10 November 2016

Trump's double surprise.

It is quite clear that in the days leading up to the U.S. Presidential election, both markets and surveys got it wrong. Traditional polling once again failed to spot the depth of support for radical political change. This was after all the U.S., which has delivered the strongest post-crisis economic performance of any developed nation. 

RSS - Strategic Insight
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Equity strategy and market outlook January 2018

In this month’s strategy piece, Alastair George believes that 2018 is likely to be a year of two halves for global equity markets. Initially, strong economic momentum and investor sentiment is likely to prevail over the negatives of high valuations and continued monetary tightening. However, the delayed impact of tighter policy in 2017 and further tightening in 2018 appears to be a strong headwind to further equity performance from mid-year. He notes that output gaps in developed markets have now closed, in aggregate, for the first time since 2009. This is a structural change from the slack environment which persisted following the financial crisis of 2008-09 and investors should therefore consider sector allocations carefully. In his view, equity portfolios should now be tilted towards sectors which have offered a degree of resilience and a better risk/reward in the past. Specific growth or event-driven situations should also be favoured over broad market exposure, as developed market price/book valuations as a whole remain unappealing.

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