Mon 14 Oct 2019
Global stocks gained throughout the week in local terms, however they fell in Sterling terms after the Pound rallied on news of a potential “pathway” to a Brexit deal. Global stocks fell -1.5% in Sterling terms, with the decline led by weak performance from US and Japanese equities; US stocks fell -2.0%, while Japanese stocks fell -2.7%. UK and European stocks gained +1.4% and +0.4% respectively. Globally, the worst performing sector was Utilities; unsurprisingly given its bond-proxy nature as yields rose. Materials and Financials posted strong gains in local currency terms, driven partly by a steeper yield curve. Bond yields closed the week higher after signs of progress on a US-China trade deal; President Trump has agreed to suspend the planned tariff hikes for now, and China has agreed to buy more US farm products. The US 10 year yield traded 20.0bps higher, closing the week at 1.729%. In a similar manner, UK 10 year yields climbed 26.2bps and closed the week over 0.7%. Gold fell -1.0% in US Dollar terms whilst oil gained +3.6%.
Last week’s rout became this week’s rebound, ostensibly due to renewed hopes of a trade deal between the US and China. The larger picture is one of a sideways trading market, where central bank dovishness provides a floor, supporting “buying any dip” strategies, whilst a deteriorating earnings and macro backdrop – only partly due to the trade wars – puts a ceiling on equity indices. Share prices are expected to move in this narrow corridor, unless some catalyst takes them out of their rut. Meanwhile, in bond land, prices remain extremely high. Last week Greece joined the club of countries who borrow at a negative yield, in essence getting paid to borrow money. While this reflects partly the market’s belief that the country will no longer be excluded from the ECB’s QE, it is also indicative of the relentless chase for capital gains in the fixed income market. Yet, despite the obvious exuberance, this may not be a traditional bubble, since it is supported by central banks, not average investors. Finally, some daylight broke in the Brexit fog, as Leo Vardakar and Boris Johnson appear to be closer to a deal. It is becoming, however, obvious that concessions in N. Ireland may be the price for Brexit.
George Lagarias, Chief Economist
Read our full Market Update Week 45 Market Update Global stocks rose +0.8% in local currency terms and +2.1% in Sterling terms in yet another positive week for risk assets. Meanwhile yields rose sharply and Gold had its worst week in three years as there was a flight from defensive assets. In Sterling terms US […]
Read our full Market Update Week 43 Market Update Global stocks were up in both local currency and Sterling terms last week, however due to a fall in the currency versus other major currencies, Sterling-based investors enjoyed a greater gain; global equities were up +2.1% in Sterling terms and +1.3% in local terms. US stocks […]
Read our full Market Update Week 40 Global stock markets fell throughout the week, both in local currency terms and Sterling terms. UK assets led the decline, down -3.5% on the news of weaker economic data out from the services industry. US stocks were down up -0.4% in Sterling terms, with similar returns observed in local […]
Please read our full Market Update Market Update Stocks posted mixed returns last week, with strong performance in the US as the NASDAQ 100 set new record highs, while UK and Japanese stocks closed down -0.9% and -1.8% in Sterling terms respectively. Emerging Market stocks performed well, gaining +2.4% for the week. Technology, Telecoms and […]
Read our full Market Update Week 8 Market Update Fears that COVID-19 could weigh on consumption and global growth increased last week as the number of cases spiked in both Iran and Italy. Concerns that the virus could impact critical global supply chains have increased, with tech titan Apple widening their earnings estimates given the […]
Read our full Market Update Market Update Global stocks were up +0.8% last week, recovering part of the losses observed after the US-Iran conflict sent investors fleeing from risk assets; tensions have however faded slightly, and it appears that a solution may be reached that does not involve further military intervention. The best performing region […]
Read our full Monthly Market Update June 2018 May, a month of European volatility Global stocks were mixed last month. A combination of slower global growth, negative trade news and political volatility in Italy and Spain weighed with investors, many of whom chose to reduce their risk levels from more volatile regions. Performance was greatly affected […]
