News & Views

Weekly Market Review

09/08/2019 - Product News
Volatility returns with a vengeance as the Chinese renminbi falls beneath Rmb7 to the US dollar Volatility returned to markets this week, as China allowed the renminbi to fall through Rmb7 per US dollar for the first time since the 2008 financial crisis, breaching a level that the Chinese central bank had fiercely defended, widely believe to be in response to the escalating trade war with the US. The sell-off intensified as President Trump accused Beijing of currency manipulation, and it was reported that Chinese companies had suspended purchases of agricultural products from the US. However, equities began to claw back their losses as Larry Kudlow, a senior White House economic adviser, said the US administration wanted to continue trade talks with China, ahead of the September 1st deadline for new tariffs to be placed on $300bn of Chinese imports. This was followed by the Reserve Bank of New Zealand, the Reserve Bank of India and central bank of Thailand all cutting interest rates by more than expected, whilst China’s latest export data for July unexpectedly bounced back. However, by the end of the week, equity markets started to slide again at the prospect of further disruption in Europe, as Giuseppe Conte, Italy’s coalition Prime Minister, announced he would start proceedings to recall parliament for a vote of no confidence.
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Meeting the needs of the globally mobile client

05/08/2019 - Feature Articles
The way people live and work is changing. Today people can be conducting business on a laptop in the Maldives while their children are at school in rural England. According to the UN, 232 million people are currently living and working outside their home country. This may broaden people’s horizons, but it can introduce considerable complexity into their financial affairs.
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Weekly Market Review

02/08/2019 - Product News
Markets fall as company earnings results overshadowed by interest rate decision and trade wars Despite encouraging company earnings, markets have been dominated by the US Federal Reserve’s (Fed) latest interest rate decision and news on trade talks between the US and China which resumed on Tuesday. The Fed cut interest rates by 0.25%, which was in line with expectations, although some had hoped for more. However, Jerome Powell, chairman of the Fed, guided market expectations lower as he said the rate cut was not the start of a prolonged rate cutting cycle, disappointing markets. This was followed soon after by news that the US is proposing a 10% tariff on a further $300bn worth of Chinese imports, this time hitting a range of consumer goods from mobile phones to footwear.
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Market Commentary - Q2 2019

29/07/2019 - Product News
Both equity and bond markets made further progress over the quarter, with company results in the main beating analysts’ forecasts, as the current US economic expansion became the longest on record. Key leading economic indicators continued to paint a picture of a slowing global economy, with manufacturing surveys continuing to weaken. Investor attention turned from global economic weakness towards monetary policy easing in the form of interest rate cuts.
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Weekly Market Review

26/07/2019 - Product News
ECB on hold despite further weakness in German manufacturing sector. Expectations for immediate monetary easing by the European Central Bank (ECB) got ahead of reality this week, following lead indicators pointing to further contraction in the German manufacturing sector. As it was, the ECB kept rates on hold, but opened the way to further interest rate cuts and the resumption of quantitative easing at the September meeting. Aside from this, mixed company results failed to give markets any real direction ahead of next week’s US Federal Reserve (Fed) meeting, with expectations running high for a 0.25% interest rate cut.
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Weekly Market Review

19/07/2019 - Product News
It has been a mixed week for markets, whilst investors wait for further news to provide direction. The first week of second quarter company earnings season has provided mixed results, but it is too early to draw any conclusion as to whether an economic slowdown is evident. President Trump lowered expectations of an impending trade deal with China, as he warned that a trade deal is still a long way off. On Thursday, following an announcement that the Iranian Revolutionary Guard had seized a foreign vessel, came the news that the US Naval ship, USS Boxer, had been forced to shoot down an Iranian drone over the Straights of Hormuz (strongly denied by the Iranians), raising tensions yet further in the Gulf. However, markets preferred to focus on a speech by the New York Federal Reserve President, John Williams, in which he said, “it’s better to take preventative measures than to wait for disaster to unfold”, helping to confirm expectations of an impending interest rate cut, despite the release of encouraging economic data in recent days.
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So what exactly is a defensive asset right now?

15/07/2019 - Feature Articles
Multi-asset investing offers a variety of benefits, with diversification being one of the most obvious. By holding a range of asset classes that will behave differently in various market conditions, portfolio managers can avoid performance becoming overly dependent on correctly guessing the future direction of markets, a task that can be highly challenging at any time but especially when binary political issues of the sort that exist currently remain unresolved. Furthermore, by using fund managers with different styles within a given asset class, performance can be smoothed even further, with the goal being to produce strong risk-adjusted returns.
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Weekly Market Review

12/07/2019 - Product News
US interest rate cut all but set in stone It was a mixed week for markets, but one in which the US equity market broke through a record new high, as Jerome Powell, chairman of the US Federal Reserve (Fed) warned of continued uncertainties in the US economy during a Congressional hearing. This provided confidence to markets of a forthcoming interest rate cut in July, despite last Friday’s robust non-farm payrolls jobs data.
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Smartim Highlights and Lowlights - June 2019

08/07/2019 - Product News
After stalling in May the rally in equity markets recommenced in June, with most major markets rising strongly (India was again the contrarian, falling slightly in local terms). However, the uncertain backdrop to the market rises was illustrated by the fact that Fixed Interest made gains as well whilst gold rose sharply. The now usual set of issues rumbled on, with US/China trade tensions, the eventual outcome of the UK’s attempts at Brexit and the argument between Italy and the European Union (EU) over the latter’s fiscal rules all still unresolved. However, underneath the headlines there were the usual nuggets to be found.
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Weekly Market Review

05/07/2019 - Product News
Bond and equity markets rally in tandem as the US & China resume trade talks Bond and equity markets rallied in tandem this week as weak economic data fuelled expectations of monetary policy easing by central banks, and the US and China committed to resuming trade negotiations with the US postponing the threat of tariffs on a further $200bn worth of Chinese imports. However, as a taster of what is to come, the US proposed to place tariffs on an additional $4bn worth of European Union (EU) imports, on top of the $21bn proposed in April, in response to EU aircraft subsidies for Airbus. The additional goods include Scotch whisky, cheese, olives and pasta. As of Friday, markets are currently on hold, awaiting the latest US non-farm payroll data to give a steer on interest rate policy, with expectations of 160,000 jobs created, year-on-year average earnings up 3.2% and an unemployment rate of 3.6%.
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