The quality and visibility of company profits are what matter.
The Bank of England seems poised to raise interest rates aggressively to combat inflation, yet its explanations don’t square with its own forecasts and analysis. Expect fewer hikes than the market currently implies.
Market sentiment has been swinging wildly lately, but in this week’s review chief investment officer Julian Chillingworth explains why he thinks the supply of festive spirits won’t run dry.
Despite some unanticipated giveaways, fiscal policy is tightening dramatically. Political confusion and economic uncertainty further cloud the outlook.
After a stunning second quarter for economic growth and corporate profits as the world started opening back up again, investor optimism has been tempered. Growth is slowing down in China, the first major economy to regain its lost output, and the global economic recovery seems to be coming off the boil too. Still, we think going from great to merely good will still be good enough.
The children have returned to classes and the adults seem to be drifting back to the office. The pandemic still looms large though, affecting travel, spending and taxes.
Resurgent growth in the post-COVID world has rekindled talk of the next ‘supercycle’ for industrial commodities. But beneath the headlines, the reality is that this demand is likely to pale in comparison with the driver of the original supercycle.
China reminds everyone that communists like to meddle in markets. Meanwhile earnings are booming in the West as the recovery rolls on despite investor nervousness.
Indicators of a strong post-COVID recovery keep coming out of the US and other major developed economies, but upside data surprises have brought with them concerns of persistent high inflation.
