Sep 8, 2022 12:07 pm
The inflation talk After relentless selling during the first half of this year, markets rallied hard in July as the Fed remarks were interpreted as more dovish than expected. The bond markets were pricing in a Fed rate cut by as early as February 2023, and equity markets too rejoiced at the prospect; with the…
Read MoreSep 6, 2022 6:28 am
• There are few places to hide from falling markets • Equity and bond market returns become more positively correlated • More inflation lurks within a positive US employment report • ECB likely to increase rates by 75bps even as Russia turns off a gas tap • A new prime minister in the UK, amidst…
Read MoreAug 30, 2022 10:26 am
• Jerome Powell sends a very clear message – rates will be higher for longer • Equity market sell-off could extend • However, longer-dated bonds are well behaved; 10-year looks to hold at around the 3% level • We remain underweight equities and, instead, continue to recommend holding high levels of cash The US financial…
Read MoreAug 24, 2022 5:00 am
• The market is pricing a more aggressive Fed than previously thought. • We expect Fed action and signs of a potential sharp slowdown in US growth to be more challenging for equities than bonds. • Watch to see if institutional buying protects the 3.0% level on the US 10 year government bond yield. •…
Read MoreAug 22, 2022 8:55 am
Quality check of the Sanctum Indian Titans (Titans) Portfolio The result season has concluded, and all our portfolio companies have come out with their earnings. As expected, the raw material price pressure kept eating into the margins of the bulk of companies, despite which, the performance has been quite promising. The commentaries are also comforting…
Read MoreAug 17, 2022 11:26 am
• Better than expected US inflation precipitates another leg of an equity market rebound • Underlying US inflation picture still a concern for economists • Much lower growth and higher inflation still point to a very challenging environment ahead • It’s too easily forgotten that the Ukraine war is ongoing and its impact could worsen…
Read MoreAug 10, 2022 9:48 am
• Markets challenged by central banks determined to squeeze out inflation • The Bank of England delivers a very sobering assessment of the UK economy • The possibility of fiscal easing by a new UK Prime Minister only pressures the BoE to raise rates still further than previously envisaged • Despite higher rates sterling is…
Read MoreAug 5, 2022 5:32 pm
The US FOMC meeting was the highlight of July 2022, where the US Fed chair, Jerome Powell, emphatically denied that the US was in a recession despite two successive quarters of GDP contraction. The Fed raised rates by 75 bps, in line with market expectations, and guided that they would be data-dependent for future hikes….
Read MoreAug 2, 2022 11:25 am
• Equity market rally discounts a re-run of the Goldilocks scenario • We accept the idea that US inflation may be peaking but we fear it will be sticky at around 5%. • We struggle with market’s pricing that the Fed funds rate will peak at the turn of the year • US corporate earnings…
Read MoreJul 26, 2022 11:24 am
• Dollar – few alternatives to the currency at present • Euro – too few positives • Sterling – under pressure from politics and inflation • Yen – likely downside risk until the Fed baulks at recession risk • Swiss franc – has safe haven status backed by a likely positive interest rate by September…
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