase even more in 2019 as Italy’s problems escalate and the US economy slows. … Italy’s now-junk credit spread …
This report is only available as a PDF. Click to download. … Treasury rally is probably a sign of things to come in 2019 …
19th November 2018
This report is only available as a PDF. Click to download. … A Brexit blueprint for UK equities …
16th November 2018
This report is only available as a PDF. Click to download. … Trying to make sense of another day of Brexit chaos …
15th November 2018
A reassessment of the prospects for interest rates will probably play a far bigger role than the Fed’s quantitative tightening (QT) in influencing Treasuries next year. Indeed, we expect the 10-year yield to fall back to 2.5% after the Fed stops hiking …
We think that equities in the euro-zone will be caught in the crossfire of a stock market sell-off in the US next year, as the economy there slows. Our forecast is for the S&P 500 to fall by 14% in 2019 and we don’t think that equities in the euro-zone …
This report is only available as a PDF. Click to download. … Oil price unlikely to be a key driver of financial assets in 2019 …
14th November 2018
Although the MSCI Emerging Markets (EM) Index has recovered a little in the past couple of weeks, it is still below its level a month ago, and we suspect that it will fall much further by the end of next year. … EM equities likely to remain on the …
This report is only available as a PDF. Click to download. … Euro likely to recover in 2019, despite Italy’s problems …
13th November 2018
This report is only available as a PDF. Click to download. … Rebound in sterling still most likely next year …
12th November 2018
We expect the stock market in Japan to come under more fire in 2019, as equity prices tumble in the US; the yen strengthens; and the Trump administration continues to exert pressure on China. Our forecast is that the Nikkei 225 will end next year at …
This report is only available as a PDF. Click to download. … What to make of another bleak week for EM equities …
9th November 2018
We think that the global economy will slow in 2019 and take a toll on equities generally. If history is any guide, Swiss stocks will not be spared. But two factors suggest that they will hold up better than most. … Swiss stock market likely to fall less …
This report is only available as a PDF. Click to download. … Fed, not Congress, setting the agenda for Treasuries …
8th November 2018
This report is only available as a PDF. Click to download. … Post-US election rebound in European equities unlikely to last …
7th November 2018
The big rise in the real yields of US Treasury Inflation Protected Securities (TIPS) over the past year or so is a logical response to tighter Fed policy than investors were expecting. But it is likely to be partly reversed in 2019, when the central bank …
We don’t expect today’s midterm elections in the US to have a major bearing on its stock market, even if the Republicans retain both chambers of Congress or the Democrats do very well. … US midterms unlikely to trigger a big market …
6th November 2018
This report is only available as a PDF. Click to download. … What if the prediction markets are wrong about the US midterms? …
This report is only available as a PDF. Click to download. … Shareholders’ concerns about higher Treasury yields make sense …
5th November 2018
This report is only available as a PDF. Click to download. … Strong US employment report bolsters case for December hike …
2nd November 2018
Although the gap between the valuations of equities in emerging and developed markets has widened recently, and is now quite large by historical standards, this is no guarantee that the former will outperform over the next year or so. … Short-term pain, …
Although Italy’s problems are likely to continue to weigh on the euro next year, we still think that the currency will strengthen against the dollar in response to a favourable shift in monetary policy. … Italy’s problems shouldn’t stop euro’s revival in …
This report is only available as a PDF. Click to download. … Rates likely to rise faster than markets expect after a Brexit deal …
1st November 2018
Although some of things that triggered a rebound in the US dollar in October are likely to continue to underpin the currency in 2019, we still think that it will weaken then as the Fed stops raising rates sooner than investors are anticipating in response …
