Crossmonthly A monthly roundup of everything you need to know

July is typically a good month for risk assets and this year was no exception. Equities mostly had a better month with strong Q2FY18 results helping S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) gain over 3.5% and close to 5% respectively. NASDAQ rose just over 2% but for US IT, some of […]

Whilst markets ignored recent trade worries, disunity between USA and the rest of the world is becoming ever starker. This ranges from climate change, to the Iranian nuclear deal, and to trade, as Trump continues to destroy trust in the USA as a reliable partner. The USA was the guardian of the post-WW2 move towards […]

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The sharp moves in the S&P 500 causing it to test the 200DMA (Chart 1) and last year’s ‘FANGs’ leaders now in free-fall, make us re-examine our US equity base case. We expected S&P 500 to test 2,950-3,000 in the first half of 2018 on positive GDP surprises and robust Q1 earnings likely to beat […]

Our base case is supportive of risk assets in the first half of 2018 , given rising earnings forecasts and stronger global GDP growth estimates. We think SPX will test the 3,000 level and we see upside in other equity regions including AXJ helped by the PRC’s probable inclusion in MSCI in May, and a […]

Is this a “squall” or is it something worse? The recent falls have clearly been very powerful and sharp with the US registering the largest one-day market falls since the Global Financial Crisis. Volatility has shot up with the widely followed VIX index almost tripling. It is no surprise that global equity markets all fell […]

December was the month that the Trump administration finally passed some meaningful legislation with the new tax plans approved by both House and Senate. In addition, the US recognised Jerusalem as the capital of Israel leading to the passage, by a vote of 128-9, of a UN resolution condemning the US. The US then announced […]

Politics dominated the month once again as US tax reforms and Brexit negotiations took centre stage. This month also saw OPEC agreeing to an extension of production cuts through 2018 and China tightening financial regulation in an attempt to deleverage. Risk sentiments were mixed as the market weighed between political uncertainty and positive economic growth.

The month of October provided a number of political events: Abe’s successful snap election; Xi Jinping’s consolidation of power with no apparent heir, along with the newly formed standing committee in the 19th CCP Congress; and the resolution of the Catalan crisis that saw its President ousted by the Spanish government.

September was another month in which political risks were centre-stage: US-N.Korea ‘war of words’; the German election; UK PM May’s apparent compromise offer to the EU; Abe’s call for a snap election next month. Whilst N.Korea’s missiles and invective resulted in a short-term spike in volatility, markets mostly digested it and moved higher. The German […]

Last month illustrated, again, that August is often a poor month for equities. Indices only just climbed into positive territory in the last 2 days, with ACWI up 40bps month on month and SPX up just 10bps, STOXX 50 off 80bps and Nikkei 225 -1.4%. Volatility picked-up as VIX spiked twice during the month to […]