What is the single biggest risk facing global markets in 2018? According to Deutsche Bank’s chief international economist the biggest risk is the end of European quantitative easing. The FT has a feature on the potentially profound impact that the end of central bank support will have on bond markets. The coming year promises to be an inflection point for central banks. The Fed has started reducing the pile of the bonds it acquired after the financial crisis — a process that will accelerate. The ECB started to trim its QE programme in 2017 and is expected to end it altogether in 2018. Even … [Read more...]
Archives for January 2018
What Will Pensions Buy in 2018?
Securities valuations are at the highest levels they've ever been. You can see on my price-to-sales ratio chart of the S&P 500 that valuations are higher today than they were during even the dotcom era. While stocks are valued at record levels, the situation in fixed income markets isn't any better. With such high valuations for stocks and bonds, there is nowhere to go for pension funds looking for bargains. Despite the expensive markets, pension funds are still buying assets. Heather Gillers reports in The Wall Street Journal: In the public pension world, the willingness to chase … [Read more...]
The Global Manufacturing Boom Marches into 2018
Purchasing managers indexes from around the world are indicating a global manufacturing boom. The U.S. Markit Manufacturing PMI rose today to 55.1, it's highest reading since 2015. Bloomberg's Fergal O'Brien reports: A slew of Purchasing Managers Indexes published on Tuesday from China, Germany, France, Italy and the U.K. all pointed to deeper supply constraints, with a U.S. gauge to be released at 9:45 a.m. Washington time. Shrinking capacity may mean companies have to hire or invest more to avoid overheating, yet it could also force them to push up prices, propelling inflation … [Read more...]
Happy New Year!
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