As speculation continues to mount about whether Joe Biden will drop out of the US presidential race, we are seeing the markets start to position for a potential win for Donald Trump later this year. Movement in the markets offers a preview of what may lie ahead in the event that Trump returns to the…
With global inflation returning to normal ranges – albeit slightly slower than anticipated a year or even six months ago – some economists are questioning whether investors should still be ready for an aftershock in the form of wage-fuelled inflation. This seems like a reasonable concern, given how resilient the US labour market has proven…
The outcome of South Africa’s elections on May 29 was, as we noted in our newsletter last week, an unexpected but most positive turn of events. Although in the weeks ahead of the election, markets were not accounting for a worst-case scenario with a coalition between the ANC and populist parties, they were also not…
The Democratic Alliance (DA) and African National Congress (ANC) signed off a historic agreement to form a government of national unity (GNU) just as South Africa’s new cohort of parliamentarians took their oath in Cape Town. The development brings to fruition what we, a few weeks ago, outlined as one of the less likely but…
A trio of election results this past week serves to highlight just how inaccurate markets can be in anticipating and pricing political risks, especially in emerging markets. Investors and analysts were caught somewhat off guard by unexpected outcomes from polls in India, Mexico, and South Africa. In India, stocks and the rupee dropped sharply as…
Over the past two years, the impact of interest rates on the US economy is a subject we have returned to multiple times in our newsletters. The conventional wisdom is that higher interest rates – which remain elevated in the wake of inflation – should dampen economic growth and equity markets. Following this reasoning, we…
Rhyme-as-reason is a cognitive bias where humans are more likely to retain and believe advice phrased as a rhyme. Think of the harmless saying: “An apple a day keeps the doctor away.” Or, in the investment world, the adage: “Sell in May and go away, don’t come back until St Leger’s Day.” After the S&P…
With less than two weeks to go before South Africa goes to the polls, the African National Congress (ANC) is pulling out all the stops to secure an outright majority in Parliament. The ruling party has somehow managed to dispel some of the negativity about corruption, unemployment, slow growth, and load shedding ahead of the…
Over the past two weeks, several large foreign investors have announced plans to abandon or cut back their investments in the South African economy. Oil major, Shell, plans to exit its investment in its South African downstream assets, including its 700 fuel station forecourts, while BNP Paribas plans to exit its South African corporate banking…
