We suggested a couple of months ago that relaxations of Covid-19 lockdowns would soon be reversed as inevitably, with the virus omnipresent, greater interaction would aggravate infection rates. We now face another national lockdown, representing a hammer blow to economic recovery. In our view, previous levels of output will take years to reclaim and the…
The numbers keep deteriorating. Japan’s economy contracted by 7.8% in the second quarter (versus the first quarter) as exports and consumer spending plummeted. Germany’s fell a record 10.1% while the EU average slumped by 11.9%. The US posted a 9.5% decline while the UK delivered an enormous 20.4% contraction, although this could yet be revised…
Jagger and Richards sagely told us that you can’t always get what you want. Harry and Meghan would likely agree, as we suspect, would many investors who signed up for ‘equity income’. Or, to be more precise, a high income derived from equities. This particular corner of the equity market is big business but with…
Are we there yet? Well, wherever we are going, the answer is ‘no’. Stock markets are mechanisms of prediction; arenas where millions of participants’ opinions are distilled into price movements. As a rule, the more uncertainty present, the greater the level of volatility. As markets grapple with when the world will return to some kind…
World stock markets appear to be sanguine regarding economic recovery post the initial shock of Covid-19. Of course, the latter hasn’t gone away and as the experience of Leicester illustrates, the release of lockdown can easily be reversed. Numerous cities around the world have taken similar action as the return to normality, inevitably, provides a…
Very few things in life are predictable; perhaps only death, taxes and the next three Russian presidential elections. The investment industry is based on prediction, which is a pity because it isn’t very good at it. Like a medieval alchemist attempting to transform base metal into gold (again), it is too often fixated with predicting…
Markets remain in capricious mood. Violent changes in sentiment have become common as share prices react to the latest economic news or central banks’ comments. As lockdowns ease, investors are optimistic that a ‘v’ shaped recovery will ensue. To a degree, this will be self-fulfilling as enterprises open for business once more and a significant…
Worldwide, the quarantine that has become strangely normal is starting to be relaxed. The economic damage is already immense and while comparisons with 2008/09 are understandable, what is now unfolding will be noticeably worse. At the time of writing, 15% of the U.S. workforce is unemployed and on some definitions, it is noticeably higher. The…
Unsurprisingly, global markets have remained volatile although they are now considerably higher than the lows reached in late March. Not that long ago, investors wondered when the next recession might strike. As the economic cycle had been artificially extended due to endless central bank intervention in the wake of the financial crisis, it was a…
It has been an astounding few weeks. As I write, the FTSE 100 Index is down 30% in a month while crude oil has halved in value as Russia and Saudi are no longer on speaking terms because the former did not want to adhere to production cuts sought by the latter. As the lowest cost producer,…