News: 30 May 2022
Equity markets enjoyed a much better time of things last week. It was overdue. The American markets had fallen for seven consecutive weeks and a bounce of some sorts was in the offing.
News: 23 May 2022
This tells us a great deal about the composition of indices and very little about the wider performance of equities. Equity indices are typically weighted according to the size of their components: the largest companies make the greatest contribution to the performance of the index.
News: 16 May 2022
There is though just the outside possibility that everyone is excessively gloomy. The strong majority of companies, in all walks of the economy, that we speak with or listen to are reporting that trading is pretty good. Certain parts of retail are struggling, especially in the UK, but beyond this business activity strikes us as being good.
News: 09 May 2022
So, all else being equal, inflation rates will fall in probably 12 to 18 months’ time. Unfortunately the road from here to there is going to be bumpy. On Wednesday this week, we get to see the latest calculation of US inflation. As is habitual, the ‘consensus’ is that the headline rate will fall, this time from 8.5% to 8.1%.
News: 25 April 2022
Our statement of the obvious is that markets are going to stay volatile. Today is a very red day. There will be better ones. Trying to guess which is which from week to week, or month to month, will almost certainly result in more bad decisions than good ones. It is time to retain focus on how to invest in times of rising prices and we reiterate the merits of patiently holding companies with proven pricing power and high barriers to entry.
News: 05 April 2022
Solving a problem like manifest inflation is a tough one. Central banks will do what they can by moving rates higher, but the cost of refinancing debts means this approach has only limited scope. Corporate innovation should again prove to be an ally.
News: 22 March 2022
More broadly, are ESG (environmental, social and governance) concerns simply going out the window at the current time? Are investors losing interest when there are more pressing concerns elsewhere?
News: 14 March 2022
Central bankers have a very difficult job on their hands. The market has priced in several rate hikes and pressure is mounting to turn to a tightening cycle with inflation running out of hand. But with an ongoing war and fears of slowing down the economy, it feels as if they are trapped between a rock and a hard place.
News: 07 March 2022
The coming days and weeks are going to be uncomfortable. In particular, we are most concerned about how the situation around Kyiv will evolve. Central Banks are likely to tread very softly around their treatment of inflation, with their primary aim now to keep capital markets liquid and open.
News: 28 February 2022
Today is one of those few occasions when reporting on financial markets takes a degree of gravitas beyond the usual daily wheeler-dealering of the trading floors. It is also a reminder that extreme events can and do happen. Of all the possible scenarios that have been building over the early weeks of 2022, a full scale Russian invasion of Ukraine was the least likely. But the Devon Loch of European politics has unfolded in front of our eyes.
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