The Strategist

In the first televised duel between the two US presidential candidates Harris and Trump, the two opponents exchanged blows as expected. Today, the focus is on the latest data on consumer price trends in the US. In the run-up to the Fed's expected interest rate turnaround next week, this could...

The start to the new week was mostly friendly on the stock markets. The focus is on the European Central Bank's (ECB) key interest rate decision on Thursday. Mixed economic data and a declining inflation trend should justify a further easing of interest rates. The first TV debate between the...

Following last Friday's US labour market report, which came in roughly as expected, and the associated confirmation of expectations of the Fed's first interest rate easing in September, the focus is now shifting to the ECB's interest rate decision this week. Sentiment on Wall Street remained...

The weak September so far is continuing to live up to its reputation as a bad month for equity markets. Investors are torn between concerns about the economy and hopes of an imminent interest rate cut, and yesterday's economic data failed to provide any guidance. At the end of the week, the...

Investors remain cautious. There was little movement on Wall Street yesterday as US stock markets stabilised somewhat. Markets in Europe and Asia remained under pressure. The ISM services purchasing managers index is expected to provide further clues today before all eyes turn to Friday's...

Worse-than-expected US economic data and a sell-off in semiconductor stocks led to losses on Wall Street on Tuesday. Asia-Pacific stock markets followed the negative cues from overseas and posted some heavy losses on Wednesday.

Caution dominated in financial markets on Monday after a difficult but in the end strong August and with the prospect of a potentially seasonally challenging September. Asia-Pacific stock markets traded mostly lower on Tuesday after inflation in South Korea hit a 42-month low. Investors are now...

Looking at Germany, it is not only the economic situation that is worrying, but also the political situation following the elections in Thuringia and Saxony. The historic success of the AfD - the right-wing party became the largest force in a state election for the first time, surpassing 30% in...

Stock markets in the Asia-Pacific region were trading higher to finish the week after inflation data out of Japan signalled the Bank of Japan (BOJ) is progressing towards its inflation goal. Losses at Nvidia dragged down the tech-heavy indices on the Nasdaq, but a strong performance by other US...

US stocks closed lower on Wednesday as traders became nervous ahead of Nvidia’s after-market quarterly earnings release. The chipmaker’s results failed to impress investors high expectations for revenue growth, causing tech stocks to tumble in after-hour trading. Asian markets were dragged down...

The sharp rise in equity volatility at the beginning of August proved to be a correction. We shift US equities to "Overweight", while fixed income remains “Underweight“, and we are taking profits in gold. The Federal Reserve is expected to cut rates in September, easing market headwinds and...

With the overall picture remaining constructive, we maintain our "Overweight" in equities and "Underweight" in fixed income. Fundamentally, stronger electricity demand growth, low valuations and the prospect of an interest rate turnaround offer attractive entry points in the utilities sector...

The solid but slowing growth environment should continue for the time being, albeit with regional differences, and the risk of recession seems to have been pushed further out. The equity market offers a more attractive risk/reward profile than the credit market, with the US stock market in...

Geopolitical tensions, robust US growth, rising oil prices and stubborn inflation are pushing equity and bond markets into negative territory for 2024. We are temporarily downgrading US equities to "Underweight" and reducing our preference for ILS investments to "Underweight".

The current economic and financial market environment is highly uncertain, with ge­opolitics, central banks and elections all making the next few months difficult to navigate. In this House View’s main article, we take a break from the day-to-day market environment and instead focus on our...

In this month's House View, we review some of our "Outlook 2024" forecasts and take a look at the latest developments in the financial markets. In our Macro article, we discuss the challenges faced by the manufacturing sector in recent years, highlight the factors behind this development and...

Major asset classes have started the new year on diverging paths without pricing in a uniform macroeconomic environment for 2024. To hedge against the risk of a hard landing, we would prefer government bonds with longer maturities. Overall, we consider the opportunities and risks to be balanced...

Global growth rolls into 2024 in a sluggish pace, leaving the burden of driving market optimism to disinflation and hopes for "sooner" and "sharper" interest rate cuts. While the probability of our current "high for longer" base case has indeed receded, we still think it will take a prolonged...

The Fed and the ECB will have to maintain their tight monetary regimes for longer. In the absence of an unexpected recessionary dynamic, decisive central bank rate cuts are therefore unlikely in the first half of 2024. Following the sharp rise in government bonds, we have decided to reduce our...

As we get closer to turning points, both on the economic growth and on the monetary policy sides, uncertainty reaches its peak. Geopolitics have come on top of this already uncertain environment, compounding a challenging combination of high bond yields and slowing economic growth. Higher...

As the world's most competitive economy to date, the European Union has a problem: its main competitors, China and the US, no longer want to play the game. In his report "The future of European competitiveness", Mario Draghi, a grandee of EU politics who, as former head of the European Central...

September often brings increased volatility to equity markets, and this year is no different with several significant events poised to influence capital markets. Critical labour market data in the US and the upcoming Federal Open Market Committee (FOMC) meeting, where the US Federal Reserve...

At the Kansas City Fed’s symposium in Jackson Hole, Federal Reserve Chair Jerome Powell signalled potential US interest rate cuts, citing a cooling labour market and easing inflation. Powell’s remarks highlight a shift towards a more flexible, "data-dependent" policy approach. With the Fed’s...

2024 continues the alarming trend of record-breaking global temperatures, surpassing previous highs set just last year. With July 22 marking the hottest day ever recorded, the persistent rise in temperatures underscores the urgent need for climate action. As extreme weather events become more...

Equity markets experienced some turbulence and increased volatility during the second quarter 2024 earnings season, making it somewhat difficult to interpret the reaction of individual stocks to the results. We take a closer look at what happened and come to three key conclusions: The growth...

Financial turbulence in Japan's markets has escalated, with the yen rebounding against the dollar and Japanese stocks plunging into a bear market. The Bank of Japan's decision to raise the policy rate to 0.25% and reduce Japanese Government Bond purchases triggered a significant drop in bond...

Prior to the start of the second quarter corporate reporting season, we published an issue of The Strategist on expectations for the S&P 500 (The Strategist 15 July 2024). We highlighted the following factors: 1) the second-quarter reporting season is one of the most exciting of the year, 2) a...

The first 2024 presidential debate between Joe Biden and Donald Trump marked a critical juncture for Biden’s re-election campaign. Biden’s performance during the debate was notably poor; he appeared hesitant, his speech was sometimes unclear, and his responses did not alleviate concerns...

The reporting season for the second quarter is always one of the most exciting of the year. In the first quarter, it is often still too early for companies to make any adjustments to their full-year outlook. With the second quarter, however, the question arises as to whether expectations...

The dollar-yen exchange rate is primarily influenced by the cost-of-carry issue, which hinges on the key policy rate decisions of the Fed and the Bank of Japan (BOJ). If the Fed starts to ease or the BOJ normalises interest rates, diminishing yield differentials would prompt a reversal in the...