- Monday, 20 April 2015
- Wealth Management Expert Opinion
Equity Markets on Edge
With financial markets so overvalued, and with so many ticking time bombs around, we remain on high alert for a deterioration in market performance that could presage a bear market in equities and other risk assets. What is interesting about looking back at past bubbles is that it seems obvious in hindsight that valuations were in bubble territory and that future cash flows would simply not justify the price paid by investors at the peak. It is also possible to identify, with hindsight, market peaks and troughs by simply...
Read more...- Tuesday, 07 April 2015
- Wealth Management Expert Opinion
European Fund Buyers and Emerging Market Equity Exposure
Emerging Market (EM) equities are far from a homogeneous grouping covering Eastern Europe, Asia, South America, Russia and China to name but a few and given the regional performance variations, it would take a very brave asset allocator to make substantial calls on any particular region. In Euro terms the 1-year performance to 31 January 2015 has varied considerably with EM...
Read more...- Monday, 27 October 2014
- Wealth Management Expert Opinion
Equity Markets Have Become Addicted to Central Bank Liquidity
The FOMC meeting this Wednesday marks a very important point because QE is expected to end. The importance of QE in supporting equity markets can be seen from the equity market rally that began on 16th October almost solely because an influential Fed Governor appeared on a financial news network to say that the Fed may consider not ending QE. These comments were...
Read more...- Monday, 20 October 2014
- Wealth Management Expert Opinion
The FED’S Credibility and the Efficacy of QE
It would appear that, as soon as there is a little trouble in equity markets, one of the more influential FOMC members does a 180 degree U-turn. He then blames everything that is going wrong on Europe. And finally, he suggests the FED should continue a policy that has been remarkably successful in generating asset price inflation whilst failing to ignite a sustainable economic recovery...
Read more...- Monday, 07 July 2014
- Wealth Management Expert Opinion
Why the Equity Bulls Believe they are Right
Ahead of the long holiday weekend in the US, we learned that the economy generated more than 200,000 jobs for the fifth month in a row (a feat last achieved around the turn of the century) and the unemployment rate fell to 6.1%. Janet Yellen also delivered a speech to the IMF suggesting that raising interest rates to ward of speculative bubbles was too destructive a policy and untested...
Read more...- Monday, 23 June 2014
- Wealth Management Expert Opinion
Yellen Follows in the Footsteps of Helicopter Ben and Easy Al
Equity markets rallied after hearing the soothing words from Janet Yellen in her post FOMC press conference on Wednesday. Despite the committee raising their estimate of rate increases over the next two years and downgrading growth estimates for this year, Janet Yellen soothed the markets by dismissing all and any concerns. She wants us to believe we are in a Goldilocks...
Read more...- Monday, 09 June 2014
- Wealth Management Expert Opinion
The ECB's Runaway Train
The ECB delivered on its promise of action at this week’s meeting and, if anything, slightly exceeded expectations with such a clear “we are not finished” statement. Equity and bond markets rallied strongly and there is a feeling among some analysts that there could be a summer “melt up” in equities. Although our work has indicated for some time that, for the long-term, equities are...
Read more...- Sunday, 13 April 2014
- Wealth Management Expert Opinion
More Cracks Appearing in the Equity Bull Market
We have all seen the chart below. It shows the S&P 500 plotted with the Federal Reserve balance sheet. The message seemed to be quite simple; when the Fed was expanding its balance sheet (and extending the duration through Operation Twist) the equity market rose and when the Fed stopped printing, the market has suffered fairly sharp reversals. Despite this assumption, it is interesting...
Read more...- Sunday, 16 March 2014
- Wealth Management Expert Opinion
Equity Markets Reach a Critical Point
After another disappointing week in equity markets, everyone is focusing on the situation in Ukraine. Although this will likely dominate trading early next week, as we have highlighted several times recently, there are other macro concerns that could easily upset equity markets during the second quarter and beyond. It was not all bad news though as bonds and Gold continue to perform...
Read more...- Sunday, 09 March 2014
- Wealth Management Expert Opinion
The Russian Grizzly Bear Shakes Equity Markets
What a week of extremes. At the start of the week, the Russian Grizzly Bear was showing his teeth as the worst case scenario of conflict could not be ruled out when Russian troops moved into the Crimea. European equity markets declined by nearly 3%, Russia by 12% with the US outperforming, down by less than 1% on the S&P 500. As it became clear on Tuesday that neither side...
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