Getting back on track
As we were writing, Iran declared the Strait of Hormuz “completely open” and markets rose sharply. This time, bond yields fell back too. Even before that announcement, equity markets had, more or less, decided that the war is over – thanks to...
Brief relief
Markets burst upwards on Wednesday, as the US pulled back from the precipice and announced a ceasefire with Iran. Oil prices dropped over 15% while bonds and stock prices rallied on the hope that global supply chains might quickly return to normal....
A seasonal central bank pivot
We start April, and the new quarter, still very much dealing with the consequences of March. Both equity and bond indices’ prices are better since last Friday’s close as we write but the narrative is as febrile as at any point since...
Markets hold their breath
Donald Trump’s apparent olive branch to Iran helped to temporarily stabilise markets this week. Stock prices gained a little in the early part of the week, government bond yields fell back from recent highs, and energy prices dropped back from last Friday’s...
Escalation precedes de-escalation
The Iran War keeps dragging down markets. Israel’s strike on Iran’s South Pars gas facility, followed by Iran’s strike on a Qatari liquified natural gas facility – the largest in the world – saw crude oil spike above $115 per barrel and...
Capital markets’ fragile optimism
Stock markets pulled back over the last couple of days, as oil prices rose to around $100 per barrel (pb). Before that, equities had been holding up okay, particularly large cap stocks. Sterling has slipped about 0.5% against the US Dollar which...
Known Unknowns returns
The US and Israel’s war against Iran has plunged capital markets into uncertainty. No one knows how long it will last, what the endgame is or how much the global economy will be disrupted along the way. Markets are famously ignorant of...
AI boom or doom
Global stocks went more or less nowhere this week. The UK and Europe’s strong runs continued, US markets consolidated, and China returned from holidays to find increasing overseas demand for the Renminbi. President Trump’s State of the Union Address barely moved markets....
Stable indecision
The US Supreme Court just announced that cannot use the Emergency Powers Act to impose reciprocal tariffs. Stocks rose, US government bond prices fell somewhat, and the dollar weakened slightly. The moves are positive but not yet meaningful. Much will now depend...
Anxiety under the surface
Stock markets were flat in aggregate this week. That is an improvement over the frantic action we have seen recently and, towards the end of the week, there was even some relief for beleaguered tech stocks. Below the surface, however, things look...
Flipping the narrative
US tech stocks dragged down overall global equity returns this week – the Nasdaq Composite index down nearly 3% in sterling terms. The AI theme that propelled the sector for years is now causing a crisis of confidence, over a potential growth...
End of euphoria, back to normal?
Equity markets hit all-time highs on Tuesday and Wednesday, including a 1.5% gain for US stocks. But Microsoft’s earnings pushed the US back to where it started the week. The US tech giant’s spending and revenue figures reignited fears about an AI...
Weak links in the outlook
After a roller coaster week, markets end just a bit lower than when we started. Equity indices were mixed in their own currency terms. US investors will see their markets as slightly down, but US returns will look worse for international investors,...
Are markets right to be relaxed?
Markets have continued their strong and broad-based start to the year. US threats on Greenland cooled a little into the end of the week, allowing regional politics to take focus. Japan’s Prime Minister announced a snap election next month, which weakened the...
Optimism prevails
Global stock markets have started the year well, with most gaining during the first two weeks. The FTSE 100 broke through the 10,000 level last Friday for the first time in its history. Encouragingly, small and mid-cap stocks have led the rally,...
A quiet break from the new normal
We have crossed from the old to the new year with a bit of cheer. While US equity markets have marked time, Europe’s broad market has hit a new high, and the FTSE 100 traded above 10,000 this morning. China traded the...
Rate cuts for Christmas
This has been the last week of liquid trading for 2025. The return of US economic data has sharpened the view that the US and other regions have had a soft patch. Interestingly, that clarity has helped rather than hurt markets. Investors...
Powell offers some liquid cheer
We are into the last active investment days of a truly remarkable year. After a short note on this week’s events, we offer some thoughts about 2025 and an outlook for 2026. Most equity markets have been solid this week but this...
Waiting for a Santa Rally
Capital markets felt a little better this week, but with emphasis on “a little”. Global stocks gained incrementally through the week, putting most of the November market downdraft behind them. Underlying these moves is a genuine improvement in the economic outlook for...
Markets give thanks to central banks
Capital markets had a good week. Stocks and bonds gained virtually everywhere – particularly small and mid-cap companies. The most obvious rationale for this rally is a growing expectation of interest rate cuts, but we suspect this is just part of investors’...