Insight - Markets

A plunge in oil prices has sent markets reeling, but the epidemic is still the main concern.

As the coronavirus spreads the world is experiencing a testing time, and we will undoubtedly face some difficult challenges in the weeks and months ahead as stewards of our clients’ financial futures.

Government budget balances are misunderstood. By politicians — sometimes wilfully — and even by some economists. So it’s no wonder then, if they’re misunderstood by the public.

2019 started with the glass half empty and ended with the glass half full. Then markets were jolted by a US missile attack as the new year began, and chief investment officer Julian Chillingworth ponders whether recent positive signs can become lasting trends in 2020.

Global markets have been focusing on US rate cuts over the past few months. But investors are increasingly looking to governments to stimulate growth, with a record 57% of fund managers saying fiscal policy is too restrictive, according to a recent survey of fund managers by Bank of America Merrill Lynch.

The UK’s first December general election in nearly 100 years punctuated an eventful year for politics and the economy. Financial markets experienced a series of mood swings throughout 2019, but ended on a high as investors regained their appetite for risk. Despite ongoing uncertainty, including Brexit and trade tensions between the US and China, we remain positive about the outlook for 2020.

The yield curve has traditionally been a bond nerd’s playground. It has always struggled to go mainstream. But lately there’s been a lot of talk in the newspapers and on the radio about ‘the yield curve’ and how its ‘inversion’ is tolling our doom.

Investors are galloping from one extreme to the other in all sorts of markets. But nothing is black and white, warns chief investment officer Julian Chillingworth, so investors should try to focus on the longer term effects and ignore short-term craziness.

Trade wars continue to cloud the outlook for businesses and consumers. Closer to home, Brexit uncertainty has gone from bad to worse. Our new Prime Minister Boris Johnson’s first few weeks in office have been pretty spectacular.