QuotedData’s economic round up – February 2018 is a collation of recent insights on markets and economies taken from the comments made by chairmen and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned. Kindly sponsored by Martin Currie
The major factors at play over January were a weak US dollar and a strengthening oil price. With the notable exception of the UK, stock markets continued to climb over the month. As we approached the end of January, concern began to build that strong global growth would lead to further interest rate increases and government bond yields rose. This has now manifested itself in a sharp pull-back in markets.
Warnings about expensive valuations, rising inflation and the potential policy responses to that but no long-term gloom.
Mike Brooks and Tony Foster, the managers of Aberdeen Diversified Income & Growth, said that many mainstream asset classes appeared to be expensive. In particular, they saw little value in ‘safe’ assets such as developed market government bonds or investment grade corporate bonds. Richard Killingbeck, chairman of Bankers Investment Trust, cited rising inflation and the reaction of central banks to that as one of the bigger macro issues affecting global markets in the year ahead. He cautioned on global stock markets and currencies. Alex Crooke, the manager of that fund, does not yet see the seeds of a global recession or prolonged market collapse, however. Richard Martin, chairman of F&C Managed Portfolio, cautioned that valuations in the US were stretched but thought that tightening monetary policy in the US had been well flagged.
QuotedData’s economic round up – February 2018