News flash Expect the unexpected

Expect the unexpected

Seasoned investors have witnessed a range of events that have surprised over the years – pandemics, natural disasters, political upheavals, wars, terrorism, financial crises… and more recently unexpected, decades-high inflation in many of the world’s largest economies. Most of these events have had a devasting effect on financial markets. In the modern era, no country…

News flash Zooming out of uncertainty

Zooming out of uncertainty

While we have already written much about inflation this year, it seems appropriate to continue in this vein as the actions of central banks, and the consequences of market participants pre-empting or second-guessing their actions, have global equity markets on the brink of being classified as bear markets – defined as being down 20% from…

News flash Searching for the bear market trough

Searching for the bear market trough

History shows that turning points in bear markets occur at the points of maximum pessimism where there is almost a vacuum of optimism. Although markets initially reacted well last week, as US Federal Reserve chairman Jerome Powell pushed back against incremental 0.75 percentage point rate increases (the actual hike was 0.5 bps), markets have since…

News flash Quantitative tightening

Quantitative tightening

The Federal Reserve this week announced a 50 basis points increase in its rate, the first hike of this magnitude in 20 years. This move did not come as a surprise at all and was in line with many analysts’ expectations and, indeed, with the Fed’s communications. FOMC meetings are becoming a bigger event as…

News flash Political polarisation

Political polarisation

We wrote in March about how the war in Ukraine could change everything. In fact, according to Professor Yuval Harari, an Israeli public intellectual and historian, what’s at stake for everyone across the globe increases as the conflict continues. More than two months into the conflict, Ukraine and Russia have not yet managed to reach…

News flash Concerns shift from inflation to growth

Concerns shift from inflation to growth

The IMF has revised its global growth outlook for 2022 and 2023 downwards to 3.6% for both years. This is despite inflation risks falling. The question is whether we are now facing a recessionary environment. According to UBS research, there are three factors that can mitigate this risk: First, European spending firepower should limit the…

News flash The bullwhip effect

The bullwhip effect

The “bullwhip effect” was coined in 1997 and refers to a phenomenon within supply chain management whereby shifts in consumer demand cause greatly exaggerated changes further up the supply chain. Inventory swings act in bigger and bigger “waves” in response to consumer demand, with the largest “waves” impacting the suppliers of raw materials – either…