Donald Trump heads back to the White House as the 47th President, with an increased likelihood of a Republican sweep. Yesterday (6 November), market reactions were strong, with US stocks hitting all-time highs, 10Y bond yields jumping to 4.5%, and the dollar surging against most currencies.
The steady rise in massive deficits and debt-to-GDP ratios has made public debt a staple of the financial press.
However, in the wake of European elections and the opening of excessive deficit procedures, this topic - neglected by previous governments - is once again becoming a political issue. By 2025, there will be no getting around the issue of fiscal rebalancing in developed countries.
Before the measures recently announced, China was confronted with significant deflationary forces and was struggling to meet its 5% GDP growth target. Youth unemployment rate reached 24%, consumer confidence has been at rock bottom levels for years, household consumption has remained well below pre-pandemic trends and the real estate market has been falling for four years.
The MSCI World (developed countries index) hit an all-time high in mid-July, following an almost uninterrupted 33% rise since its low point at the end of October 2023. Only a correction of around 5% in April 2024 enabled some reactive investors to jump on the bandwagon if they hadn't done so since the last quarter of last year.
The price of gold has risen by over 17% since the beginning of the year, making it one of the best-performing assets this year. After hovering between US$1,800 and US$2,000 in 2023, the price of gold surged in March and April 2024, rapidly reaching US$2,400.
On April 13, Iran decided to strike Israel with 300 drones and missiles following an attack on its diplomatic compound in Syria.
Regional escalation and oil price are at risk. This tail risk cannot be ignored. We are closely monitoring the unfolding situation.
Japanese equities have enjoyed a positive run since the start of the year (+20.8% performance to 27 Mar 2024 ), with the Nikkei recently hitting all-time highs, surpassing the peak of the 1989 bubble .
The US market rally since October is exceptional compared to historical observations. Only once in the last 50 years, in 1989, has the S&P 500 Index risen in 15 of the last 17 weeks.
Research Paper, Johann Mauchand, Alternative Investments, Asset Allocation
Following the strong rebound in financial markets in November and December of 2023, the assets most closely correlated with interest rates have partially retraced their exceptional end-of-year performance.
With the upcoming 2023 Turkish presidential election, scheduled to take place on 14 May, we are sharing our views and sentiments on the possible outcomes and their consequences.
The once-in-a-generation monetary tightening engineered by the US Federal Reserve (Fed) over the past twelve months has produced financial vulnerabilities.
After several decades of riding a government bonds bull market, investors are now looking for alternative drivers of return. Commodity Trading Advisor (CTA) strategies, with their ability to make gains in rising, as well as falling markets, have historically been able to improve risk-adjusted returns when introduced to a balanced portfolio. However, a question that investors can legitimately ask today is how are CTAs impacted by rising interest rates?
As the COVID-19 pandemic weakened its mighty grip, China enjoyed a strong recovery, helped by developed economies’ consumption switch from services to manufacturing products, many of them coming from China.
Following weeks of rising tensions between Russia and Ukraine, Russia’s President Vladimir Putin has recognised the independence of two Moscow-backed regions in the Donbas region in eastern Ukraine.
