New article from Tatton Investment Management: Delicate equilibrium
8 June 2018
One week after Italy’s disruptive reminder that capital markets are still quite sensitive to the wrong sort of news, equity and bond markets returned to much quieter waters. Italian bond yields remain more elevated compared to other Eurozone countries than they have for a long time and this might not change for a while.
All the more important for the Eurozone and the EU as a whole then that German chancellor Angela Merkel finally put her EU reform proposals forward in the form of a newspaper interview. Strangely, they received little international attention, even though they had been eagerly awaited ever since France’s Emmanuel Macron shared his grand vision 8 months ago.
While she somewhat bluntly rejected a debt union – which would be the natural and most stability instilling next step for the lose currency union – she did make quite detailed alternative proposals, which may be more achievable than a grand vision anyway.
Namely, the conversion of the existing European stability mechanism and fund into a European IMF in all but name. This could prove to be what it takes to make the sensitive Eurozone construct more resilient against future crises. It would provide a proper framework for the extraordinary emergency measures the ECB was forced to apply under Mario Draghi’s ‘whatever-it-takes’ leadership to avert the last Eurozone crisis, and thus prevent it from reoccurring in the first place.
Perhaps even more important in fighting the cancer of populism across Europe could be her initiative to work towards a common immigration and asylum policy, to be enforced through a joint European border force. If such a policy shift succeeded, then it would even have the potential to remove a number of highly controversial Brexit red lines.
Speaking of the dreaded Brexit, it appeared to us as though the UK moved yet further away from an actual March 2019 exit from the EU. First, Labour’s swing towards demanding the government assured ‘full access’ of the UK to the EU market, and then the government’s agreement of a back-stop plan of remaining in the customs union should it be impossible to reach a new free trade accord in time.
A BINO (‘Brexit in name only’) environment would move the potential economic cliff edge further into the future, and would therefore be preferential for the UK economy compared to a 2019 exit without a well-defined trade framework. Nevertheless, the uncertainty is increasingly a drag on the UK’s economy and the fragile balance this creates between the currency markets, UK interest rates and the property market (!) is something we are discussing this week in a separate article.
From the global political perspective, trade also remains centre stage, as the G7 heads of state gather in Canada. It will be interesting how Trump will fare in what is expected to be a hostile environment towards him, given it is the US consumers who will be hit by the imposed tariffs. Given the relative strength of the US economy at the moment, Trump’s measures may also lead to an even larger current account deficit, which we discuss in our third article this week.
If it was not for political risks, we would be looking increasingly optimistic towards the summer months. Economic data flow continues to confirm that the global economy continues to prosper, even if it is no longer doing so in quite as synchronised a manner. Europe has cooled from unsustainable boom back to a far more sustainable speed of expansion, while China remains stable and the US is now running at Europe’s speed of last year. This will result in another 0.25% rate rise by the US Fed central bank next week. The general tightening of financial conditions that this causes, together with the uncertainty and trade headwinds Trump feels obliged to introduce, could soon slow the rate of expansion there in the same way Europe slowed when the Euro strengthened.
Oil has become slightly less of a concern over the past week, because the predictable supply increase on the back of the higher prices has become evident. As a result, further oil price upside now appears capped, despite the likely fall in future supply from Iran and Venezuela.
This leaves the further global economic expansion in a delicate equilibrium between further improving business sentiment, the return of more normal (albeit tighter) monetary conditions and the risk of collateral damage from Trumplomacy.
The much predicted ‘Sell-in-May-and-go-away’ market sell off pattern has passed us by and, on the basis of the stable and measured global economic expansion, we expect a similar medium-term path for equity markets. Sadly, this may well be interspersed with bouts of volatility, as politicians grapple to establish a new world order in which the USA and China play very different roles compared to the past we have known.
News Archive
18 December 2020
New article from Tatton Investment Management: Goodbye to all that
14 December 2020
New article from Tatton Investment Management: Outlook 2021 - no deal Brexit?
