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April 4, 2022

The Russia-Ukraine war adds to near-term growth risks for the global economy and will likely keep inflation elevated for longer. While uncertainty is high, equity markets are oversold and should recover if tensions ease in the coming months says Russell Investments’ global head of investment strategy Andrew Pease.

The Russia-Ukraine war adds to near-term growth risks for the global economy and will likely keep inflation elevated for longer. While uncertainty is high, equity markets are oversold and should recover if tensions ease in the coming months says Russell Investments’ global head of investment strategy Andrew Pease.


Key market themes

February 15, 2022

Inflation volatility is coming says Ruffer LLP’s investment director Duncan MacInnes.

Inflation volatility is coming says Ruffer LLP’s investment director Duncan MacInnes.

Inflation is at a 40-year high. Given Ruffer has warned against rising inflation for some time, you might be forgiven for thinking we’ve cracked open the fancy (chocolate-covered) biscuits.

Unfortunately, we cannot rest upon our laurels. Because, ironically, now inflation is perceived as a problem, we can rest assured it will soon appear ‘Transitory’. But appearances can be deceptive.

January 24, 2022

Financial conditions have never been so accommodative says Ruffer LLP’s investment director Duncan MacInnes.

Financial conditions have never been so accommodative says Ruffer LLP’s investment director Duncan MacInnes.

Omicron or not, the US economy is booming. The cocktail of pent-up animal spirits, household net worth at all-time highs plus hefty measures of monetary and fiscal stimulus is a potent one. The Atlanta Federal Reserve ‘NowCast’ has US Q4 real GDP at 7%; add 6% CPI inflation and you get a 13% nominal growth rate [1]. The growth picture is similar in Europe and the UK. One would have to go back 50 years to find a similar surge.

January 12, 2022

When I was on honeymoon in Venice, I spotted a pair of Chinese dragons, one chewing a toenail and the other picking its nose. Smart shop, Grand Canal – my wife Jane and I set an upper limit on what we’d pay. We later walked out with the dragons having written a cheque for slightly over four times our upper limit.

When I was on honeymoon in Venice, I spotted a pair of Chinese dragons, one chewing a toenail and the other picking its nose. Smart shop, Grand Canal – my wife Jane and I set an upper limit on what we’d pay. We later walked out with the dragons having written a cheque for slightly over four times our upper limit.

December 1, 2021

Investors have divided into two camps. Those who believe inflation will subside and the rise in prices will prove temporary. And others who fear we are entering a period of high sustained inflation reminiscent of the 1970s. We consider both scenarios unlikely.

Investors have divided into two camps. Those who believe inflation will subside and the rise in prices will prove temporary. And others who fear we are entering a period of high sustained inflation reminiscent of the 1970s. We consider both scenarios unlikely.

Overlay the bottom chart below and you would be forgiven for believing that we are now on the same trajectory as we were 50 years ago. There are parallels but to assume the economy will meet the same inflationary fate would be a grave mistake for investors.

October 1, 2021

The Covid-19 delta variant, inflation and central bank tapering are unnerving investors. We expect the pandemic-recovery trade to resume as inflation subsides, infection rates decline and tapering turns out to not equal tightening.

The Covid-19 delta variant, inflation and central bank tapering are unnerving investors. We expect the pandemic-recovery trade to resume as inflation subsides, infection rates decline and tapering turns out to not equal tightening.

Amid this backdrop, our outlook favours equities over bonds, the value factor over the growth factor and non-US stocks over US stocks.

Key market themes

September 30, 2021

In the world of investment, there are few things everyone can agree on. You’re either a bull or a bear, a dove or a hawk, for or against.

In the world of investment, there are few things everyone can agree on. You’re either a bull or a bear, a dove or a hawk, for or against.

If there’s one thing investors do know for sure—it’s that bonds and equities can be used in combination to achieve a ‘balanced portfolio’.

At the simplest level, this means building portfolios with some equities for the good times, and bonds for the bad. Typically, in a 60/40 split.

July 12, 2021

We have been talking of inflation for well over a decade—which is not the same thing as calling its timing. An impasse was created by the failure of the economy to grow after the 2008 crisis—all the risks (as we patiently explained) were deflationary, and in vain did the central banks and governments try to force an inflationary impulse into a sluggish world. Their primary weapon? An invention, deployed on a grand scale—quantitative easing (QE to its friends).

I am writing this just before a US inflation report which, to quote Bloomberg, “May provide clues on the monetary-policy outlook; S&P futures were little changed, as were European stocks [awaiting] the next policy statement from the European Central Bank…”

February 18, 2021

We all know that 2020 was an incredible, and terrible, year. The pandemic caused the worst recession for centuries, along with an appalling death toll and suffering. Meanwhile financial assets pushed ever upwards, surfing a wave of liquidity meant to counteract the impact of the pandemic.

We all know that 2020 was an incredible, and terrible, year. The pandemic caused the worst recession for centuries, along with an appalling death toll and suffering. Meanwhile financial assets pushed ever upwards, surfing a wave of liquidity meant to counteract the impact of the pandemic.

The chart below shows that it was also a record year for share issuance, surpassing even the heady days of 1999-2000.

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