Growth is gradually normalising as cyclical weaknesses abate, and we expect fairly healthy rates of economic growth in developed economies in 2016. Moreover, we believe that an innovation shock could boost growth in the coming years — and indeed that a technological innovation shock has already begun, although its effects are still concentrated on certain sectors for now.
Since 2009, major central banks such as the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BoJ) and others have largely determined the trends in the major asset classes of both emerging and developed countries: equities, sovereign and corporate bonds, and currencies. Investors found their guiding light in the central banks. […]
The Vix, a widely used measure of equity-market volatility, was in a systemic risk regime for 15 days this year, compared with just two days in 2014 and none at all in 2013, as shown by the chart below. This year’s experience of volatility is still not extensive in a historical comparison, but it still […]
We view recent developments on Chinese markets as a sharp correction rather than the start of a long-term bear market. In the meantime, the economic recovery in the US and the euro area continues to gain traction. Recent developments in China need to be seen in the context of long-term economic trends. China is in […]
One answer to cope with political uncertainty: diversification Comparing investors to tightrope walkers is obvious: both are constantly striving to perform a tricky balancing-act. When making decisions, investors are seeking to find the ideal balance between generating a good return and shouldering risk against a backdrop of uncertainties.The two crises involving Greece and China remind […]
The third mandate of the Federal Reserve For several years in our Secular Outlook, we have highlighted a change in the way developed-country central banks conduct monetary policy – nowadays taking into account the price of both fixed and circulating assets. We describe this trend as targeting asset prices. The crisis of 2008 demonstrated that […]
Jean Monnet, in the aftermath of the Great Depression and well before he made his central contribution to realisation of the European ideal, remarked: “People only accept change when they are faced with necessity, and only recognise necessity when a crisis is upon them”. Shock-waves from the two major systemic crises of the last decade […]
The merits of private equity Depending on the example taken, private equity (shares in unquoted companies) is seen as either an opaque and expensive investment for an unpredictable outcome, or as a safe and compelling investment that allows one to invest in known companies with a clearly identified economic function over which one exercises control, […]
Should investors cross the Atlantic? With an increase of up to 20% in certain indices, equity markets in the eurozone began 2015 with a bang, leading many investors to wonder if it might be sensible to reduce their US equity allocation in favour of European stocks. Quite a few have already taken the plunge, as […]
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