Perspectives Pictet

Macroview The ISM manufacturing and nonmanufacturing surveys for August declined sharply. But these surveys are not necessarily a good predictor of economic growth The ISM Manufacturing index in the US fell heavily in August. The 49.4 reading was well below consensus expectations (52.0) and its lowest level since January 2016. The Non-Manufacturing index painted a similar picture, recording its worst monthly fall since the recession of 2008-2009. It dropped from 55.5 in July to 51.4 in...

Macroview While near-term Fed rate hike has been priced in, other factors favour the greenback in the medium term. Alternatives like the Swiss franc and Australian dollar look less attractive. With a December rate hike already largely priced in, further dollar support from Fed tightening could be fairly limited in the next few months, especially as the Fed is likely to lower its rate forecasts for the coming years to take into account increasing concerns about the decline in ‘neutral’ real...

Published: Tuesday September 06 2016Read full article from Pictet Report hereCaroline Reyl, head of Pictet Premium Brand Fund, on megatrends in premium brandsPremium brands have proved to be profitable long-term investments, offering strong revenue growth, superior operating margins and robust balance sheets over the long term. There are four fundamental megatrends behind their success in driving returns, whether it be in food, drinks, cosmetics, hotels or autos.The polarisation of demand....

Published: Tuesday September 06 2016PDF version of this article available hereWith almost 300 years of history, Rémy Martin is one of the world’s leading cognacs, selling 24 million bottles a year to consumers in Europe, North America and Asia. In 1990–91, it joined forces with a much younger premium spirit — the orange-flavoured liqueur first sold by the Cointreau brothers in 1875. The merged Rémy Cointreau group also owns a range of other spirits, including Mount Gay rum, Metaxa brandy and...

A soft monthly payroll number conceals health of the US jobs market, but a Fed rate hike may not come until December. Non-farm payroll employment rose by a modest 151,000 month on month (m-o-m) in August, below consensus expectations. Moreover, the unemployment rate remained unchanged, wage increases were soft, and the average work week declined surprisingly. However, the disappointing August nonfarm payroll number followed solid numbers in June and July. Overall, job creation has been a...

Extension of quantitative easing (QE) along with changes to how QE works may be in the offing, but an announcement might wait until December. Ahead of its 8 September policy meeting, the European Central Bank (ECB) has expressed its “concerns” over the lack of upward momentum in core inflation. In our view, it is not a question of whether the ECB will ease (QE extension is a given, and more could be needed at some stage in the future), but more about getting the sequence right in order to...

At current levels, the oil price is close to equilibrium, with little in the fundamentals to suggest a sustained move higher in prices in the coming months There were sharp movements in the price over the summer, and further volatility is likely in the coming months. WTI oil prices dropped around 25% between June and early August. Prices subsequently rallied, rising by around 20% to close to USD50/b, before dipping again at the close of August. High inventories played a key role in pushing...

Macroview Euro area inflation remains sluggish, holding out the prospect of further intervention by the ECB before year’s end. Euro area headline inflation remained broadly stable in August, at an annual rate of 0.2%, according to a flash estimate from Eurostat on August 31, while core inflation unexpectedly declined. Excluding energy, food, alcohol and tobacco, prices rose at an annual rate of 0.8% in August, according to the flash estimate, compared with 0.9% in July. The broader picture...

Spain will try to break its nine-month political stalemate this week. Two months after the second round of general elections in Spain on 26 June, no government has been formed. Mariano Rajoy, the Popular Party (PP) leader and caretaker prime minister has been nominated by the king to head the government. The investiture debate will start on August 30, with a confidence vote on August 31. If unsuccessful, a second vote will be held on September 2, with a lower threshold for success (simple...

Published: Tuesday August 30 2016When Ermenegildo Zegna founded a wool mill in 1910, he had just four looms which he had bought from his father. He located his business in Trivero in the Alpine foothills of Piedmont where the mountain water has only faint mineral traces and makes cloth that is soft and easy to work. Aged just 18, his aim was to make the most beautiful fabrics in the world – and local people saw him as either a dreamer or a madman. But Zegna fabrics quickly became one of...