4 December 2020
New article from Tatton Investment Management: December concerns over baubles and bubbles
27 November 2020
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20 November 2020
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18 November 2020
Interim Results For The Six Month Period Ended 30 September 2020
13 November 2020
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6 November 2020
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4 November 2020
New article from Tatton Investment Management: US Election Update
2 November 2020
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30 October 2020
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26 October 2020
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19 October 2020
New article from Tatton Investment Management: Watching and waiting
12 October 2020
New article from Tatton Investment Management: Baffling market optimism
2 October 2020
New article from Tatton Investment Management: A question of time horizons
25 September 2020
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18 September 2020
New article from Tatton Investment Management: Taking a step back to look forward
14 September 2020
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7 September 2020
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1 September 2020
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24 August 2020
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17 August 2020
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10 August 2020
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2 August 2020
New article from Tatton Investment Management: Sunshine and shadows
27 July 2020
New article from Tatton Investment Management: PPE = Politics, Pressure and Economics
20 July 2020
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13 July 2020
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3 July 2020
New article from Tatton Investment Management: H1 2020 offers meaningful lessons
29 June 2020
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22 June 2020
New article from Tatton Investment Management: Equity valuations follow bond valuations' lead
15 June 2020
New article from Tatton Investment Management: Stock markets suffer altitude sickness
8 June 2020
New article from Tatton Investment Management: Markets are enjoying an uncomfortably benign pandemic
1 June 2020
New article from Tatton Investment Management: Optimistic markets despite second wave lockdown threa
26 May 2020
New article from Tatton Investment Management: Just as the sun comes out, clouds appear in the East
22 May 2020
New video from Tatton Investment Management
18 May 2020
New article from Tatton Investment Management: Us-China cold war: Threat or blessing?
11 May 2020
New article from Tatton Investment Management: Most welcome, if feeble, signs of pulling together
4 May 2020
New article from Tatton Investment Management: Opening-up will be slower than locking down
27 April 2020
New article from Tatton Investment Management: V or U-shaped recovery scenarios - the jury is out
20 April 2020
New article from Tatton Investment Management: Lifting lockdown remains a delicate balancing act
20 April 2020
New video from Tatton Investment Management: Stock markets between hope and despair
15 April 2020
New video from Tatton Investment Management: Is now the time to invest?
13 April 2020
New article from Tatton Investment Management: Fading threat of financial crisis re-opens old divide
6 April 2020
New article from Tatton Investment Management: Unprecedented quarter or calm before the storm?
30 March 2020
New article from Tatton Investment Management: Extraordinary: bear and bull market all in one
24 March 2020
New video from Tatton Investment Management: Why have stock markets appeared to rally on the lock-do
23 March 2020
New article from Tatton Investment Management: Government ordered recession
19 March 2020
New video from Tatton Investment Management: Confusion reigns in Capital Markets
18 March 2020
New article from Tatton Investment Management: Why aren't you doing something?
17 March 2020
New video from Tatton Investment Management: From euphoric recovery to depressed tumble
16 March 2020
New article from Tatton Investment Management: Notes on a crash: the short, the medium and long term
13 March 2020
New video from Tatton Investment Management: Panic equity selling or panic raising of precautionar
12 March 2020
New article from Tatton Investment Management: Forced sellers and other distractions
9 March 2020
New article from Tatton Investment Management: Dark times or glimpse of light at the end of the tunn
6 March 2020
New article from Tatton Investment Management: News of a reverse oil price shock rattles markets bey
2 March 2020
New article from Tatton Investment Management: Coronavirus - hitting too close to home
28 February 2020
New article from Tatton Investment Management: This week's market correction requires perspective
26 February 2020
New article from Tatton Investment Management: COVID-19 and the reaction of markets to pandemic fear
24 February 2020
New article from Tatton Investment Management: US markets hit new all-time highs and a 'bump'
17 February 2020
New article from Tatton Investment Management: V-shaped recovery for Valentine
10 February 2020
New article from Tatton Investment Management: Markets show no fear - should they?
3 February 2020
New article from Tatton Investment Management: Looking through the noise of the week
27 January 2020
New article from Tatton Investment Management: Short break to Goldilocks?
20 January 2020
New article from Tatton Investment Management: Parallels and differences to January 2018
14 January 2020
13 January 2020
New article from Tatton Investment Management: So far so good
8 January 2020
Tatton: Woodford & M&G suspensions have driven IFAs to us
6 January 2020
New article from Tatton Investment Management: 2020 starts with a Trump card
23 December 2019
New article from Tatton Investment Management: Goodbye 2019 - welcome 2020 and a new decade!
16 December 2019
New article from Tatton Investment Management: Brightening horizons - 2020 Outlook
8 December 2019
New article from Tatton Investment Management: Can Trump derail the 2020 economic upturn?
