Category: Market Update
Market Update: Bond yield volatility has markets guessing
While we hold our breath over the Middle East tragedy, markets return to interpreting if bond yields are just enough to eradicate inflation or if their volatility points to something bigger.
Market Update: Capital markets and war
If the attack on Israel last week felt as epoch changing as 9/11, then markets seemed to show determined apathy – or did they?
Market Update: Recession fears creeping back
Financial markets are in one of those occasional periods where the world’s economic realities do not quite seem to match what some asset price moves seem to want to tell us.
Market Update: Economic resilience is about to be tested
Historically September has on average not been great for investors, and as it turns out this year is no exception to that norm. Both equities and bond valuations have declined and even though equities have not materially moved up or down when looking across the past four months, there is increasing sentiment that the 2023 market recovery is running out of steam or may even be turning.
Market Update: To yield or not to yield
US bond yields rose again, yet UK and European bond yields did not. We reflect on what this tells us about the prospects for growth, and both near and long term investing.
Market Update: Central bank hawks determined to defang inflation
The European Central Bank (ECB) raised rates yesterday, with the majority of its Governing Council members concerned that the inflation parasite may be alive for a while longer. Of course, parasites can continue to be robust while their host becomes pale and wan.
Market Update: Energy in focus – oil prices up and an ill wind for renewables
Markets have been generally quiet at the start of September but energy is again becoming an issue for equity and credit markets. Oil prices have risen since the start of the summer, with Brent crude having bounced along a bottom of $73 per barrel for the first half of 2023.
Market Update: Employment stats back in the lime light
Summer is officially over, but we are none the wiser regarding the direction of the economy. Or are we? Well, we quite likely are, but just a bit and not enough to know if next month’s equity markets will be higher or lower than right now. Indeed, we never actually know that with a high degree of certainty.
Market Update: Transcontinental growth divergence
We don’t seem to be able to get away from writing about how bond yields have been driving equity markets due to their influence on underlying valuation dynamics. We wrote about it previously, on many occasions over the past two years, and we have to say that last week is no different.
Market Update: Tech stocks back under bond pressure
August has undone much of what July brought to equity investors, yet the latest correction looks more technical than fundamental.
Market Update: Disinflation legs and lags
A week with both lower US inflation and the return of GDP growth in the UK, yet markets traded like a yoyo rather than up. We take a deeper look.
Market Update: Expect the unexpected
Compared with July’s buoyancy, the first week of August has demonstrated markets’ continued fragile balance between optimism and the fundamentals of valuations.
Market Update: Business belies negative data
Equity markets continue to be buoyant after the rate rises in Europe and the US. Some market participants have been calling this the ‘Teflon market’ because nothing sticks to it. We would rather think of it as a sort of running machine; no matter how steep the incline of the treadmill, markets seem able to keep running upwards.
Market Update: Another inflation driver turns over
Last week’s markets have, yet again, revolved around inflation, wages and profit margins. In the UK, we finally got a little of the good news that has been stoking US markets. Inflation wise, June turns out to have been not so bad. Inflation data showed a notable slowing while retail sales were perky, possibly because we were all pinky from the hot weather.
Market Update: Core inflation slowdown equals an upbeat week for equity markets
We wrote at the start of last week that markets had come to expect another round of significant interest rate rises from central banks, and that risk assets such as equities were likely to come under some pressure. At the end of last week, however, equity markets have risen sharply, with most more than reversing their losses of the previous week.
Market Update: Markets sour on news of resilient economy
Last week we commented how the second quarter’s positive stock market returns were driven by a somewhat surprising improvement in investor sentiment. Surprising, because at the end of March there was much fear that the crisis amongst US regional banks would lead to a serious deterioration in lending conditions, leading to a quicker and more pronounced slowdown than had been previously anticipated.
Market Update: A glass half-full half year
Half-way through 2023 and, all in all, things have been fair-to-middling for markets. We’ll have a more detailed run-through of asset class performances in next week’s Weekly, but an assessment of the changing economic and markets landscape over the quarter seem appropriate for this week’s edition.
Market Update: Markets catching up to reality
Following three weeks of ‘not a lot of news’ being good news for stock markets, bad news dented investor sentiment last week. This has coincided with some reversal of global liquidity as the US government is once again stepping up fundraising to replenish its coffers and Pan-European business sentiment surveys ticked down. No surprise then, that risk assets experienced a mild sell-off that reversed some of June’s gains. Hardest hit were China, Europe and the UK, but for inherently different reasons.
Market Update: Market conundrum amid volatile growth
Last week saw equity markets move higher yet, despite central bank hawkishness. We had another 0.25% rate rise from the European Central Bank (ECB) and, although the US Federal Open markets Committee (FOMC) left rates unchanged, they gave us strong hints of at least another 0.25% hike in July. They also indicated their expectation for rates to stay higher for longer than many think.
Market Update: Immaculate disinflation sentiment cheers investors
Another positive week in global stock markets, which seems unremarkable given it has been fairly good since the beginning of May. However, looking more closely – as we do – two market dynamics tell us more market participants are warming up to the narrative that bringing inflation under control while still achieving a soft landing for the global economy may be what 2023 brings. First, stock market gains over the past few weeks have been spreading to the mid and small cap market segments, rather than coming from just a handful of mega-cap stocks. Second, falling inflation expectations mean recent...