As an active manager of high-grade bonds, we continue to focus on the moves of the US Federal Reserve. The Fed remains resolute on its path of increasing short-term rates into the zenith of the US economic cycle, and as the world gorges contently on debt. Show More
While absolute valuation has limited use for timing cyclical bull and bear markets, it does provide insights into market sensitivities to challenging (or indeed positive) economic environments. Added to that, relative valuation can be particularly insightful – especially as a key building block for allocating between asset classes and geographies.... Show More
In our first monthly letter for the year, we highlighted that 2018 was unlikely to be a ‘set and forget’ year for investment strategy. As we approach the second half of 2018, macro uncertainty and cascading geo-political risks continue to impact markets and seem likely to befriend us for the... Show More
April was a very interesting month in respect of the continuing pressure on the price of financial assets. Globally economic data moderated over April which has been framed as an expected deceleration from the exceptionally strong pace of Q417, however if we look at the macro economic surprise indices which... Show More
Over the past month our leading indicators of the industrial cycle have shown signs of peaking. The real question is whether this suggests the industrial cycle is merely temporarily interrupted and rapid global growth will soon return; whether we are through the fastest phase of acceleration in the cycle, and... Show More
On the 9th March 1987 U2 released the Joshua Tree, the fastest selling British Album of all time that went on to sell over 25 million copies. Joshua Tree is still acclaimed as one of the greatest albums of all time. Interestingly Bono considered pulling the album prior to its... Show More
Have you ever pushed the limit? Sure you have, just that little bit further, just that little bit faster. It’s the secret to success. But also sometimes disaster… Perhaps nowhere is breaking that limit as obvious as on a race track. Yet how many of us, as amateurs, love to... Show More
It was February 4th, 1994, and I was on a plane to LA from Sydney. I was treating myself to 4-week holiday skiing in Aspen and then on to New York; 1993 had been a good year. Initially when my boss, Richard Farleigh, had resigned 10 months earlier I wasn’t... Show More
It’s the time of year we typically take stock – both personally and professionally. And if you are reading this, presumably financially as well. And we make our New Year resolutions! Of course, we joke about NY resolutions, because so many of us fail to keep them. So why make... Show More
In 1989, I was hired by Bankers Trust as a graduate to work at the Sydney Futures Exchange. I pulled on the colourful jacket and went into the “pits”. It was heady and exciting times, and opportunities presented quickly. Within 6 months, I was trading the biggest book on the... Show More
Asset markets are running on a high and investors risk appetites are growing, it seems like the shadow of the GFC has finally faded and the boom is back on. With interest rates still near generational lows, subdued inflation, and improving business conditions, it’s easy to see why investors are... Show More
Sir John Templeton famously said; “bull markets are born on pessimism, grow on skepticism, peak on optimism and die on euphoria.” With the S&P 500 hitting new highs, and growth returning around the world, it’s natural to question how far along the path we are today. Show More
Most of the time only a few things really matter with respect to the outlook for the global economy. If one can work out what those key debates are, and how they resolve themselves, then the asset allocation and investment decisions should fall out of that analysis. Show More
As global rates start to rise, Australia may follow in the short-term, but structural issues will prevent the RBA from hiking rates far, explains Chris Watling, CEO of Longview Economics. Any rate-hikes from the RBA will be short-lived, he says, and those structural issues will force Australian rates to zero. Show More
We are used to the experience of economic developments influencing and sometimes determining political events. This past year we have seen political events influencing markets and economic forecasts more than usual. The rise of the populists as a reaction to the specific disaffection with wage stagnation, immigration and terrorism is... Show More
Let's first consider the broader global economic environment, in particular, the macro drivers of a “globally co-ordinated” gradual improvement in economies which are continuing to evolve. The primary driver of markets, at this point in time, is globally accommodative monetary policy, which underpins economic expansion and the rise in financial... Show More
Just wanted to quickly share this chart - it shows consumer sentiment across developed and emerging economies (GDP weighted) using the Reuters/Ipsos Consumer Sentiment Indexes. The chart (from my latest report) shows a clear trend towards new highs in consumer confidence for developed economies, and while emerging markets stumbled in... Show More
Evidence from Fidelity’s 2017 Analyst Survey suggests that the global reflation/recovery is in full swing. Demand, capex expectations, and consumer sentiment are picking up, while the first signs of inflation in prices and wages are beginning to show up. Fidelity’s Analyst Survey draws on the 17,000 meetings our analysts conduct... Show More
The latest round of manufacturing PMIs confirm the signal previously flagged in the 2016 End of Year Special Edition of the Weekly Macro Themes http://www.topdowncharts.com/2016-special-edition that 2017 could see an upturn in global trade growth. If this does happen it will be against most people's expectations as political risks from... Show More
As a holiday treat we're making the 2016 End of Year Special Edition of the Weekly Macro Themes available for free: http://www.topdowncharts.com/2016-special-edition This edition looks at some of my favorite charts and themes of the year from the weekly report, including the charts that worked (and those that didn't... Show More
