May 2024
Global Macro Research from Insight Investment
Please subscribe for the latest Perspectives from Insight Investment.
New World Disorder
There is no guarantee that Trump’s foreign policy goals would be the same as during his previous term in office, but it is reasonable to expect similar levels of unpredictability. To some degree this may be strategic, a deliberate policy to keep negotiating partners on the back foot.
US Election 2024: An early look
What impact will the presidential election have on the US economy? We believe fiscal policy will be the largest difference between the two candidates. In 2025, some provisions from the 2017 Tax Cut and Jobs Act expire. The two sides have differing views on the fate of this fiscal cliff, and so the balance of power in Washington will have meaningful implications for the US outlook.
Asset returns post rate peaks
In our view, for the current market pricing of monetary policy to be correct one of two outcomes must be correct. Either inflation continues to fall quickly or there is a further deterioration in growth. In the case of the latter, the level of valuations means equity markets are likely to be vulnerable to a resulting fall in earnings expectations.
Rising growth but what happens to inflation will be key
The stickiness in inflation and the resultant back-up in yields have delivered a more challenging backdrop for risk assets of late, largely because of the speed with which yields have risen. In that context, a key question is how much further the rates complex will shift.
To be or not to be, that is the recession: Asset allocators hedge their bets
In an article with Trustnet discussing asset allocation approaches during an economic decline, head of multi-asset strategy team, Matthew Merritt said Insight has adopted a barbell approach in the equity portion of its multi-asset portfolios, acknowledging the potential for further upside, as well as the risks on the horizon. “Our equity weighting is above average, and we are mindful that a further lurch up in rates could trigger a larger bout of equity market turbulence. Nevertheless, we are mindful to look for opportunities in such periods with a focus on markets with specific catalysts such as Japan (corporate reform) or laggard markets where we see attractive entry points,” he added.
领英推荐
The AI awakening: Productivity and the future of work
Erik Brynjolfsson, one of the most-cited authors on the economics of information, examines the potential effects that artificial intelligence may produce on economies, living standards and society.
The unexpected resilience of global housing markets
We do not anticipate a housing 'bust' in the near term due to the ongoing mismatch between demand and supply. However, a resurgence of inflation might lower valuations if it forces central banks around the world to tighten policy further.
China: potential growth – lower for longer
What are the consequences of slowing growth in China? We see both the potential for positive and negative scenarios ahead for China, but it is hard to believe that the country won’t face a growth problem given the overwhelming headwinds it faces.
China faces a difficult balancing act managing its currency
Insight's head of currency Francesca Fornasari featured on CNBC’s “Street Signs Asia” programme to discuss her outlook on China's growth, currency, and monetary policy. “We will continue to see the Chinese Yuan remain relatively steady against the U.S dollar,” she said. She also comments on the Bank of Japan's positioning in relation to the Fed rate cuts and the outlook for the dollar-yen exchange rate.
The scientific scrutiny of sustainability
Alex Edmans, Professor of Finance at London Business School, explains how confirmation bias can be a challenge when it comes to sustainability and investment here.
Some of our regular commentaries can be found below
Capital at risk. For professional investors only.
Enjoyed this newsletter?