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 […]
“They are at again – engaging in willing risk-taking, finding risky deals and creating risky market conditions – it’s time for yet another cautionary memo. Too soon? I hope so; we’d rather make money for our clients in the next year or two than see the bust that gives rise to bargains.” Howard Marks of […]