Simon Ward

Economist

Simon Ward has worked as an economist studying financial markets for more than 30 years. He believes that changes in monetary conditions are a key driver of both the economic cycle and movements in financial markets; accordingly, a forecasting approach emphasising monetary analysis has a better chance of success.

Simon joined Henderson following its acquisition of New Star in 2009. He has also held positions at WorldInvest, Lombard Street Research, and Bank Julius Baer. Simon has degrees from Cambridge University and Birkbeck College.

Simon Ward has worked as an economist in financial markets for over 30 years. His forecasting process combines monetary and cycle analysis. Monetary trends signal the direction of the economy six to 12 months ahead; cycle analysis provides longer-term context and acts as a cross-check of the monetary signals.

Money growth in excess of the rate required to support economic expansion is associated with an increase in demand for financial assets and upward pressure on their prices (“money moves markets”). The relative performance of different assets depends on the direction of the economy and the status of the various cycles as well as popular speculative narratives that concentrate demand and can result in bubbles.

This online journal provides regular updates of the signals from the forecasting approach; it presents a selection of the research circulated by Simon Ward to Janus Henderson investment teams. Comments and questions are welcome.

Simon joined Henderson in 2009. He previously worked at New Star Institutional Managers, Lombard Street Research and Bank Julius Baer. He has degrees in economics and finance from Cambridge University and Birkbeck College, London.

Articles Written

US monetary scenarios

US monetary scenarios

Annual growth of US broad money, on the M2+ definition* used here, rose further to 25.7% in May, the fastest since 1943 and more than 20 percentage points higher than a year earlier.

A long-term perspective on US money and wealth

A long-term perspective on US money and wealth

Recent posts on the “quantity theory of wealth” may have been heavy going, so what follows is an attempt to explain the approach more simply using charts of US data extending back over 100 years.

How strong money growth will boost inflation

How strong money growth will boost inflation

Global inflation is expected here to pick up significantly over the next 2-3 years. This would be consistent with the Kondratyev “long wave” price / inflation cycle, which implies a multi-year rise to a peak in the late 2020s, as well as current monetary trends – G7 annual broad money growth may have reached 16% in May, which would be the fastest since 1973.

The case for EM equities

The case for EM equities

A seven-factor checklist for assessing the relative attraction of emerging market equities is giving the most promising message since 2016.

US money growth above 1881 peacetime high

US money growth above 1881 peacetime high

Incoming monetary news remains strong, supporting the expectation here of a V-shaped global economic recovery accompanied by buoyant markets and an inflationary pick-up in 2021-22.

The quantity theory of wealth, continued

The quantity theory of wealth, continued

A large positive gap opened up between the actual money stock and money demand during the GFC. “Excess” money balances, on the view here, “caused” the subsequent recovery in economic activity and asset prices.

The quantity theory of wealth

The quantity theory of wealth

G7 annual broad money growth is the highest since the 1970s. The consensus argues that this will not be reflected in strong nominal GDP growth and / or rising asset prices because of a faster fall in the velocity of circulation, which has been in trend decline for 50+ years.

Global monetary update: surge exceeds expectations
Global Perspectives

Global monetary update: surge exceeds expectations

The US, China and Japan, among others, have released March monetary data, with Euroland and UK numbers due this week. Global six-month real money growth, on both narrow and broad definitions, is estimated to have risen sharply.

Encouraging Chinese money data

Encouraging Chinese money data

Chinese money growth picked up further in March, supporting expectations of a strong economic bounceback during H2 2020.

A “monetarist” perspective on current equity markets (April 2020)
Global Perspectives

A “monetarist” perspective on current equity markets (April 2020)

The last quarterly commentary expressed a cautious view on the outlook for the global economy and risk markets, on the grounds that monetary trends remained weak and did not support early recovery hopes. Market falls in Q1, of course, mainly reflected the coronavirus crisis – the monetary analysis was a “lucky general” on this occasion.

Global money data improving, may give positive signals soon
Global Perspectives

Global money data improving, may give positive signals soon

Global six-month real narrow money growth bounced back in February but remained below the 3% level cited in previous posts as a necessary condition for adopting an economic recovery forecast.

COVID-19 Market outlook

COVID-19 Market outlook

Simon Ward, our leading Economist, discusses the latest Coronavirus data, global monetary prospects and how recent developments fit in to his long term cycle framework.