Global Investment View - December 2019
Friday 29 November 2019
Global Investment View
Sentiment rebound favours rotation towards value
In recent weeks equities rallied along with bond yields as investors reacted to the prospect of a US-China ‘phase one deal’ and fading global recession fears. The value of negative-yielding bonds continued to fall, from US$17 trillion over the summer to the current US$12.5 trillion. While equities were previously overshadowed by the excessive gloominess on the global economy and earnings, markets rebounded after corporate results in the US and Europe met or exceeded low expectations, and as economic data did not show any material worsening. The mantra now seems to be ‘not so bad is the new good’.
In recent weeks equities rallied along with bond yields as investors reacted to the prospect of a US-China ‘phase one deal’ and fading global recession fears. The value of negative-yielding bonds continued to fall, from US$17 trillion over the summer to the current US$12.5 trillion. While equities were previously overshadowed by the excessive gloominess on the global economy and earnings, markets rebounded after corporate results in the US and Europe met or exceeded low expectations, and as economic data did not show any material worsening. The mantra now seems to be ‘not so bad is the new good’
Other news
March: GIV Infographic
Global investment views.
Early Christmas gifts to support year-end rally
As we approach year-end, markets can count on two pieces of news to propel some optimism. The first comes from the US, where the Biden victory, without a real Blue Wave, is seen by markets as the best possible outcome. A Republican, or even a 50-50 senate, would make it very hard for the new president to pass any extreme measures in terms of fiscal push, more drastic legislation or tax increases.
Stay agile amid high uncertainty
Markets have fluctuated between positive news around geopolitics (US-China trade talks, Italy and receding risks of no-deal Brexit)