Read our full Market Update Market Update Stock markets rebounded last week, posting gains in both local currency and Sterling terms, with news that the Fed will be expanding its corporate bond buying programme sending stocks higher. The move from ETF purchases to individual bond issues by the Fed has been viewed as a significant […]
Read our full Market Update Market Update Stock markets closed down last week on the back of a COVID-19 case count resurgence. Growth stocks outperformed value stocks as fears of a second wave of the virus caused market participants to raise their expectations of a second lockdown. Banking stocks were particularly volatile as news that […]
Read our full Market Update Market Update Global equities traded higher last week, up +0.5% in Sterling terms. US equities climbed +0.9% with housebuilders, buoyed by promising housing data, leading the way. Other developed markets did not fare as well. UK and European stocks were down -1.3% and -1.1% respectively, driven by both the negative […]
Read our full Market Update Stock markets ended their losing streak with many major indices posting their largest daily gains since 1933, or indeed for many on record, on the Tuesday of last week. Reasons for the rally include investors rebalancing multi-asset portfolios, short positions being covered and the US fiscal strategy offering downside protection […]
Read our full Market Update Week 11 Market Update UK equities were down over 8% this morning, with the FTSE 100 down -32% over the last month as markets are now starting to price in a coronavirus induced global recession. Oil prices continued to slip, down nearly 50% YTD in USD terms. This fall has […]
Please check out our full Market Update Week 10 Market Update UK equities were down nearly 9% this morning, with the natural resource and banking heavy indices experiencing weakness for three prime reasons. First, coronavirus fears continued to rise as Italy quarantined 16 million residents, with investors fearful of this impact on the global economy […]
Global stocks were down -0.4% in local currency terms last week, however returns for UK investors were +0.3% after Sterling depreciated versus major global currencies, down -0.5% and -0.3% versus the US Dollar and the Euro respectively. US, UK and European stocks returned +0.3%, +0.4% and -0.3% over the week, whilst Emerging Markets equities posted […]
Following a flat third quarter, global equities rallied to the end of the year with the MSCI World index up over 7% in local currency terms. Returns for unhedged Sterling based investors were broadly flat as the Pound strengthened following the Conservative’s decisive general election victory. The late final rally was primarily driven by renewed optimism for a ‘phase one’ trade deal between the US and China, and left global equities up 25% for the year. It is of course important to note that, by contrast, markets ended 2018 in very pessimistic mood as the Fed continued to raise interest rates, and therefore a global equity return figure of around 8% from September 2018 is a more useful measure of equity returns.
Market Update Major developed market equities gained in Sterling terms this week, due in large part to currency effects. Many of these indices actually fell in local currency. UK equities grew by +1.1% led by utilities and healthcare sectors. US stocks were up +0.4% in Sterling terms but had fallen -1.0% in local currency, this […]
Read our full Market Update Week 6 Market Update Global stocks saw strong gains last week, returning +2.7% in local currency terms and +5.0% in Sterling terms after the Pound depreciated versus most major currencies. The rally was driven by hopes that coronavirus fears had been overstated and US earnings coming in ahead of expectations. […]
Read our full Market Upate Week 43 Market Update Global stocks continued to slide this week, with US stocks leading indices lower, the S&P 500 falling -2.2% in Sterling terms. The NASDAQ lost -3% due to disappointing results from Tech companies and a drop in the Consumer Discretionary sector following a disappointing sales outlook from […]
Read our full MWM Investment Newsletter Winter 2020 Following a flat third quarter, global equities rallied to the end of the year with the MSCI World index up over 7%. Returns for unhedged Sterling based investors were broadly flat as the Pound strengthened following the Conservatives’ decisive general election victory. The late final rally was […]
