US Election
Christopher Peel - Chief Investment OfficerThe eagerly anticipated US Presidential election has finally arrived and the latest opinion polls suggest that the result hangs in the balance. Hillary Clinton appears to have a very slender lead, but the momentum is with Donald Trump and he has narrowed the gap significantly over the last two weeks. The undecided voters will settle the contest and it will come down to one or two key “swing” states such as Florida or Ohio. It is difficult to know exactly how investors will react in the morning, but a Clinton victory is largely priced into the current level of both the US bond and equity markets. A Trump upset would undermine confidence and reintroduce a period of short-term anxiety. Irrespective of the overnight outcome, the US Federal Reserve remains firmly on track to raise interest rates next month and the recovery in the economy is likely to continue unabated. The US is a deeply divided political nation and it will take time to heal the self-inflicted wounds suffered along the grossly elongated campaign trail. The eventual winner will need to rebuild bridges across the country and on both sides of the political aisle.
The acrimony that has shrouded this election process was similarly present in the Brexit campaign. Investors should be prepared for the unexpected, and most importantly remain calm in the coming days before reacting to any knee-jerk market movements.
Recent blogs
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Over the last year the investment team have delivered strong risk-adjusted returns during a period of considerable uncertainty and market volatility.
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The following is an abbreviated version of John Leiper’s article ‘Tide may be about to turn’ for Investment Week magazine. Follow the link and read his views on page 23.
Q2 2021 Quarterly Perspectives
Welcome to the Q2-2021 ‘Quarterly Perspectives’ publication.
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Green Finance Summit 2021
Our Portfolio Manager for ESG, James Peel, was recently invited to provide his valuable insights into “Innovating Towards a Greener Future” as part of the London School of Economics Student’s Union Green Finance Society’s video conference: “Green Finance Summit 2021”.
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In Nothing Is More Powerful Than An Idea Whose Time Has Come, published in November, we introduced the idea of a Great Rotation across US equity markets. As shown in the chart below, this rotation is playing out in textbook fashion with value stocks outperforming growth by about 20% since the end of last year.
The Unemployment Problem
The Fed’s dual mandate is price stability and maximum employment, but Jerome Powell has been unequivocal that it’s all about the latter.
Q1 2021 Quarterly Perspectives
Welcome to the Q1-2021 ‘Quarterly Perspectives’ publication.
Reflections
This is the first blog since the holiday break. Whilst travel restrictions meant it wasn’t the holiday that had been planned, we adapted, and enjoyed the opportunity to spend some time together as a family and reflect on the last few months.
Rise of the Underdog
In its latest economic outlook, the OECD increased its expectations for global GDP.
Let the Good Times Roll
Markets are ebullient, and they have every reason to be.
Is the Bond Market Smarter than the Stock Market?
Following on from last week’s blog, the dramatic rotation from growth to value remains in place for now. Early signs of quick snapback into the prior channel have not yet materialised and instead the ratio has consolidated and even shown signs of moving.
