News flash Some welcome respite - inflation

Some welcome respite

Yesterday, it was announced that US inflation had cooled in October by more than forecast, causing US stocks to surge the most since early 2020. On the day, the S&P 500 gained 5.5% in a euphoric reaction to the possibility that the US annual inflation rate may well have now peaked, and that the worst…

News flash Playing into the Fed’s Hands

Playing into the Fed’s Hands

On 29 July 2022 we wrote about the fact that in these paradoxical times, bad news is good news. This theme continued in the last week as the earnings of some of the largest tech companies disappointed, which reportedly plays right into the Fed’s hands. While it’s not helpful for investors to see the earnings…

News flash Politics Trumps Economics

Politics Trumps Economics

An article forwarded to us this week highlights how living standards in the UK have fallen significantly behind Western Europe and their real wages are not only lower than they were 15 years ago, but they’re likely to be even lower next year. “In the past 30 years, the British economy chose finance over industry,…

News flash Fragile (Forty)Five

Fragile (Forty)Five

There have been several jokes lately – perhaps in the last 45 days – welcoming the UK to the Emerging Markets’ club, or even to the Fragile Five. Indeed, with inflation in double digits, their currency having lost more than 20% against the dollar since the start of the year to late September and their…

News flash Predictably Irrational

Predictably Irrational

We’ve borrowed the title for our News Flash this week from the book of the same name by Dr Dan Ariely, in which he refutes the common assumption that humans behave in fundamentally rational ways – a form of behavioural economics. Traditional economics is routed in the set of simplifying assumptions which include that humans…

News flash Super Thursday

Super Thursday

Yesterday has been called  “Super Thursday,” the day central banks around the world followed in the Fed’s footsteps, hiking rates by anywhere between 0.5 and 0.75 percentage points. The aftermath has been a major sell-off in equities as well as a spike in bond yields. The Bank of England raised interest rates to 2.25% and…

News flash Analysing August’s US inflation data

Analysing August’s US inflation data

Global equity markets dropped dramatically on Tuesday, following the release of the US inflation numbers for August. The 12-month inflation number came in at 8.3% (against the median estimate of 8.1%), easing from July’s annual rate of 8.5%. At first glance, these seemingly small movements in the numbers should not have caused the S&P 500…

News flash Light at the end of the tunnel

Light at the end of the tunnel

While Europe and the UK face structural challenges and a Russia-induced energy crisis, a recently published report highlighted the stellar performance of US corporates. According to MRB Partners, profits surged in the second quarter to an all-time high relative to GDP, “underscoring the extraordinary pricing power and global prominence of US corporations. Profits have benefited…