Read our full Market Update Week 41 Market Update Global indices suffered significant falls last week, down -4.1% in local terms and -4.5% in Sterling terms. US equities led the weak performance, experiencing their biggest losses in 8 months on Wednesday. Technology stocks were particularly affected as market participants reacted badly to rising bond yields. […]
UK assets continue to trade at a discount to the rest of the world, however, with so much political uncertainty facing the UK this may be justified. Boris Johnson’s new special adviser Dominic Cummings is by all means unorthodox. Mr. Cummings was the Campaign Director for Vote Leave in 2016, and used machine learning and data […]
Markets rallied throughout last week, however US equities closed lower on Friday and down -1.6% in Sterling terms for the week, with other regions following suit this morning, on concerns that tensions between the US and China could escalate due to accusations from the US administration over the origins of the Coronavirus. For the week, […]
Read our full Market Update Market Update Sterling rallied last week after the Conservative Party won 365 seats in the UK general election, securing a majority of over 80. The Pound was up +1.5% vs the US Dollar and +0.9% vs the Euro, with the result being that although global stocks were up in local […]
Market Update This week saw mixed equity returns, with global stocks down -0.3% in Sterling terms. Emerging Markets posted a strong gain of +1.3%, which was supported by the Sterling depreciation observed across the period, while US stocks were down -0.7% for the week. Japanese equities fell -0.8% in local currency, however, the GBP/JPY rate […]
Read our full Market Update Market Update A second straight week of strong performance for Sterling, up +1.7% vs the US Dollar and +1.2% vs the Euro as markets further priced in a Conservative victory at the coming General Election, once again mean that although global stocks were up in local terms, UK investors experienced […]
Currencies have historically been extremely volatile, and predicting FX movements is recognised as a very difficult and risky strategy. Exchange rates move on several, often unpredictable, macro-economic factors, including differences in interest rates or inflation, geopolitics or due to government intervention such as capital controls. Many funds have exposure to currency risk from investing in […]
Read our full Market Update Market Update Global stocks posted strong gains last week, up +1.3% in local currency terms and +3.7% in Sterling terms after the Pound depreciated versus other major currencies. Sterling fell shortly after the UK general election when Boris Johnson signalled the UK will leave the EU with or without a […]
It seems we should all be taking on debt. After all, about 30% of the global tradeable universe of bonds is negatively yielding, amounting to around $16.7trn. With bonds that are negatively yielding, holding to maturity guarantees a loss, at least in nominal terms. In other words, it seems you are being paid to borrow. […]
Read our full Market Update Week 36 Market Update Global stocks were up last week, gaining +1.9% in local terms and +0.9% in Sterling terms as the Pound appreciated after the House of Lords passed a bill giving parliament the power to, in theory, prevent a no-deal Brexit. In addition to this, the Prime Minister […]
Read our full Market Update Week 37 Market Update Global stocks were down -0.2% last week in Sterling terms and up +1.3% in local currency terms as Sterling appreciated versus other major currencies as Boris Johnson adopted a softer stance on the Irish border; increasing the likelihood of a deal being reached before the October […]
A positive week for equities saw all major equity markets close the week positive in local currency terms. With Sterling continuing its bullish start to the year this pushed EM equities down to a flat week in Sterling terms. US equities rose +2.0% in Sterling terms, hitting record highs. US equities were helped by falling bond yields, from Tuesday, which helped boost equity investor sentiment. UK equities rose +2.1%. Globally the best performing sector was consumer discretionary, whilst telecoms was the worst performing. Japanese equities rose +1.5%, erasing their losses year-to-date. The US 10Y yield continued its rise, although more modestly, up 5.9 bps to 1.6%, while the UK 10Y rose 6.6bps to 0.8%, reversing last week’s fall. Gold rose +0.8% on the week. Oil fell, after last week’s strong rise, down -1.4% on the week to $65.8. Oil is up +32.6% on the year, highlighting the extent to which vaccination programmes are increasing forecasters’ outlooks for economic activity later this year.
