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The Bank of England (BoE) delivered an early festive surprise for sterling markets as they increased the Bank Rate by 15 basis points (bps) to 0.25% at its December Monetary Policy Committee (MPC) meeting.
The Bank of England (BoE) defied market expectations for a rate hike as they left the Bank Rate unchanged at 0.1% and maintained total target of asset purchases at GBP 895 billion. The deferred hike means no immediate respite to ultra-low sterling yields, although further interest rate volatility is likely; investors should consider maintaining a disciplined approach to cash investment and segmentation.
The RBA announced its first tentative step towards tapering and eventual policy normalization.
At its monthly policy meeting in June, the ECB revised its growth and inflation forecasts upwards, but confirmed its “very accommodative monetary policy stance”.
At the latest Bank of England (BoE) monetary policy meeting, the Monetary Policy Committee (MPC) significantly upgraded its economic growth, inflation and employment forecasts.
At their latest semi-annual policy meeting, the MAS' comments was modestly upbeat and the central bank revised up their headline inflation target - both of which could have implications for SGD cash investments.
The European Central Bank (ECB) Governing council (GC) decided to “significantly increase” monthly Pandemic Emergency Purchase Program (PEPP) purchases over the second quarter of 2021, based on the recent evolution of financing conditions and inflation outlook.
The Bank of England (BoE) has postponed a decision on negative interest rates for at least six months with the probability of negative rates declining sharply due to the expectation of a strong vaccine-led recovery.
The surprise withdrawal of liquidity by the People’s Bank of China in the last week of January triggered a spike in short-term interest rates. Aidan Shevlin, International Head of Liquidity Fund Management, shared his perspectives on China’s monetary policy.
China’s bond market has seen an unusual wave of defaults over the past month – triggering a jump in credit spreads and raising investor concerns. Find out the implications to cash investments and why independent credit research remains important.
The recent coronavirus (2019-nCoV) outbreak in China has increased investors’ trepidation and financial market uncertainty.
A look at the consequences of reflation for equity markets that are already pricing in plenty of good news.
You have all seen the news articles by now. The short version: Pelosi encouraged House Democrats to pass a bill that Manchin said all along he would not agree to. Read more for our thoughts on the fallout
On equity markets, the Lombards, SPAC investors, Bone-setters, George Washington, COVID bots and Omicron
Some things just cannot be talked about. So in this year’s Thanksgiving piece, I wrote about something else.
In this Eye on the Market: early signs of goods bottlenecks easing; the more persistent issue of US labor shortages; the US, Taiwan, China, treaty changes and semiconductor capacity; and an update on the most over-indebted US states
The global supply chain mess will require increased vaccination and acquired immunity, semiconductor capacity expansion and the end of extraordinary housing/labor supports to resolve. A close look at some very anomalous charts on shipping, semiconductors, inventories, labor shortages, foreclosures and mortality.
Greetings students. We look forward to seeing you back on campus. Your Fall 2021 syllabus is attached. Syllabus update: Biology BI66 “The Origins of COVID” has been cancelled until further notice.
Topics: if people avoided SPACs instead of avoiding COVID vaccines, the US would be both wealthier and closer to herd immunity. An update on our SPAC analysis from last February, and a look at the strange mathematical paradox that ends up understating some critical COVID vaccine efficacy data.
Red Med Redemption: A visual depiction of politics, ideology, vaccine resistance and the Delta variant. Other topics: US economic recovery update, and big tech reliance on acquisitions to fuel growth at a time of rising anti-trust enforcement. We conclude with a new “Investor Odds & Ends” section that covers NYC hotel/office markets and possible changes in personal, corporate and international tax rates.
COVID and the Delta variant; the Fed as firefighter and arsonist; US-China economic divorce picks up steam; and the pig-snake inflation timetable (how long until we know if there’s a permanent wage/price rise).
Every two years, we take a close look at the performance of the private equity industry given its rising share of institutional and individual portfolios. Our findings this year: the private equity industry is still outperforming public equity, but this outperformance narrowed as all markets benefit from non-stop monetary and fiscal stimulus, and as private equity acquisition multiples rise. We examine manager dispersion, benchmarks, co-investing, GP-led secondary funds, the torrid pace of industry fundraising and manager fees in this year’s piece.
