News flash The two faces of January

The two faces of January

Janus, the Roman god that gives January its time, has two faces: One looking back into the old year, one looking forward into the next. Likewise, this is the season when asset managers, economists, and analysts gaze back at market performance for the previous year and make their predictions about what the upcoming year will…

News flash Fed and the markets in sync

Fed and the markets in sync

Markets look set to end 2023 on a high note, with the Federal Reserve giving its strongest signal to date that the end of the current interest rate tightening cycle is now in sight. Practically every asset class—including equities and corporate bonds—surged yesterday after the Fed indicated that it is projecting more aggressive interest rate…

News flash Slumping dragon, surging tiger

Slumping dragon, surging tiger

India’s stock market topped a total valuation of $4 trillion for the first time on Tuesday this week—on the same day that Moody’s downgraded the outlook for China’s sovereign credit rating. Data released this week also shows that institutional investors have pulled out over $31 billion in stocks and bonds from the Chinese financial system…

News flash From profit inflation to price deflation

From profit inflation to price deflation

Global inflation has been the major theme of the post-COVID-19 years, stoked by supply chain disruptions, high energy prices, and robust consumer spending. Some corporations have been able to bolster margins over the past three years, thanks to consumers building up their cash reserves during the times of lockdown and government stimulus. But, as inflation…

News flash A step to the right

A step to the right

The presidential election in Argentina and the general election in the Netherlands this week both delivered unexpected results that caution investors to expect a volatile ride next year. In Argentina, libertarian candidate, Javier Milei, caused a major upset by securing 56% of the vote to win his country’s presidency. He rode into power on a…

News flash The pendulum swings

The pendulum swings

Howard Marks, the legendary investor, wrote that investment markets swing between euphoria and depression and between celebrating positive developments and obsessing over negatives. We’ve experienced both sides of the pendulum this year, most recently with a strong month-to-date rally that has erased the losses of a dismal September and October for equities. At the time…

News flash The monkey’s paw

The monkey’s paw

The Monkey’s Paw, an early 20th century short story by WW Jacobs about a cursed artefact that grants wishes, warns that getting what you want often comes with a price. Investors anticipating not only the end of interest rate hikes but looking ahead to central banks lowering lending rates should perhaps heed the moral of…

News flash Roaring results, gloomy guidance

Roaring results, gloomy guidance

On the face of it, equity markets have many reasons to celebrate. More than three quarters of Fortune 500 companies that have reported earnings for the September quarter have beaten expectations, the US has delivered impressive GDP growth and inflation seems finally to be coming under control. Why, then, did the S&P 500 fall another…