Credit Suisse

Is it August 2015 again? In the first week of January, a spectacular Chinese stock market crash once again prompted officials to provide extraordinary stimulus measures and devalue the yuan. Just as before, gyrations in China pushed global markets deep into risk-off mode, with selloffs in Asian, European, and U.S. equities, as well as crude oil futures. The resolution is likely to be the same as it was last August, too, according to Kasper Bartholdy, Head of Emerging Market Fixed Income...

Depending on who’s talking, the climate change agreement reached at the 2015 Paris Climate Conference in mid-December is either a watershed moment in environmental history or just another toothless framework. It’s certainly true that the political will of current and future national governments will play a large role in how much greenhouse gas emissions fall in the next two decades – and how much the global temperature rises as a result. Still, Credit Suisse says the deal’s very existence...

Fixed-income investors face a difficult dilemma these days. By definition, they seek yield to meet their investment goals, but many financial market observers are predicting trouble in one popular source of such yield – the high-yield bond market. There’s real cause for concern. The junk bond market has seized up several times in the past few years, undergoing sharp, sudden swings due to periodic lacks of liquidity. As the Federal Reserve’s long-anticipated December rate hike began to...

Earlier this year, when Tesla CEO Elon Musk tweeted about an upcoming product launch, the market paid attention. That tweet—which divulged only that the new product was not a car and would be unveiled April 30—sent Tesla’s shares soaring and boosted the electric carmaker’s market capitalization by nearly a billion dollars. (Tesla later revealed the new product to be a battery to power homes.) But not all dispatches from the Twitterverse carry the same weight as one from a...

The Federal Reserve’s long-anticipated rate hike yesterday –its first in 10 years — came amid worry from some that moving the federal funds rate up from zero could slow U.S. economic growth. The U.S.’s underwhelming post-financial crisis recovery provides some support for that pessimism: nominal GDP growth has averaged just 3.75 percent despite the benefit of a near-zero interest rates, a long-depressed dollar and a dropping unemployment rate. Might the situation turn...

Need a loan? You can always go to a bank. Or you can try to borrow from your peers. Increasingly popular “peer-to-peer lending portals” allow borrowers and lenders to connect directly through online marketplaces, threatening to disintermediate traditional financial institutions in the process. But how do peer-to-peer sites assess the risk involved in the loans they make? What role will regulation play in their future? Will institutional investors get on board? Industry experts discussed these...

Investors in emerging markets have underperformed their developed world peers for the past three years. After a particularly difficult year in 2015, due to the sharp depreciation many currencies experienced against the U.S. dollar, investors will need to be discerning in 2016, but Credit Suisse’s Investment Solutions & Products (IS&P) team expects economic growth to stabilize, opening opportunities to invest in select emerging market assets at attractive prices. What follows is Credit...

Enough talk already. The moment is finally here: The Federal Reserve raised interest rates today by 0.25 percent for the first time since June 2006. Credit Suisse doesn’t believe the small, well-anticipated hike will hurt the U.S. economy in and of itself. (What happens in rate-sensitive markets, especially high-yield bonds, is another story, and one that The Financialist will cover in the coming days.) More important to financial markets are the signals Federal Reserve Chair Janet Yellen...

While the European Central Bank announced tamer-than-expected quantitative easing measures this month, it also offered a bit of reassurance to those counting on a broader QE program: bank president Mario Draghi said that the ECB was prepared, if necessary, to implement further easing. But is more easing actually likely in the coming year? Credit Suisse believes the answer is “no.”   To understand why, it’s important to look at what might have prompted the bank to...

What central banks do – and how their policies diverge from one another – will continue to drive financial markets in 2016, impacting fixed income markets and creating opportunities for equity investors in places where policy is easing, according to the 2016 Investment Outlook from Credit Suisse’s Private Bank. The Federal Reserve seems almost certain to raise interest rates for the first time since 2006 in December – and, Credit Suisse believes it will raise them three more times in 2016....