An investor’s look at China’s recovery, the Sinopharm vaccine and the importance of scientific methods
Our February and March Eye on the Market pieces discussed shrinking US excess capacity, fiscal stimulus and the contortions people gyrate into to convince themselves that rising inflation would not be a problem for equity markets. My conclusion at the time: expectations for permanently low inflation and rates drove the rise in P/E multiples in recent years, so a reversal in inflation and rate expectations poses a risk to them. Since March, US equity markets hit a plateau as inflation expectations reached their highest levels in a decade. This Eye on the Market addresses questions we’re receiving on markets, inflation, rates and capital gains taxes, and concludes with comments on COVID and India.
Even as the world becomes more energy efficient each year, overall levels of CO2 emissions continue to rise. Without decarbonization shock treatment, humans will be wedded to fossil fuels for longer than they would like.
Topics: Biden goes for broke on growth, driving coincident and leading indicators to all-time highs; the Value recovery and where it goes from here; COVID herd immunity, the path to normalcy and rising concerns about thrombosis risks from vector vaccines.
The Smalligarchy: how the narrowest political margins in decades could deliver one of the biggest taxation and spending increases in the post-war era; a discussion of the investment implications of physical and human infrastructure bills; the US economy approaches lift off; and the latest news on Morone saxatilis.
If long-term US interest rates stay below 2%, that’s a great sign for equity investors. But if they don’t…it’s amazing to see the pretzels that people contort into to convince themselves that rising rates are not a problem for equities. Also: an early look at the Zoom shock on commercial and residential real estate, and the diverging COVID trends in the US vs Europe.
Short stories on the global recovery, plummeting COVID infections, Larry Summers & the bond market, SPAC sponsors, renewable energy, the Texas power outage and the battle for the Republican Party.
The SPAC capital raising boom, and why Biden’s early stage energy policies are more likely to increase oil imports rather than reduce emissions.
The election as referendum on America: how well does the “system” work, and for whom?
The cost of engineering a US recovery as the world waits for a vaccine; Biden agenda on taxes/spending; Tech stocks (2020 vs 1999); COVID and The Fountainhead; US election rules, dates and process in light of derogatory comments on mail-in voting by the President and Attorney General
The US recovery; The flood of money and market returns; Globalization lives; Reducing COVID mortality through vascular treatments; Realistic timetables for never-been-done before vaccines; Sweden’s COVID experiment is not what you think
Tracking the rebirth of the US consumer with real time data as a function of infection levels and state policy. Additional topics: no evidence yet of material second waves of COVID infection, and a round-up of the latest news on vaccine trials (Moderna, Oxford, Sinovac) and anticoagulants.
In this week’s Eye on the Market, we review topics from our recent client Zoom calls. Topics include: risk of inflation, second waves of infection, the effectiveness of lockdowns and Biden’s taxation and spending agenda.
An update on the COVID-19 crisis as the US prepares to reopen despite having one of the highest infection rates in the world. Additional topics: monoclonal antibodies and anti-viral trials; the growing gap between markets and the economy; S&P 500 earnings haves and have-nots; regional equity performance (Europe loses again) and leveraged loans at a time of rising bankruptcies.
In this week’s note, we discuss the latest news on US infection trends and reopening plans, Remdesivir trial results and whether US fiscal stimulus is “enough”.
Lockdown relaxation and economic reawakening…are we there yet?
In this week's note, we take a close look at country and regional virus data, and examine the pitfalls of over-extrapolating trends that often reverse.
After the equity rally, P/E multiples are back at around 16x 2021 consensus earnings.
Virus trends and head-fakes, convalescent plasma and U.S. vs. China lockdowns.
There are things the government can try and fix during a pandemic and other things which it can't.
There are some difficult days ahead as quarantines and lockdowns grow. I want to share something with you from John Stuart Mill as we head into the unknown.
Michael Cembalest, Chairman of Market and Investment Strategy, has compiled his extensive research on coronavirus.
A lot of data is being made available on the coronavirus, but most of it requires careful analysis before drawing conclusions.
Confounding almost every forecast we saw last week, Senator Biden appears to have emerged from Super Tuesday with a sizeable delegate lead. Why might the night have turned out so differently from what was expected just a few days ago?
A Coronavirus update: severity, consequences and implications for investors.
Answers to questions on the coronavirus, US megacap stocks, the cost of Democratic Healthcare plans, the Iowa caucus and the problem with the student loan system.
Consensus reactions to the Phase I US-China deal are very skeptical, but may be missing the broader point. A brief note on what happened, and the alternatives.
After a very positive year for investors in 2019, we expect lower positive returns on financial assets in 2020 as some Ghosts of Christmas Past reappear.
