5 May 2017

Not really an economic surprise....

Economic surprise indices and raw materials prices rolling over in Q2

One of the notable features of improving sentiment in global stock markets over the last 6 months has been its reliance on ‘soft’ economic data and a continuation of positive surprises. We cautioned in March that economic surprise indices were both seasonal and mean reverting and also highlighted the tightening of monetary conditions in China, historically linked to declines in iron ore prices. Six weeks later, global economic surprise has rolled over outside Europe while energy, coking coal and iron ore prices are falling sharply.

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17 March 2016

Was there a "plaza" accord after all?.

Economic surprise indices and raw materials prices rolling over in Q2

One of the notable features of improving sentiment in global stock markets over the last 6 months has been its reliance on ‘soft’ economic data and a continuation of positive surprises. We cautioned in March that economic surprise indices were both seasonal and mean reverting and also highlighted the tightening of monetary conditions in China, historically linked to declines in iron ore prices. Six weeks later, global economic surprise has rolled over outside Europe while energy, coking coal and iron ore prices are falling sharply.

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Sector report cover
27/07/2017
Equity strategy and market outlook - July 2017

In this month’s strategy piece, Alastair George believes that good times to invest are when there are a multitude of ways to win and limited downside. At present, however, the bull case for equities seems to be increasingly based on a single ‘Goldilocks’ scenario contingent on the persistence of high equity valuations, easy monetary policy and low volatility. The path for even adequate returns on equities therefore seems rather narrow at present. This absence of upside, rather than any specific downside trigger is, in his view, sufficient reason to run portfolios at below benchmark risk levels.

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