Can Beijing do enough to maintain the rally?
Fast reading At the most recent Politburo meeting, President Xi Jinping outlined a far-reaching commitment to enact measures that protect the economy, property and equity markets from further deterioration – it was a clear ‘whatever it takes’ statement. Officials have launched a series of fiscal and monetary stimulus measures, but investor enthusiasm has been tempered […]
Investors vote with their feet
Video transcript Presidential election years tend to be very volatile and choppy in the latter stages going into the election. There were two indicators that we’re watching closely. The first is the economy itself. If the economy historically is growing strongly into the election, the incumbent party retains the White House 100% of the time. […]
Rates never sleep
By its nature, bond investing requires patience, and the patience of investors has been tested lately by periods of rapid on/off volatility in bond markets. The third quarter of 2024 provided its share of the same, but ultimately produced the fourth best quarterly result in 34 years as measured by the 5.2% return of the […]
Five areas of uncertainty we are monitoring
Broadly, the market has made limited progress since our decision in early July to cut back equity exposures to a more “cautiously bullish” position from the “aggressively bullish” stance we held in the first half. Indeed, since that move on July 8, the S&P 500 is up just barely 3%, following its double-digit run higher in the […]
Has the inflationary dragon really been slain?
market snapshot
Sky high
The Chicken Little1 predictions that the US Federal Reserve easing cycle would lead to an exodus of assets from liquidity products have been proven wrong. Money market funds across the industry alone have experienced inflows of around US$150bn since the Fed cut rates by 50bps in mid-September to a range of 4.75-5%. It’s another case […]
The China catalyst
Market snapshot
A falling rate environment
Video transcript In a falling rate interest environment, it’s actually on a flow basis, from an assets under management standpoint, a positive situation in the marketplace for money market funds. Despite what has been thought of from a media perspective as being a wall of cash that will start to exit money market funds in […]
School’s in session
With colleges and schools resuming, September always feels like a fresh start. The markets are studying economic data and Federal Reserve communication anew to determine when it will finally ease. In Jackson Hole, Federal Reserve Chair Jerome Powell all but promised he would announce the first cut at the upcoming policy-setting meeting on 18 September. […]
Here we go again
It should be no surprise when the financial markets get ahead of themselves. And we don’t need to be an expert at behavioural economics to know rational investors don’t exist. But that doesn’t make it any less frustrating when traders get over their skis, adding volatility and detracting from liquidity in the market. Just as […]
