Tag Archives: Investment review

The CIO office’s view of the week ahead.The first week of the year delivered a series of conflicting signals and a complementary dose of volatility in markets. After 20 days of daily moves of over +/-2% in the S&P 500 in 2018, out of last week’s three trading days of 2019 alone, two were marked by daily moves of over +/-2%. In data, the December US ISM manufacturing index showed its weakest reading in two years, as businesses continue to worry about trade tensions. However, this was...

The CIO office’s view of the week ahead.In an attempt to quell the widespread unrest and disruption caused by the “gilets jaunes” protesting against fuel tax rises, French president Emmanuel Macron announced a fiscal plan to the tune of EUR10bn. Without countermeasures, this spending increase will push France into a deficit of above 3% in 2019, to as high as 3.4%. As an indirect consequence, Italian sovereign spreads tightened on market hopes that the EU would show lenience in its 2019...

The CIO office’s view of the week ahead.The arrest of Huawei CFO Meng Wanzhou by Canadian officials on a US extradition order brings a new layer of complication to the ongoing US-China trade dispute. Chinese telecoms giant Huawei Technologies has ambitions to be a global leader in the next generation of 5G wireless network technology, which has equipment vendors around the world in a race to secure early dominance. Timing was particularly notable as the US and Chinese presidents Donald Trump...

The CIO office’s view of the week ahead.As expected, the US and Chinese presidents Donald Trump and Xi Jinping met to discuss trade alongside the G20 summit in Buenos Aires. For now, a tentative truce has been agreed, with Trump calling off further tariff rises in January. On its side, China will purchase an unspecified amount of goods from the US in order to reduce the trade deficit between the two countries. In the coming months however, further rounds of tricky discussions between the two...

The CIO office’s view of the week ahead.Brexit and oil kept their centre stage positions in last week’s headlines. Despite initial opposition from France and Spain, all 27 EU members agreed to Theresa May’s Brexit deal by lunchtime at Sunday’s European Council meeting. Could this be an indication of how poor the deal is for the UK? Despite May’s insistence that there is no alternative and this is the only deal available, we think she will have a hard time convincing the UK parliament and...

The CIO office’s view of the week ahead.Oil is on a losing streak. 12 consecutive days of falling prices led to a rise in high yield spreads. Because this decline has been largely supply-, rather than demand-driven and on the front-end of the forward curve, we are not overly alarmed about the long-term prospects of the oil price at this point. However, as a result of these recent moves, US high yield has suffered in particular, putting pressure on financial conditions. This was followed by...

The CIO office’s view of the week ahead.One-time Remain advocate, Jo Johnson (brother of leading Leave campaigner Boris), resigned from his position as minister of transport in protest at Theresa May’s handling of Brexit negotiations. Johnson’s departure signals an increased risk of no deal or a second referendum in our view, with a high level of uncertainty around the outcome persisting. Sterling’s subsequent fall reinforces our play on GBP volatility, which we maintain as the best strategy...

The CIO office’s view of the week ahead.Several factors halted the equity sell-off last week. Investors continued to take a jaundiced eye of some corporate guidance, but Q3 earnings growth has finally turned out as good as in previous quarters (around 25% year on year for the S&P 500).  The sky has seemed to brighten on other fronts too. Most conspicuously, oil prices have fallen and president Trump has floated the idea that tensions with China might be easing. Investors should probably...

The CIO office’s view of the week ahead.Last week’s continued equities sell-off was driven by disappointment with the earnings reporting season. Having propped up market returns for much of this year, tech’s poor performance was particularly noteworthy. Last week, below-expectation metrics from Amazon and Alphabet (Google’s parent company) flattened the S&P 500’s returns for 2018, while European equities have been much more disappointing. Excepting financials, top-line data are driving...

The CIO office’s view of the week ahead.Italian bond prices regained some ground after Moody’s cut Italy’s credit rating by one notch on Friday, keeping it within investment grade, while upgrading its outlook from negative to stable. Investors welcomed this as positive news while they anticipate Italy’s response to Brussels’ criticism of its proposed 2019 budget due later today. This could prove an eventful week for peripheral bonds driven by news around Italy, with rating agency S&P...