2 December 2019
New article from Tatton Investment Management: Markets are driving the markets
25 November 2019
New article from Tatton Investment Management: Markets pause for reality check
18 November 2019
New article from Tatton Investment Management: Swilling cash eases the market mood music
11 November 2019
New article from Tatton Investment Management: Recession concerns retreat
11 November 2019
Interim Results for the six months ended 30 September 2019
4 November 2019
New article from Tatton Investment Management: Crucial October period safely behind
28 October 2019
New article from Tatton Investment Management: Slowly turning
21 October 2019
New article from Tatton Investment Management: Brexit breakthrough versus Brexit fatigue
17 October 2019
17 October 2019
Acquisition of Sinfonia Asset Management Limited (SAM)
14 October 2019
New article from Tatton Investment Management: Market sentiment rebound
7 October 2019
New article from Tatton Investment Management: Stall speed economy fears spreading
30 September 2019
New article from Tatton Investment Management: Ominous US-Dollar strength
23 September 2019
New article from Tatton Investment Management: Diverging economic trends - catalyst for trade war re
16 September 2019
New article from Tatton Investment Management: Market sentiment rebound
9 September 2019
New article from Tatton Investment Management: Choppy water but no storm, yet...
2 September 2019
New article from Tatton Investment Management: Fattening 'tails'
27 August 2019
New article from Tatton Investment Management: Populism politics reversing austerity?
19 August 2019
New article from Tatton Investment Management: Market spat between bond and equity markets
11 August 2019
New article from Tatton Investment Management: Bond markets unnerve equity markets - again
5 August 2019
New article from Tatton Investment Management: The Elephant and the Little Old Lady
29 July 2019
New article from Tatton Investment Management: The quick and the not-so-quick
22 July 2019
New article from Tatton Investment Management: ...'Twere well it were done quickly
15 July 2019
New article from Tatton Investment Management: Positioning for a summer of wait and see
8 July 2019
New article from Tatton Investment Management: Liquidity drives stock markets to new highs
1 July 2019
New article from Tatton Investment Management: The middle of the year - a tipping point?
24 June 2019
New article from Tatton Investment Management: Battle of the ‘doves’
17 June 2019
New article from Tatton Investment Management: Mixed messages
10 June 2019
New article from Tatton Investment Management: The return of the central bank put?
3 June 2019
3 June 2019
Appointment by Frenkel Topping
3 June 2019
Preliminary Results For the year ended 31 March 2019
3 June 2019
New article from Tatton Investment Management: Bond rally musings
27 May 2019
New article from Tatton Investment Management: It is getting warmer
20 May 2019
New article from Tatton Investment Management: Market support for Trump or unwarranted equanimity?
13 May 2019
New article from Tatton Investment Management: Geopolitics re-enter market stage
7 May 2019
New article from Tatton Investment Management: Central banks disappoint expectations
29 April 2019
New article from Tatton Investment Management: Waning market stimuli put stock markets on notice
23 April 2019
New article from Tatton Investment Management: Spring time from here?
16 April 2019
Trading Statement for 12 months ending 31 March 2019
15 April 2019
New article from Tatton Investment Management: Brexit in-limbo aside sentiment is improving
8 April 2019
New article from Tatton Investment Management: Happy 10th birthday, choppy bull market
1 April 2019
New article from Tatton Investment Management:29 March 2019 – quarter end
25 March 2019
New article from Tatton Investment Management: Brinkmanship and extensions
18 March 2019
New article from Tatton Investment Management: Bits & Pieces
11 March 2019
New article from Tatton Investment Management: ECB stimulus U-turn leaves markets unimpressed
4 March 2019
New article from Tatton Investment Management: £-Sterling ‘applauds’ prospect of Brexit delay
25 February 2019
New article from Tatton Investment Management: Progress?
18 February 2019
New article from Tatton Investment Management: Investment perspectives for different Brexit outcomes
15 November 2018
Interim Results for the six months ended 30 September 2018
15 October 2018
New article from Tatton Investment Management: Autopsy of a stock market sell-off
1 October 2018
New article from Tatton Investment Management: Poor politics containing bond market risks?
27 September 2018
New article from Tatton Investment Management: Brexit clamour vs. real market new
7 September 2018
New article from Tatton Investment Management: Interesting times ahead
31 August 2018
New article from Tatton Investment Management: “Not the end of the world”
24 August 2018
New article from Tatton Investment Management: Steady markets vs. noisy politics
17 August 2018
New article from Tatton Investment Management: Political strongman tactics come home to roost
10 August 2018
New article from Tatton Investment Management: Summer heat wave makes way for return of political he
3 August 2018
New article from Tatton Investment Management: A gentle deceleration?
27 July 2018
New article from Tatton Investment Management: Hot air for a hot summer?
20 July 2018
New article from Tatton Investment Management:Earnings are growing, why worry?
