There’s been some clamour around everybody’s favourite UK-related subject this week: Brexit and politics are once again grabbing the headlines.
Given the extent of coverage I thought it worth recapping (briefly) how our view on these matters is formed and how we might begin to assess the… Read the article
Yesterday, the US yield curve became inverted. The yield on three-year Treasuries was temporarily (blink and you’ll miss it) lower than that of their two-year counterparts. This is, apparently, huge.
Many are worried because an inverted yield curve has frequently been a sign of upcoming… Read the article
I received the following chart from a broker earlier this week. It plots the trailing 12-month price return on the US stock market versus a survey of activity in the US manufacturing sector, where a score above 50 indicates expansion and vice versa.
The broker’s conclusion was straight-forward, “if you… Read the article
Markets reacted sharply to the weekend’s news that ongoing attempts to form a coalition government in Italy had collapsed after the President’s rejection of the proposed Finance Minister, prompting likely new elections later this year.
Unstable governments in Italy are nothing new, but markets… Read the article
In the midst of February’s volatility most of the reasons given to explain equity market declines centred on the role of rising US bond yields and, perhaps, the exaggerating role played by exchange-traded volatility products.
Since then, equities have seen another (modest) bout of… Read the article
There are a couple of reasons why we don’t believe that forecasting short term events is a sustainable investment approach.
First, it is very difficult: how can one have a sustainable forecasting ‘edge’ over and above what is currently priced into the market on something like an election result?… Read the article
Thirty years ago today, the rules governing the London Stock Exchange changed, ushering in the “big bang” in the UK. The move was in part a response to concerns that London risked losing its pre-eminence in the world of finance to cities like New York.
The effect of the big… Read the article
Humans like to think they know more about things than they really do. This is perhaps more true in finance than elsewhere, because the abundance of data lends itself to analysis, pseudo-science, and experts.
One of the data points that draws most attention is the US non-farm payrolls, which is… Read the article
A week on, where are we?
Friday 24th June feels like a long time ago – so much has happened since then. Sterling has dominated the headlines here in the UK. It has risen a little from the initial post-Brexit low of 1.312 against the dollar, but is still down… Read the article
All over the UK and Europe fund managers are being asked for their views on Brexit. Many will answer: ‘we don’t forecast.’ The more ambitious might add: ‘markets don’t like uncertainty, so volatility might create opportunities.’
As human beings we find these same old clichés deeply unsatisfying; we want to… Read the article
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OKWelcome to the M&G Multi Asset Team’s Allocation blog, previously known as the Episode blog. We have changed the name of our blog to resonate better with our readers in Europe, however, the content and purpose of the blog has not changed. The Allocation blog continues to aim to provide unique market perspectives from our dedicated team of experienced asset allocators.
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