Markets had a strong run last week with all major equity markets posting gains in both local and GBP terms, except for Japan which suffered a loss in Sterling. The market seems to have fully rebounded following the sell–off at the beginning of February, with the Nasdaq back at a record high. US equities led […]
Read our Monthly Market Update February saw the return of volatility for stocks after nearly two years, as a confluence of catalysts affected equity markets: US Bond yields breaking critical levels above 2.55%, a new more hawkish and uncertain Fed, the deterioration of the global trade climate and renewed political uncertainty in Europe and the UK. […]
Both US equities and the US Dollar fell last week when multinational companies such as Boeing were hit as Donald Trump sought to impose new tariffs on China, pressing China to cut its trade surplus with the US by $10bn. As a result, there is an increased likelihood of a trade war between the worlds […]
Donald Trump’s announcement of around $60bn of tariffs against China due to intellectual property violations saw markets experience large losses, as participants feared an escalating trade war. China is expected to hit back with levies aimed at industries and states where Mr Trump’s supporters are concentrated. Equity falls came despite Congress agreeing a $1.3tn spending […]
With the continued escalation of threats of tariffs between the US and China, markets suffered another week of negative returns. Global equities were down -1.0% in Sterling terms, dragged lower by US equities which returned -1.8%. Emerging Market and Japanese equities also suffered, down -1.1% and -1.0% respectively. European equities were relatively unscathed with a […]
Read our Monthly Market Update After February ended a run of 11 consecutive months of positive, less volatile returns for equities, March saw risk assets continue to suffer as US bond yields peaked near 3% and fears of a global trade war came closer to fruition, with President Trump placing tariffs on Chinese imports of steel […]
Please read the full article here: In the current investment climate where central bank activity and algorithmic trading strategies are two primary driving forces of asset prices, enabling rapid losses and even faster gains as momentum funds then push winners higher and losers lower, we are reminded how important it is to follow a long […]
Please read our full Market Update Market Update Stock markets closed up last week, with the technology-heavy NASDAQ 100 even reaching an all-time high. Cyclical sectors such as Oil and Financials lagged as economic conditions remain weak and second wave fears continue to build, with increased use of local lockdowns. The rally in risk assets […]
Read our full Market Update Market Update The rally in risk assets came to a grinding halt last week on fears of a second wave of infections in the US, with virus rates up in many states, and the Federal Reserve offering up a gloomy economic outlook. Stocks are also down this morning on news […]
Read our full Monthly Market Update Following two months of negative returns for risk assets, equities rallied in April as trade war fears were downplayed and positive earnings, especially in the US, continued to come through. The month was also notable in that markets sold off over fears of an escalation of the Syria conflict, […]
Read our full Market Update Week 50 Market Update Last week the main driver for UK investor returns was the weakness in Sterling, which fell -1.1% vs USD and -0.5% vs EUR. The majority of the drop came on Friday as Theresa May’s inability to win concessions from the EU created further uncertainty about the future […]
Check out our new article on recession risk and thoughts on asset allocation: Is it time again for another crash? The US economy, the engine of global growth, has been expanding for 121 months, a historical record. As investors peer into the future, a case of acrophobia (fear of the extremes) is taking hold. “We […]
Read our full Market Update Week 49 Market Update US equities sold off significantly last week, down -4.4% in Sterling terms, as trade war concerns weighed on American stocks, erasing the gains made in the previous week. Global equities were down -3.5% in Sterling terms, with all sectors apart from utilities experiencing negative returns. Emerging Market […]
Read our full Market Update Week 47 Market Update Equities fell across the globe last week, with the US suffering the largest decline as technology mega-caps sold off. Facebook is down over 25% year-to-date, suffering from both idiosyncratic factors, such as an ageing user base and political scandals, and sector specific issues such as regulation. Emerging […]
We are at an inflection point. Technological innovation drives our economy, and ultimately, our standard of living. From rail roads to the Internet, technological progress has pushed our productivity levels to new heights, and we are now on the brink of the next step of this evolution. Artificial Intelligence. Once just the topic of sci-fi […]
Read our full Market Update Week 33 Market Update Returns were mixed for equities in local terms as, aside from US equities which made a +0.7% return, all major regions fell. Similarly in Sterling all markets were down bar US and global equities which gained +0.8% and +0.1% respectively. Both European and Japanese markets returned […]
Read our full Market Update Week 46 Market Update Global stocks continued their rebound this week, with both Global and European equities up +0.3%. Emerging Market equities led the pack, returning +2.5% as the slide in oil prices gave a boost to emerging market currencies. UK Stocks were hit by further Brexit volatility, hardest hit stocks […]
