Vincent Juvyns and Alex Dryden discuss economic growth in the eurozone and the potential impacts of the slowdown in China and other emerging markets.
Assessing the impact and possible evolution of Fed policy
The economic backdrop in 2019 has been characterized by weakness in manufacturing being offset by the resilience of services and health of the consumer.
Markets have bounced back nicely in 2019 after a volatile December due to concerns of rising rates, peak economic and earnings growth and geopolitical tensions.
The yield curve inversion, has become a trusted signal of impending economic turmoil due to the close historical relationship between inversions and recessions.
The growing amount of negative yielding debt overseas is weighing down on U.S yields as Treasuries become the best house in a bad neighborhood.
Over the last decade, investors have been incentivized to “hunt for yield” in riskier asset classes by unorthodox monetary policy, which sucked the yield out of traditional “safe havens”.
At its July meeting, the U.S Federal Reserve (the Fed) cut rates for the first time since December 2008.
The current earnings season has been mixed; lower energy prices and a stronger dollar are headwinds, but health care sector M&A is providing an offset.
Trade was the hot topic of 2018, with the U.S. administration engaging in negotiations with many major trading partners.