Insights Monthly September 2020
The pattern of market performance since the March lows continued unabated in August: global equities strong, led by the US and within that tech stocks; high yield bonds, emerging market debt and convertible bonds outperforming safe haven government bonds; inflation protected bonds performing well; precious metals strong; and the dollar weak.
Yellow Metal – Green Lights?
Gold has outshone most other investments in 2020, having broken through to new all-time highs in July, surpassing levels last reached nearly 10 years ago. Year to date the bullion price has increased by 27%, trumping all broad equity markets and most other assets – only the tech heavy NASDAQ index has kept pace.
Insights Monthly August 2020
The strength of markets in Q2 continued into July, with the MSCI World index of developed equity markets up 4.8%, global emerging equity markets even stronger, +8.9%, and global government bonds also up, +3.3%. Credit markets benefitted from falling bond yields and rising equity markets, with investment grade bonds +3.3% and high yield +4.7%.
Insights Monthly July 2020
Despite the most significant wobble in bond and equity markets since the trough on 23rd March, risk assets still made further progress in June, extending the recovery to one of the sharpest on record. The MSCI World index returned 2.6%, led this time not by the US but by Europe and Asia, with gains of 3.8% and 8.2% respectively. China was particularly strong, up 9%, driving a return of 7.4% from emerging markets.
Insights Monthly Jun 2020
The world economy has entered its sharpest and deepest recession since the Great Depression almost 100 years ago, yet equities are in the midst of a raging bull market. By the end of May, global equities, as measured by the MSCI World index, had returned 35% from the market bottom on 23rd March, an exact mirror of the 35% decline between the bull market peak on 19th February and the March 23rd low.
Insights Monthly May 2020
The recovery in markets which started in late March, following the massive interventions of the Federal Reserve in the US, and other major central banks, continued through April. This huge monetary stimulus, a combination of interest rate cuts (the only central banks not to cut have been those with rates already at or below zero) together with asset purchases on a scale never before seen, unlimited in the case of the Fed, ECB and Bank of Japan, averted a deep and sudden shock to economic activity from triggering a systemic financial and liquidity crisis. Liquidity, funding and credit stresses eased rapidly and have largely normalised in the past month.