13 July 2018
New article from Tatton Investment Management: Hard Brexit demonstration potential?
6 July 2018
Notice of Annual General Meeting
6 July 2018
New article from Tatton Investment Management: It is getting hot
29 June 2018
New article from Tatton Investment Management: Digesting or consolidating?
27 June 2018
Preliminary Results for the year ended 31 March 2018
22 June 2018
New article from Tatton Investment Management: Fragile recovery
15 June 2018
New article from Tatton Investment Management: No surprises
8 June 2018
New article from Tatton Investment Management: Delicate equilibrium
1 June 2018
New article from Tatton Investment Management: Ignore politics at your peril
25 May 2018
New article from Tatton Investment Management: GDPR? No - far more interesting news!
18 May 2018
New article from Tatton Investment Management: What's the economic reality of this week's news?
11 May 2018
New article from Tatton Investment Management: Batten-down-the-hatches?
4 May 2018
New article from Tatton Investment Management: Past the peak?
27 April 2018
New article from Tatton Investment Management: Confusing signals?
20 April 2018
New article from Tatton Investment Management: A mixture of messages
6 April 2018
New article from Tatton Investment Management: Could do better
6 April 2018
New article from Tatton Investment Management: Peaking, plateauing or dimming – and how about that
29 March 2018
New article from Tatton Investment Management: End of a stormy quarter
23 March 2018
New article from Tatton Investment Management: Now we know it's risky!
16 March 2018
New article from Tatton Investment Management: Back to Normal?
9 March 2018
New article from Tatton Investment Management: Tariffs to growth
2 March 2018
New article from Tatton Investment Management: Time to take some profits
23 February 2018
New article from Tatton Investment Management: Change of direction or gradual normalisation?
16 February 2018
New article from Tatton Investment Management: Breathing easier for the moment
9 February 2018
New article from Tatton Investment Management: Meteoric stock markets crash bac
6 February 2018
Tatton Investment Management's Stock Market Correction Assessment
2 February 2018
New article from Tatton Investment Management: Good news turns bad news - again!
26 January 2018
New article from Tatton Investment Management: Surprises
19 January 2018
New article from Tatton Investment Management: US$ weakness versus Bitcoin and Carillion
12 January 2018
New article from Tatton Investment Management: Bullish sentiment rings alarm bells
5 January 2018
New article from Tatton Investment Management: Encouraging kick-off
15 December 2017
New article from Tatton Investment Management: 2017 - taking stock
8 December 2017
New article from Tatton Investment Management: Progress versus Bitcoin
5 December 2017
Interim results for the six months ended 30 September 2017
1 December 2017
New article from Tatton Investment Management: Sudden, but not entirely unexpected
24 November 2017
New article from Tatton Investment Management: Invincible markets?
17 November 2017
New article from Tatton Investment Management: Yield-curve flattening: a bad omen?
10 November 2017
New article from Tatton Investment Management: Nervous investors herald more volatile markets
3 November 2017
New article from Tatton Investment Management: UK rate rise: ‘one and done’ or beginning of rate
27 October 2017
New article from Tatton Investment Management: Trick or treat season
13 October 2017
New article from Tatton Investment Management: All-time highs and Q3 results outlook: Reasons to be
6 October 2017
New article from Tatton Investment Management: Bad news – good news
29 September 2017
New article from Tatton Investment Management: Movements
22 September 2017
New article from Tatton Investment Management: QT to reverse QE and 2-year transition period to soft
15 September 2017
New article from Tatton Investment Management: BoE guides for year-end rate hike - Bluff or real?
8 September 2017
New article from Tatton Investment Management: ‘Back to school’ amidst hurricanes, earthquakes
1 September 2017
New article from Tatton Investment Management: Bad news, Good news
25 August 2017
New article from Tatton Investment Management: Summer low or summer lull?
18 August 2017
New article from Tatton Investment Management: More sellers than buyers
11 August 2017
New article from Tatton Investment Management: Stocks take note of North Korea crisis - or do they?
4 August 2017
New article from Tatton Investment Management: Consolidated base but momentum dwindling
28 July 2017
New article from Tatton Investment Management: Summer thoughts about the ‘longer term’
21 July 2017
New article from Tatton Investment Management: Summer lull - delayed
14 July 2017
New article from Tatton Investment Management: Pre summer-holiday investment check
7 July 2017
New article from Tatton Investment Management: Global growth ploughs on while markets take a breathe
23 June 2017
New article from Tatton Investment Management: Quo Vadis Britain?