New Update! Monday 19 November 2018 After Friday’s dramatic cabinet session, which saw a third Brexit Secretary, Dominic Raab and Work & Pensions Secretary Esther McVeigh resign, there are several possible options on the table: 1) The deal might still go through parliament. Although divisions in the conservative party are high and it is unlikely that other […]
Read our full Market Update Week 45 Market Update US stocks continued their rebound this week, with energy and financials sectors up +1.4% and +1.5%, while the tech sector suffered as Amazon and Apple saw big falls. General Electric also fell to it lowest level since the GFC. Emerging Market equities were down -2.4% in Sterling […]
Read our full Market Update Week 34 Market Update Last week and Monday was a positive period for risk assets, with global stocks returning +0.7%. EM equities gained the most, up +3.2% in Sterling terms and 4.6% in local terms, buoyed by Donald Trump’s announcement that he is prepared to resume talks with China (although […]
Read our full Market Update Week 32 Market Update As the pound continued its decline into last week, in local terms equity markets fell across the board aside from UK equities which made a +0.6% return. In Sterling all markets were up bar European equities, with US and global equities gaining the most with +1.9% […]
Read our full Monthly Blueprint July 2018 Month In Review On the face of it, June has not been an exciting month for risk assets. Developed market stocks ended the month roughly in the same place as they started it, while long bond yields were little changed. However, beginning and end figures mask not only […]
Read our full Market Update Week 25 Market Update Global stocks turned negative last week following two weeks of positive performance. Emerging Market equities were the worst hit, falling -2.0% in Sterling terms, as rising trade war fears also weighed on global equities, which were down -0.7%. Japan was also badly hit due to its […]
Why geopolitics now matter more In the past few years, investors and economies have grown somewhat insensitive to geopolitical surprises. Brexit, for example, did not cause the massive initial shock to either the economy or the stock markets that many analysts had predicted. Neither did Mr. Trump, whose election has sent stocks soaring by more […]
Read our full Market Update Week 17 Market Update Global equity markets were flat to positive in local terms last week, however a large sell-off in Sterling due to fading expectations for a rate hike at the next MPC meeting in May meant that returns were positive for UK investors. Global equities returned 1.6%, US […]
Markets were volatile last week due to the possibility of air strikes on Syria, however opened slightly up on Monday morning after the US took action over the weekend. Equity markets were positive across the board in local terms last week, however Emerging Market and Japanese equities posted losses in GBP terms as the Pound […]
Markets continued their recent rocky period, with two separate events causing unease for investors. The first was Jay Powell’s first congressional testimony on Tuesday where he hinted at a faster pace of interest rate rises and stated a preference for rules based interest rate decisions. For example the Taylor Rule proscribes an interest rate for […]
The market sell-off at the start of February was largely attributed to fears of rising interest rates in the US, with concerns that planned increases in fiscal stimulus to an already strong economy meant the Fed was getting behind the curve. Last week various members of the FOMC, although notably not the Chair Jay Powell, […]
Over the last month global equity markets have sold off; since the 15th of January the MSCI AC World Index has fallen -4.12%, the S&P 500 -4.22% and the Japanese Nikkei -6.0%. The UK market similarly has tumbled with the FTSE 100 plummeting -6.36% over the last 4 weeks1. With stocks cheaper compared to a […]
Despite a brief panic on Wednesday when US inflation figures came in higher than expected, stoking fears of accelerated interest rate rises, markets had a strong week across the board following 2 weeks of significant market weakness. US markets were up 4.4% in USD terms, however weakness in the currency meant the return in Sterling […]
Read our Monthly Market Update Global equity markets were positive again, registering a 5.3% performance in January, benefiting from the positive sentiment and the passing of the US tax reform at the end of 2017. The macroeconomic environment was less supportive, however, as some key indicators suggested that global economic momentum was slowing down in […]
Market Analysis This week saw strong equity market returns, with global stocks up +2.0% in Sterling terms. US equities were up +2.6% for the week, with returns enhanced by Sterling depreciation versus the US Dollar and earnings outperformance from both Google and Starbucks. UK, European and Japanese equities were up +0.6%, +1.1%, and +0.5% respectively. […]
Stock indices in most developed market regions rebounded strongly after Monday’s acute sell off amid fears of Evergrande’s default - global stocks were up +0.7% in GBP terms. EU stocks were up +1.7% despite business activity losing steam, while US stocks rose +1.0% after recording their biggest daily drop since May 12th, on Monday. UK stocks rose by +1.0% as the BoE announced that rates will be unchanged; however holding a more hawkish stance. Globally, Energy stocks continued their upward trend posting solid gains of +4.0% followed by financials, IT and consumer discretionary. The US 10Y Treasury yield was up 8.9bps finishing the week at 1.453%, while the UK 10Y yield was up 7.4bps reaching 0.922%. Sterling fell by -0.4% and -0.3% against the USD and the Euro respectively. In US Dollar terms gold rose by +0.2%, while oil was up by +3.4%.
