October 11, 2019
Will they, won’t they, that seems to be the question most investors are asking in response to the latest trade meeting between the U.S. and China. The rhetoric appears to be confused, Trump' s latest tweets threw up snippets of frustration but also control in the negotiation stakes. Trump appears to be suggesting that China is desperate for a deal, but he is not. Confused?
October 10, 2019
It’s been a while since I last posted a blog and I am struggling to think what has changed. Not much to be sure. We still have this inane trade war that started well before Trump but has since been politicised by Trump, and we still have a standoff.
September 12, 2019
What is there to say about the day? Well, it was rather interesting, to say the least. We had a missive fired by Trump at one of his favourite characters, Fed Chairman Powell. Trump suggested that the Fed should be easing rates below zero. The market is set for a wild ride. If we get a trade deal combined with a dovish Fed, lower interest rates and consistent valuations then the recipe is there for a large market move.
September 11, 2019
Shares on the day were mixed and the general narrative for both stocks and bonds has been uncertainty. For equities investors are gravitating towards value stocks and bonds, well, they are unloved at present. For equities, what performed last year are now the outcasts. The rotation out of growth to value is causing a rethink for strategies.
September 10, 2019
There is an old saying reap as you shall sow, and that’s probably what is happening to markets at present. To say that investors were a little ahead of the central banks is probably an understatement. So too is the resolve of the central banker to not be bullied by the market at present. The inversion that we feared has suddenly become normal.
September 9, 2019
Markets reacted predictably to a weak jobs number. Weak is good for equities, right? After all what could possibly go wrong. A weak number means that the Fed will ease later this month as predicted by Fed Funds Futures traders and that means the discount and risk-free rates are lower and that’s all good for the models. Buy, buy, buy. Equity investors are becoming more confident.
September 5, 2019
What a difference 24-hours makes. Just a little while ago investors were looking over their shoulders wondering where the next piece of alpha was coming from and today it seems that risk is now back in vogue. Investors piled on risk as it became apparent that Hong Kong may be stabilising, and that with the slower economic numbers the Fed will just have to cut to stimulate the economy. We have heard this chestnut before.
September 4, 2019
Who said that? Well, that’s what markets and central banks must be thinking, and probably any country that is a major trading partner of the U.S. It appears as though Trump is ramping up the rhetoric and suggesting that the country needs him so that the country gets a better deal. That may be true, but the elections are in 2020, and trade is suffering.
August 30, 2019
How predictable the markets have become? Markets have become like that two-year old waiting for its sugar hit. The inversion between two-year bonds and ten-year bonds continues, but does not seem to be having the same impact now that the market is waiting to hear the new promises on trade.