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Global Investment News August 2019
Thursday 25 July 2019
Global Investment View
Testing new records
Financial markets have been enjoying a record-breaking run of late. The tide that lifted all boats was the new wave of ultra-accommodative monetary policy, at this stage announced but not yet delivered. The conviction that central banks (CBs) will step in again to avoid excessive deterioration of the economic outlook, in the absence of any material sign of inflation, was the main driver of the recent rally. The overall narrative in the market is that the glass is half full. The economic cycle will be extended by CBS, interest rates will remain lower for longer and risk assets will remain well supported: credit and EM by the hunt for yield, and equities by the repositioning of investors that are late joining the party. This is all taking place against a backdrop where overall, valuations are less compelling than they were at the beginning of the year, although are not too stretched. All good then? READ MORE
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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.