In the past weeks we saw markets react negatively to fresh tariffs on China. However, it is more likely that traders were simply responding to the Federal Reserve’s attempts to maintain its independence against the US President by taking a more staunch view on the cost of money. The Fed’s independence might just be an […]
Market Update Most major equity market indices ended the year on a positive note. Global stocks gained +0.2% in Sterling terms over the last two weeks of trading to close the year up +12.4% in Sterling terms. Over the year, due in large part to a Tech rally following the early pandemic crisis, US stocks […]
Equities saw a third straight week of strong returns, with Japan the only region experiencing losses in Sterling terms (down -1.6%), although it was also positive in local terms (up +3.1%). US ADP National Employment figures showed fewer job losses, causing an initial spike in equities, which continued later in the week as it was […]
In the past few weeks, we have been experiencing a flurry of better-than-expected economic data, especially in the US, while global equities remained near the recent high levels they have been trading at for almost a month. A casual read of the situation could be that the markets had run ahead of themselves, and as […]
A quarterly report is not normally a difficult document to put together. Usually it consists of an account of the trending state of affairs, the more possible outcomes and risks to those outcomes. In the past few years, these reports were actually made easier. The US Federal Reserve was underwriting risk at such an unprecedented scale, nearly unwavering for more than a decade, in a manner which suppressed all major hazards to the economy and financial markets. Ever since 2010 the question, repeatedly, had been: “With opportunity costs driven down so much for so long, whatever can bring markets down?”
Read our full Market Update Market Update US equities climbed +1.4% last week with, major indices setting new record highs, as US Federal Reserve Chairman Jerome Powell announced a shift in how the Fed views inflation, saying it won’t increase interest rates to respond to low unemployment levels and also won’t worry as much about […]
Market Update Like clockwork positive vaccine news, this time FDA confirmation of Pfizer/BioNTech results, buoyed markets in the early part of last week. However some of these gains were reversed due to the worsening condition of both Brexit and Covid-19 cases. UK equities were flat for the week, however more domestically exposed mid-caps fell as […]
Market Update A generally positive week for equities in local currency terms was slightly negative in Sterling terms as markets became increasingly optimistic about a UK trade deal with the EU, sending the Pound higher. UK equities were the notable exception for the week, though down only -0.1%. Overall, global stocks gained +1.7% in local […]
Banning the President of the United States from Twitter might have come as a relief for some, but not for Jack Dorsey, the founder and CEO of Twitter itself. In a series of posts he acknowledged that the move has opened a particular can of worms he was previously keen on keeping shut. The discussion […]
Hopes for a COVID-19 vaccine saw equity markets rally across the board last week, with global stocks up +2.8% in Sterling terms and +3.2% in local terms. EU equities led the way in Sterling terms, up +4.1%, with UK equities also experiencing strong returns of +3.4%. US equities gained +2.8%, although Emerging Market equities were […]
A significant rise in US Treasury yields unsettled markets last week. US equities fell -1.9% in Sterling terms, with Tech stocks suffering their worst week in nearly six months. UK equities fell -1.9%, with Energy and Financials the only two positive sectors for the week. Emerging Markets suffered the greatest sell-off, having led global equity markets so far this year. UK and Emerging Markets are the only major equity markets still positive for the year in Sterling terms. Globally the only positive sector was Energy which was supported by rising oil prices. Investors will keep a keen eye on the OPEC+ meeting this week for any indication of increased oil supply. Japanese equities fell -2.4% in Sterling terms, the worst performing region year-to-date for UK investors. The US 10Y yield continued its rise, up 6.9 bps to 1.4%, at one point hitting 1.6%, and the UK 10Y rose 12.2 bps to 0.8%. Long-term yields are now trading at their highest level since the pandemic. Gold fell -2.3% on the week, while Oil rose +4.4% to $62.7.
