Oct 20, 2016
Nestlé slightly failed to reach its market expectations. Organic revenue growth of +3.3% was weaker than estimated (consensus +3.5%). In detail, +2.5% were due to internal real growth and +0.8% due to price adjust-ments. As a consequence, Nestlé lowered its organic sales growth forecast for the current year to +3.5% from +4.2, mainly due to slowed growth in the emerging markets and deflation in much of Europe and North America.
Oct 19, 2016
The recent oil price developments could lead to a positive surprise on the inflation side. In equities the focus is on the U.S. earnings season and the corporate outlook for the next year. On this backdrop we have increased inflation-linked bonds and further reduce government bonds.
Oct 19, 2016
The U.S. inflation rate climbed to +1.5% in September, hitting a two-year high. Consumer prices rose more than expected from +1.1% in the previous month. On the other hand, the core inflation rate, excluding energy and food prices, dropped slightly to +2.2% from +2.3%. Emerging inflation could put the Federal Reserve (Fed) in a tight spot. However, Fed Governor Janet Yellen recently explained that a temporary overshooting of the Fed’s inflation target would not be considered a problem. In the U.K. inflation also rose to the highest in nearly two years. British consumer prices accelerated +1.0% last month compared to +0.6% in August.
Oct 18, 2016
Insecurities about the future path of the Fed’s monetary policy has still a tight grip on investors. Recent statements from U.S. Federal Reserve President Janet Yellen and latest U.S. economic data seem to justify the Fed’s wait and see bias. One evidence of a still insecure economic outlook came from the New York Federal Reserve’s Empire State index which surprised negatively with a decline to -6.8 points in October from -2.0 a month earlier. Analysts had expected the activity gauge to improve to +2.0.
Oct 17, 2016
Stock markets remain cautiously optimistic on the backdrop of positive quarterly earnings from major U.S. banks and monetary policy. Investors will continue to focus on corporate earnings results and the timing of the next Fed rate hike. Federal Reserve Governor Janet Yellen defended the central bank’s expansive monetary policy, without excluding the possibility of a tightening before the year end.