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Bonds / equities aren’t giving different messages
The strong rally in equities since late March contrasts with static longer-term government bond yields, causing some to argue that economic expectations in the two markets are out of sync, the suggestion being that a pessimistic bond market is smarter.
Chinese stockbuilding cycle aligned with global upswing
The global stockbuilding (inventory) cycle is judged here to have bottomed in H1 2020, probably Q1. The cycle acted as a drag on global economic momentum in 2018-19 but is now scheduled to provide a tailwind at least through end-2021.
Global data flow supporting “V” scenario
Global six-month real money growth – on both narrow and broad definitions – is estimated to have risen to another post-WW2 high in June, based on data for the US, China, Japan, Brazil and India, which have a combined two-thirds weighting in the G7 plus E7 aggregates calculated here.
A “monetarist” perspective on current equity markets (July 2020)
The previous quarterly commentary suggested that the policy response to the covid-19 crisis would lead to a strong rise in global money growth, in turn suggesting strong economic growth in late 2020 / 2021.
The business investment cycle is bottoming
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.
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
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
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.
Accelerating and emerging trends within U.S. equities
Portfolio Managers Marc Pinto and Jeremiah Buckley discuss accelerating and emerging secular themes amid the COVID-19 crisis and which companies stand to benefit.
Investing in health care post COVID-19
Health care’s aggressive efforts to address COVID-19 could have a positive impact on the sector long term, says Portfolio Manager Andy Acker.
Emerging Markets: ‘a rising tide will not lift all boats’
Daniel Graña argues that a large disparity is likely between the success stories of certain emerging market countries and the failures of others.
Sustainability and digitalisation: speeding the transition to a low carbon world
Hamish Chamberlayne, Head of Global Sustainable Equity and Portfolio Manager, explores the advancements made in the digital space and how this is closely linked with a sustainable future.