Market Insights

The American midterm elections are approaching and the crystal ball gazing has begun. Here’s what investors should consider regardless of whether the US votes for a ‘distilled Donald’, the ‘Democratic double’ or a ‘divided democracy’.

Taking the fear out of FOMO (‘fear of missing out’)

Whether you’re looking at equities, bond yields, currencies or economic strength, it’s the US that’s been leading the charge. Is this likely to continue?

The ‘one share, one vote’ standard has been in place since 1940 but the number of companies with unequal voting rights is on the rise.

Can cyclical tailwinds paper over the structural cracks? And what’s the outlook for global trade, China and equity investors?

While trade tensions have escalated in recent months, we believe the case for emerging markets remains compelling - if investors know where to look.

We expect another strong year for growth with the global economy firing on almost all cylinders. But the market has priced in this optimism, implying greater vulnerability for disappointment. We expect the low interest rate environment to continue into 2018. While interest rates can drift up, we do not think this is the beginning of the end for the bond markets.

In this quarterly outlook we outline our asset allocation views and address three key questions on equities, US monetarypolicy and emerging markets.

Just as the popularity of two-wheeled pedal power has been surging across London, a different type of cycle, the economic kind, has vanished from sight.

A rising China creates the potential for tension between itself and the leading world superpower, the United States. Investors should pay attention to the shifting of global power structures.

The global risk asset rally continued in early 2017, with emerging market investments the star performers.

Monetary support is being tapered despite significant risks. Pressure is building steadily and we think that recent resilience is going to be tested.