Markets returned to positive territory this week, supported in part by progress on the Biden stimulus bill. However, chair of the Federal Reserve Jerome Powell’s speech, with a lack of updates to current policy, disappointed investors leading to a sell-off on Thursday afternoon. US equities rose +1.7% in Sterling terms. UK equities rose +2.5%, with UK equity markets benefiting from rising oil prices. Emerging Markets grew +0.9% in Sterling terms, although this was a more moderate +0.1% in local currency terms. Globally the best performing sector was Energy, whilst IT was the worst performing, as the rising yield environment impacted valuations. Japanese equities rose +1.0%. The US 10Y yield continued its rise, up 16.1 bps to 1.6%, while the UK 10Y fell 6.4bps to 0.8%. Gold fell -1.1% on the week. Oil rose sharply, up +8.4% on the week to $66.5 following the OPEC meeting where it was decided to hold production at current levels, when a rise in production had been anticipated.
Equity market gains early last week were, broadly speaking, eroded as bond yields continued to rise, reaching one-year highs. Amid falling oil prices and rising political uncertainty caused by potential bans on vaccine exports coming out of the EU, many major equity markets fell last week. US equities fell -0.5% from record highs in Sterling terms, despite the country surpassing 100 million vaccinations on Friday. UK equities fell -0.7%, now down -2.4% from their 52-week highs in January. Globally the best performing sector was healthcare, whilst energy, due to oil prices, was the worst performing. Japanese equities rose +3.6% and are the best performing major equity markets this year. The US 10Y yield continued its rise up 9.6bps to 1.7%, while the UK 10Y rose 1.6bps to 0.8%. Gold rose +1.3% on the week. Oil has seen back-to-back weekly declines, down -6.1% to $61.2 a barrel, due to a glut of supply and weakening demand forecasts.
While it remains to be seen how long value leadership will last, many of the drivers that led investors to flock to growth stocks have reversed and now favour value stocks.
Market Update Global equities rallied last week, with US equities leading the way, up +1.4% in Sterling terms, boosted by 87% of US firms beating earnings expectations. European equities were up a similar amount in local terms, however up only +0.4% in Sterling terms. UK equities were up +0.2%, however Japanese equities fell -1.3%. With […]
US, UK and European equities were relatively unchanged in Sterling terms last week, faring -0.1%, +0.1% and -0.1% respectively, amid concerns that the rate of global growth could start decelerating. Japanese equities were up +4.0% despite the resignation of Prime Minister Yoshihide Suga, while emerging market equities were up +2.7%, positive for a second week in a row after the Chinese tech sector had fallen significantly in previous weeks. Globally, stocks were up +0.3%, with energy and financials being the only sectors exhibiting losses. The US 10Y Treasury yield was down -1.5bps finishing the week at 1.322%. The German 10Y Bund yield was up +6.2bps amid higher than expected inflation in the euro area. Sterling was up +0.8% against the US Dollar and unchanged relative to the Euro. In US Dollar terms gold lost -0.1%, while oil prices rose slightly by +0.1%.
For a second week in a row it was green across the board for equities, as global stocks gained +2.4% in Sterling terms and +3.7% in local terms. European stocks were amongst the best performers for a second week, with Japanese equities performing equally well. Early in the week markets focused on the US returning […]
Equity markets sold off across the board last week, declining initially amid fears of a secondary wave of infections and a pessimistic outlook from the Fed, although there was a sharp recovery later in the week on additional stimulus expectations. In local terms global equities fell -2.5%. However due to Sterling weakness, in part due […]
Read our Full Market Update Week 34 Market Analysis Last week equities continued to decline, both in local and Sterling terms. Emerging Markets led the decline, falling -1.5% in Sterling terms. US, UK and Japanese stocks fell -0.9%, -0.2% and -0.9% respectively. European stocks were flat in Sterling terms. Globally, the best performing sectors were […]
Read our Full Quarterly Outlook The Power of the Cycle John Kenneth Galbraith, an irreverent but brilliant economist best known for his work on the Great Crash of 1929, famously lamented about his own profession: “the only function of economic forecasting is to make astrology look respectable”. As always, we toyed with the idea that […]
Charles Darwin gave us the theory of evolution. The species most adept to change survives. This model applies not just to organisms but to economies and businesses. In fact, so ubiquitous is the analogy between business and hunting and survival dynamics the language we use to describe ordinary business processes and transactions often stem from […]
