In March 2015 we discussed the opportunities and threats posed as $3t of global bonds traded with negative yields. Last week, that figure hit $6t – one third of the total market. Meanwhile, more central banks are talking or enacted NIRP – Negative Interest Rate Policy – raising some awkward questions. It’s tough to build … More Feeling negative – Take II
Markets dived again this week and cheap oil is looking like more of a hindrance than a help. Its more obvious negative effects aren’t helping banks; but again the outlook warrants a reality check in bank stocks , not the current mass exit. There are plenty buffers left before banks hit a systemic crisis – unless panic crashes through them. … More We need to talk about oil
Takeaways: A deal at last for Greece! After marathon talks which lasted over 17 hours, an agreement was announced on Sunday night to keep the Greeks in the Euro. ‘Deal’ in this case being an agreement to enter talks on a new bailout linked to a range of new pre-conditions. This effectively leaves Greece borrowing … More Yet another Greek tragedy playing out in Europe
Takeaways: With Greece on the edge, markets have maintained remarkable poise. Meanwhile, there’s a warning that UK interest rates might rise this summer. Another Maradona moment? Labour markets might be ‘fizzing’, but a rate rise this summer feels premature, with echoes of the ECB’s move in 2008.
Takeaways: Some of the trends for the year discussed last week are already apparent in events during the first weeks of 2015. Innovation is driving IP-centric M&A and divergent economic performances is showing where future stress points may appear.
Takeaways: Last year had its moments, but the last 12 months could look pedestrian compared to 2015. Of course change and even faster growth can bring challenge along with opportunity. Time to wheel out that old, but true, maxim that recovery can be the best, but also the worst of times for companies – and … More Buckle-up! Ten themes for 2015
Takeaways: A new era awaits. The Fed’s final QE hurrah was flagged, but we expect more market discretion, volatility, disruption and currency oscillation without this safety net. The cost of debt capital will rise. Weaker/exposed nations and companies can expect a rougher ride. Brazil and Turkey look exposed. AQR ran just about to script, but … More New era in capital after (US) QE and AQR draws a line.
There are many questions to ponder this week. From the strength of the US recovery to why markets seem only periodically concerned with geopolitical turmoil – is everything a buying opportunity these days? Are junk bonds our canary? Is Banco Espirito Santo the last European bank casualty or a taste of things to come? US … More Questions, Questions…
According to Bloomberg, confidence in the global economic recovery has waned, with the escalating Ukrainian crisis high up the list of concerns. In their latest survey, 40% of respondents said the global economy is improving compared with 59% in January. That isn’t a shift in sentiment you’d pick up in capital markets. Demand and pricing … More Confidence is a preference…
Pushmi-Pullyu Conflicting narratives continue to drag markets hither and thither. Increasing levels of M&A highlight increasing corporate confidence, buoyed again by improving growth figures. However, the Ukraine-Russia conflict and dashed Q1 earnings expectations add uncertainty and disappointment. It all adds up to a volatile, but not inflammatory mix since the quest for yield continues to … More Pushmi-Pullyu