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Aug 24, 2016

LGT Beacon: No US rate hike before the presidential election

Inflation remains subdued and the US presidential election in November could prove another blow to the postwar world order. The Federal Reserve is thus unlikely to raise rates before voting day. However, a Hillary Clinton win would signal continuity and raise the chance of a December rate hike – especially, if the economy and the stock market maintain their current upbeat tone.

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Aug 24, 2016

LGT Navigator: Eurozone seems to digest Brexit shock

European stock markets benefited from relatively solid economic data. Latest survey results showed that corporates seem to have digested the Brexit shock better than expected. According to Markit Economics the preliminary purchasing manager index (PMI) improved 0.1 to 53.3 points reaching the highest level in seven months.

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Aug 23, 2016

LGT Navigator: Markets hope for clear signals from the Fed

While recent comments of various U.S. Federal Reserve members have frightened off equity markets, the U.S. dollar in an initial reaction benefited from speculations about a sooner-than-anticipated increase in key interest rates in the United States. Investors will now focus on the annual international meeting of central bankers in Jackson Hole and eagerly await any signals about the Fed’s future rate hike timing, when Fed Governor Janet Yellen will speak on Friday.

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Aug 22, 2016

LGT Navigator: Fed voices hawkish rhetoric

The summer rally on equity markets seem to have come to an end last week. In Europe, levels reached at the beginning of last week could not be held and the EuroStoxx 50 traded about -3% lower on Friday compared to Monday. At the same time Wall Street stock indices traded sideways at the end of last week, lacking new economic evidence and corporate earnings news. Investors put the U.S. Federal Reserve’s short-term monetary policy direction back in focus, as some Fed members delivered hawkish comments pointing to the possibility of another rate hike this year.

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Aug 17, 2016

LGT Beacon: High yield bond investments remain attractive

During January’s turmoil, we undertook strategic purchases of high yield bonds. The position has rallied strongly since and will thus likely be trimmed back to our neutral quota again soon. Still, supported by the monetary policy-driven hunt for yield, as well as a brightening global economic outlook more recently, the asset class will remain attractive for diversified portfolios.

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