Perspectives Pictet

[embedded content] Published: Wednesday May 11 2016 The third edition of the Latam Family Office Master Class took place in Nassau from 4 to 6 April 2016, with more than 60 guests in attendance. This event was a great success, built around trends, workshops and exchanges of new ideas in the family office industry. Among the speakers we had the pleasure of welcoming, John A. Davis, Faculty Chair, Families in Business Programme, Harvard Business School; Paul Mc Ginley, captain of the 2014...

Macroview Silver is usually referred in financial markets as ‘high-beta gold’ or the ‘poor man’s gold’. As such, the recent appreciation in silver prices is not surprising given the robust performance of gold. April 2016 was a good month for gold, with prices rising by +4.9% per ounce in US dollar terms. But it was a stellar month for silver, which rose by about 15.6%. Silver tends to be highly correlated to gold (the average 12-month rolling correlation since 1980 stands at 0.70), so...

The question of central bank credibility, and fixed-income investing when nominal yields are so low In the May issue of Perspectives, Pictet Wealth Management’s chief investment officer, César Pérez Ruiz, steps back to review the efforts of the world’s main central banks to boost the economy. The banks have introduced ever more radical measures, including negative interest rates and buying corporate as well as government bonds. But growth and inflation remain flaccid throughout the...

We retain our above-consensus forecast for the euro area this year, but weak first quarter leads to small cut in outlook for the US The conditions that we identified at the start of the year for a market rebound all subsequently fell into place: support from major central banks was forthcoming, the Chinese economy and the oil price stabilised, the US dollar bull trend paused, and systemic risk declined. Valuations have duly recovered. Now, banks need to start performing for markets to have...

In spite of the relatively weak headline jobs number, wage growth and household income figures were quite upbeat. We therefore maintain our forecast of 2.5% GDP growth for the second quarter. Read full article here April’s US employment report was mixed. Job creation was relatively soft and the unemployment rate remained stable for ‘bad’ reasons. However, in the current economic context, employment growth remains healthy overall. Wage numbers were relatively upbeat, and the proxy for...

ISM figures for April, together with robust auto sales, suggest some pick up in US growth during the month Read full report here The US ISM Manufacturing survey for April 2016, published on May 2, dropped back a little, from 51.8 in March to 50.8, below consensus expectations (51.4). However, the level recorded in March was an eight-month high. And the April figure is well above the lows registered at the turn of the year (48.0 in December 2015, 48.2 in January 2016). The New Orders...

Published: Wednesday May 04 2016 Companies in the health sector have proved to be rewarding long-term investments, outperforming the market since 1995. Earnings per share on health stocks have grown between 10 and 14 per cent annually over the past five years, with an average total return of 19 per cent a year. They are very profitable, generate a lot of cash and pay high dividends – driven as they are by powerful megatrends. The first of these is demography, with the global population...

Published: Wednesday May 04 2016 Medical science made a wrong turn in the 1920s, according to Dr David Agus. An experiment took a dozen people with significant cuts on their legs, and treated half of them by wrapping bread dipped in water around the leg and half by leaving the leg open to the air. People with the bread on their legs healed twice as fast, and that spawned something called germ theory. ‘Germ theory says that as soon as you know what you’re up against, you know how to fix it....

As widely expected, core personal consumer expenditure (PCE) inflation dropped back slightly in March in the US, while wage increases remained subdued in Q1. We now expect that the Federal Open Market Committee (FOMC) will hike rates only once in 2016, probably in September. Read the full report here In Friday's report on income and consumption, data were also published on the PCE deflator, the price measure targeted by the Fed in gauging inflation. The core PCE price index (excluding...

The Q1 figure confirms our expectations of 1.8% growth this year, despite some clouds on the horizon Read the full report here Euro area GDP rose by 0.6% quarter on quarter (q-o-q) in Q1, in line with our above-consensus forecast. Evidence from high-frequency data suggests that domestic demand was the main engine of growth once again, supported by a strong rebound in both household consumption and corporate investment spending. We believe that momentum from this source still has legs:...