QuotedData’s economic round up – September 2017 – is a collation of recent insights on markets and economies taken from the comments made by chairmen and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned. Kindly sponsored by Martin Currie.
As tension rose on the Korean peninsula, gold rallied and the dollar weakened. Emerging markets led the way, helped by favourable numbers from China. Russia and Brazil had a good month. Stronger sterling fed through to a drop in the UK market.
Easy money policies are drawing to an end. Some commentators feel markets are expensive and some see opportunities in emerging markets and value stocks.
Patrick Gifford, chairman of Invesco Perpetual Select, highlights a divergence between an improving economic outlook and the dramatic political scene. He thinks that markets have not yet reached peak optimism. Nick Mustoe, Invesco’s chief investment officer and manager of the global equity income portfolio of Invesco Perpetual Select, says that the US market looks expensive on many measures. Scott Wolle, manager of the fund’s Balanced Risk portfolio, suggests that we might start to see monetary tightening. Harry Henderson, chairman of Witan, says that this is likely to exert upward pressure on bond yields and equity investors will need earnings growth to compensate for this. Kevin Carter, writing in his capacity as chairman of Murray International, favours the developing world over the debt-laden developed world. Teddy Tulloch, chairman of EP Global Opportunities, advises an increasingly cautious stance but foresees a beneficial environment for investors in value-based stocks.
Brexit negotiations are preoccupying UK investors. The election result may be helpful for business.
James Goldstone, manager of Invesco Perpetual Select’s UK equity portfolio, feels that valuations are not overstretched. He thinks that sterling strength/weakness is the key macro factor to watch in the near term. Jamie Cayzer-Colvin, chairman of Henderson Smaller Companies, thinks sterling will remain weak until the way forward for the UK, post Brexit, is resolved. The manager of that fund thinks the election result will mean a more conciliatory stance from UK negotiators. Margaret Littlejohns, chairman of Henderson High Income, believes markets will remain volatile during this period. Andrew Sutch, chairman of JPMorgan Claverhouse, thinks the election result opens up the possibility of a transitional period post Brexit, which he thinks would be business friendly. The managers of that fund also think that this helps the UK’s interest rates stay lower for longer.