Reversion to the mean: a matter of when, not if The new record high of America’s S&P 500 index in nominal terms has revived the debate on the possible overvaluation of stock markets. Equities are seen as totally disconnected from the real economy due to the intended consequences of unconventional monetary policy, specifically the inflation […]
The euro, government debt and Mario Draghi Given that the economic background in the eurozone has remained depressed, the recovery by the euro and European markets since summer 2012 is all the more spectacular. A good example of this divergence is the fact that, while outstanding Italian government debt has risen from one all-time high […]
After the current phase of consolidation of European indices, one of two things can happen. Either we exit this phase on the up, which seems unlikely without the big European names being involved. Or we return to renewed cyclical or political tensions, in which case quality stocks will benefit from their defensive characteristics. Either way, it seems wise not to offload large blue chips.
We have described the current economic cycle as being driven by the technology sector and by innovation. In this respect it echoes the 1990s, which were marked by the growth of the Internet and the mobile telephone. Today, innovation is found on varied fronts.These include the transition from PC to mobile, robotics, the convergence of life sciences and technology, low-cost ‘big data’ processing, electric cars.
At the end of the opening day of Pictet Wealth Management Strategy Committee’s annual seminar at Villars-sur-Ollon in October, our digital screens were all displaying the names of the winners of the 2013 Nobel Prize for Economics. On the one hand, Robert Schiller, a proponent of the theory of investors’ irrationality, was rewarded for his […]
In mid-January, the era of Janet Yellen as Chairman of the US Federal Reserve begins. Her nomination has reassured investors, who see her as providing continuity in the monetary policy of the world’s most important central bank. The Dow Jones Industrial Average, at a new high of over 16,000 at the time of writing, reflects […]
• Editorial outlook: A failure of momentum • Macroeconomics: Economic dynamics favourable overall • Strategy: Cyclical plays to the fore • Headline news from around the world: Monetary policies moving in divergent directions • Asset classes: Risk factors confirmed as taking over as driving forces • Topic of the month: Are hedge funds staging a comeback? […]
Last December, in our investment guidance for 2013, we suggested that the year could be characterised by a decline in the Swiss franc, particularly against the euro. Movements in the first half seemed to confirm this prognosis, since in January and again in May the exchange rate soared above 1.25 (although it failed to stay […]
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