Latest Insights
Subscribe for relevant insights delivered straight to your inbox
OECD leading indicators recovering, note statistical meddling
The OECD’s leading indicators are giving a recovery signal but users should be aware of a recent methodological change that has increased monthly volatility, argues Simon Ward, Economic Adviser.
Industrial output rebound bullish for equity earnings
Unprecedented GDP falls greatly exaggerate damage to equity market earnings, which are geared to rebounding industrial output, argues Simon Ward, Economic Adviser.
Tubthumping (I get knocked down but I get up again)
Portfolio managers on the Absolute Return Income Strategy reflect on how the lyrics of a song from 20 years ago can have some interesting overlap with today’s crisis-hit economy and markets.
Global monetary update: money growth still strong, lending slowdown to extend
Global monetary acceleration since early 2020 argues for an inflation pick-up in 2021-22 but the increase could prove temporary if money growth now normalises, argues Economic Adviser Simon Ward.
Will industrial commodity prices surge?
Simon Ward, Economic Adviser, argues that attempts to rebuild inventories against a backdrop of “excess” money could result in a sharp rise in commodity prices into 2021, complicating central bankers’ plans to maintain super-easy monetary policies.
First in first out of COVID, how has China fared?
May Ling Wee, China equities portfolio manager, discusses the main highlights for investors in China stocks over the first half of the year, the implications on portfolio performance and the outlook for the rest of the year.
Tech stocks: looking for secular growth, but not at any price
Global Technology Team portfolio managers Alison Porter, Graeme Clark and Richard Clode discuss why they believe an active approach is now needed more than ever to avoid pockets of extreme tech stock valuations.
ESG in COVID times: doing the REIT thing
The Global Property Equities Team highlights how COVID-19 is accelerating the importance of ESG factors within real estate, along with the supporting role the sector is playing in the global recovery.
Lagging Chinese money growth isn’t concerning
Money measures have surged in most major economies. Narrow money outperforms broad money as a leading indicator of economic activity. Annual growth of the official M1 measure in June was 35.9% in the US, 22.0% in Canada, 15.2% in the UK, 12.6% in the Eurozone and 12.3% in Japan.
Equities / cash switching rule update
The “monetarist” equities / cash switching rule followed here recommends unhedged global equities (MSCI World index) only when the following two conditions are satisfied:
1. Six-month change in global (i.e. G7 plus E7*) real narrow money above six-month change in industrial output;
2. 12-month change in global real narrow money above slow moving average (currently at 5.6%).
2020 Trends in Investing: ESG Considerations on the Rise
The 2020 Trends in Investing Survey reveals that ESG investing is gaining popularity among financial professionals and investors in the U.S.
Still looks like a “V”
The central view here remains that the global economy is staging a V-shaped recovery – or an italic V, at least – from the covid shock (not recession), with industrial output / GDP likely to regain pre-crisis levels in late 2020 / early 2021.