Market Update Global stocks rose +0.7% in local currency terms, which translated into a -0.4% fall in Sterling terms. Returns were mixed in local terms, however were universally down in Sterling term as the currency rose +1.0% vs the US Dollar to just short of the $1.30 mark. Emerging Markets had a challenging week falling […]
Markets welcomed signs of an easing in geopolitical tensions in October, with risk assets generally outperforming traditional safe havens. The US and Chinese authorities moved closer to agreeing a partial deal on trade, while the UK once again edged back from the precipice of a no-deal Brexit. Global central banks reiterated their dovish stances and […]
Global stocks were down -1.1% in Sterling terms last week amid fears of momentum fading and growth concerns due to the persistence of supply chain issues. Japanese stocks were the only region to post gains, rising by +3.8% in Sterling terms, buoyed by news of prime minister Suga stepping down and expectations of further stimulus. UK, US and European equities were all down -1.5% driven by inflation concerns and uncertainty about the economic outlook. Globally, all sectors exhibited losses apart from consumer discretionary. The US 10Y Treasury yields were up 1.7bps, finishing the week at 1.343%. German 10Y Bund yields were up +2.6bps to -0.332% after the ECB announced it would reduce the pace of its pandemic asset purchasing programme. Sterling fell against the US Dollar by -0.2% and rose by +0.4% vs the Euro. In US Dollar terms gold lost -2.1%, while oil was up by +0.7%.
The election tomorrow is somewhat of a paradox. On the one hand, it has been dubbed “The most important election in decades”, one that can “shape the next generation”. On the other hand, however, it offers little visibility when it comes to UK portfolios. Strange as it may seem, both statements might hold true. Throughout […]
Read our full Market Update Market Update Risk assets gained last week on the signing of the ‘phase 1’ trade deal between the US and China. Global stocks were up +1.9% in Sterling terms and +1.6% in local terms, reaching greater all-time highs. Returns for Sterling investors were pushed higher as the Pound fell on […]
This is a multi-level chess game, touching politics, intelligence and trade, and a move in each field directly affects the other two.
Equity markets continued to steadily recover last week, with all regions positive or flat in Sterling terms and only Emerging Market Equities down in local terms. Markets have been reacting positively to the gradual opening up of economies across the world, even with some signs that the Coronavirus is re-emerging in areas such as Wuhan […]
Read our full Monthly Market Update February 2020 The month in review: Coronavirus fears weigh on equity markets Despite a positive start to the year, January was a negative month for risk assets. Earnings marginally outperformed expectations in the US, with Amazon and Apple rallying on stronger than expected revenue growth and J.P. Morgan posting […]
Since 2018, a key concern of financial markets has been the increasing trade tensions between the United States and China, more commonly referred to as the ‘trade war’. With delays and failed negotiations lasting over a year, markets finally breathed a sigh of relief on the 15th of January, as the US President Donald Trump […]
Download our Full Market Update here Market Update Global stocks saw a sharp sell-off last week after COVID-19 cases spiked in Italy, Iran and South Korea, pushing recession fears higher and expected corporate earnings lower for 2020. Global stocks fell -9.4% in Sterling terms, with US equities experiencing the quickest correction since the Great Depression, […]
By regular standards it was a rocky week for equities, which rallied 2-3% in the first few days, but fell 4-5% later on. However in comparison to preceding weeks market moves were somewhat muted, perhaps because the news-flow has provided little further clarity as to the time-scale and magnitude of the COVID-19 crisis – markets […]
Last week (Friday 3 to Monday 13 April) global stocks rose on the back of an improved narrative regarding the Coronavirus pandemic, as markets see a ‘flattening of the curves’ and a reduced pace of new infections, while many countries weigh reopening their economies. Boris Johnson’s survival helped improve the narrative both for the UK […]
Aside from UK equities, major equity market regions were positive in local currencies, boosted on Friday by reports that suggested a drug had shown positive results against COVID-19 in a clinical trial, as well as some relaxing, both planned and enacted, of restrictions in several countries. Sterling strength meant that some returns for UK investors […]
Last week saw a 3.5% pullback for global equity markets, the first since 2016. One reason is a deterioration in global economic data. The second factor is the Federal Reserve, who’s stronger language on inflation and growth, driven by the corporate tax cuts, has made investors realise that its consensus opinion of 2 rate hikes […]
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