How a discussion about China and Hong Kong morphed into a chart war about Trump, Hoover, Taft, Rachel Maddow and Anderson Cooper.
While recessions and bear markets are a fact of life, something peculiar happened after the Global Financial Crisis: the rise of the Armageddonists.
A close look at the Progressive Agenda, China’s deteriorating welcome mat in DC and US Tech IPOs.
Michael Cembalest analyzes the performance of over 6,700 domestic and international active equity managers and discusses the challenges they face.
A brief comment on a proposal from leading Presidential candidates to ban hydraulic fracturing everywhere, immediately.
It was a long, hot summer at the Heritage Foundation. An update from the front lines of the Trade War.
Michael went on a search for Democratic Socialism in the real world, and ended up halfway around the globe from where he began.
Michael discusses how he should have taken Trump at his word on tariffs, and the impact of the widening trade war on global growth and equity markets as proposed tariffs approach pre-war levels.
The US-China trade war, prescription drug price legislation and the 2020 election.
Topics: unattainable objectives of the Green New Deal; overview of the world’s decarbonization challenges; Germany’s energy transition; Trump’s War on Science.
Today, there are more job openings than there are unemployed workers. Explore what impact a tight labour market could have on inflation in 2022.
Inflation is standing at record levels across many markets. Explore our framework for tracking the impact of supply chain disruption on inflation in 2022.
There is a lot we don’t know about the latest virus mutation – labelled Omicron. Markets are clearly concerned by the fact that the early studies suggest it is a significant mutation and appears to be considerably more infectious than former strains.
COP26 saw significant announcements in areas such as coal, methane and deforestation, yet progress fell short of the scale required to give us confidence that disruptive climate outcomes can be avoided. Physical climate risks warrant careful consideration for long-term investors.
With UK shares looking cheap, long-term investors may be able to pick up a bargain in the UK stock market this year. Explore our outlook for UK equities.
With the recovery supported by loose monetary and fiscal policy, Global Market Strategist Jai Malhi asks whether the balance of risk has shifted towards higher inflation.
Investing in China the right way is key: with a portfolio of companies, listed both offshore and onshore, with a manager that has a local presence and can do long-term fundamental analysis.
Explore how the fiscal stimulus provided by the EU's pandemic recovery fund could lead to stronger economic growth and boost demand for European assets.
Will this year’s value rally continue, or are growth stocks set to regain the initiative? In our latest On the Minds of Investors article, Global Market Strategist Tilmann Galler examines the basic drivers of value outperformance, and looks at how value stocks may perform in three near-term economic scenarios based on our latest projections.
Could carbon prices be about to rise? Global market strategist Vincent Juvyns looks at the increasing regulatory pressures on carbon pricing, and assesses the potential impact on markets
With Covid cases falling, excess household savings and US fiscal stimulus should provide the fuel for a stellar second half of 2021 for developed economies. But roaring growth could also bring risks.
Governments are aligning behind the goal of achieving net zero emissions by 2050, but dramatic changes to the global economy will be required to get us there. Learn more about the policies and innovations that could pave the way to a carbon-neutral world.
History provides only a limited guide to the implications of ESG factors for returns. We look at the conclusions that can be drawn from the past, and how investors can prepare for the future.
Explore the strategies that can help investors maintain income and diversification in a post-Covid world of low interest rates and negative government bond yields.
The challenge of low government bond yields means investors must rethink the 60:40 stock:bond allocation. Discover where they can turn for diversification.
The spread of the coronavirus and its impact on global economic activity has materially changed the investment outlook for 2020. In this piece we provide a framework for tracking infection rates globally and monitoring the impact on economic activity.
The leader of the European Central Bank (ECB) has become very familiar with the challenge of ‘threading the needle’ in recent years and the test facing Christine Lagarde today was no different.
Rising production and collapsing demand due to the COVID-19 pandemic is causing an unprecedented glut in the oil market. As a result, we are currently witnessing a pronounced supply and demand shock that has sent oil prices to a multi-year low.
The ECB announced measures to cushion the COVID-19 financial shock, but stopped short of cutting rates. All eyes are now on governments for a fiscal response.
The UK’s coordinated monetary and fiscal response to the COVID-19 outbreak is unprecedented.
It is important to avoid trying to predict the future; rather, clients are best served by monitoring the present situation and maintaining composure.
The European Central Bank (ECB) made no changes to its key interest rates, asset purchases and forward guidance and is unlikely to make any changes in the coming months.
