Perspectives Pictet

The world is living in exponential times, according to the Greek-American entrepreneur Peter Diamandis — an era when the pace of technological change is doubling every year or two. Speaking to an audience of 40 wealthy families at The Family Consilium which was convened in Gstaad by Pictet in June 2016, he said that the speed of innovation was making the world’s population better-off, healthier and happier. In this conversation, he explains his thinking and gives examples of the ‘moonshot...

Published: Wednesday August 10 2016Riedel, the 260-year-old Austrian family-owned company makes a wide range of differently shaped glasses which enhance the taste of the most popular grape varieties, according to an 11th generation descendant of the founderWhen Maximilian J. Riedel’s grandfather produced the first wine-specific glass, some connoisseurs doubted whether it would make much difference to the taste of the wines they drunk. Wine glasses then were smaller than today’s, made of cut...

Published: 9th August 2016Download issue:In the Summer 2016 issue of Pictet Report, Pictet managers and analysts set out the megatrends behind the success of premium brands and the financial pillars that make them attractive to investorsPremium 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...

Quantitative analysis points to parallels between state of equity markets today and markets 17 years agoThere are many similarities between the current period and 1999. Then, just as now, we were in the midst of a technology-led bull market following a housing-related recession, central banks were experimenting with very loose monetary policy, there had been a big drop in emerging markets and commodities in the previous year or so, and we had recently gone through a currency-related crisis...

Sterling quickly steadied after a lurch downward following the latest Bank of England (BoE) policy easing. But looming Brexit negotiations and the UK’s twin deficits cast a shadow over the currency On 4 August, the BoE delivered a broad easing package that beat market expectations. Furthermore, the BoE hinted at an additional rate cut later in the year (our scenario is for another 15bp rate cut in Q4 2016). The easing package delivered by the BoE was a more aggressive response to Brexit...

In spite of the Bank of England’s latest monetary stimulus, ambitious fiscal package may be needed to deal with steep drop in growth foreseen for next year On 4 August, the Bank of England (BoE) managed to beat market expectations by announcing a policy package that included a 25 bp rate cut (to 0.25%), a Term Funding Scheme (TFS) “to reinforce the pass-through” of the rate cut, a GBP60 bn increase in the bank’s purchases of government bonds, as well as up to GBP10 bn in corporate bonds...

Solid manufacturing and non-manufacturing numbers plus strong consumer spending mean we expect 2.5% GDP growth in the US in Q3 Although the ISM Manufacturing index in the US dropped back a little to 52.6 in July, it remained well above the low levels recorded at the turn of the year. The Non-manufacturing index moved back down as well but remained at relatively healthy levels.The rebound in the ISM Manufacturing index over the past few months is both encouraging and a bit surprising. The...

The BOJ confounded market expectations by just tinkering with policy on the margins in July. As a result, the yen should hold on to its recent gains. The Bank of Japan (BoJ) did not significantly change monetary policy at its Monetary Policy Meeting held on 28-29 July, contrary to market expectations. While the BOJ did announce an increase in its annual purchases of ETFs (from ¥3.3 trn to ¥6 trn), it kept the annual increase of the monetary base at ¥80 trn and did not cut interest rates...

The slight decline in the official manufacturing PMI does not tally with the Caixan equivalent. We believe the official PMI better reflects a Chinese economy heading towards growth of around 6.5% this year. China’s official manufacturing PMI declined slightly to 49.9 in July, while the Caixin (Markit) PMI rose significantly, to 50.6 from 48.6 in June. The official non-manufacturing PMI extended its rise from last month and increased by 0.2 to 53.9, well above the 50 mark that separates...

Modest wage pressures and low inflation expectations mean we see no reason to change our forecast of a single Fed rate increase this year, probably in December The US Employment Cost Index increased by 0.6% quarter-on-quarter and by 2.3% year-on-year in the second quarter, in line with expectations.Potential domestic wage pressures in the US remain hard to analyse. The unemployment rate has fallen sharply, and most other labour market indicators have improved. Although there is much...