Global Markets

The IMF upgraded its global growth forecast to 5.5% for 2021, while its 2022 forecast remained unchanged at 4.2%. This move was hardly surprising given the continued stimulus provided by global central banks along with a strong vaccine drive over the quarter. As developed nations are vaccinating at a faster rate than emerging nations, we do expect their economic recovery to mirror this. Economies which are highly dependent on tourism will likely continue to struggle in the face of subdued international travel. Global equities rose on improved vaccine distribution and optimism around robust economic growth to come in 2021. This prompted a further rotation into cyclicals and value stocks. In dollar terms the MSCI world index delivered 4.9% outpacing the MSCI Emerging Market index at 2.3%

Geo-political and economic developments over 2020 have been unprecedented in terms of their scale and magnitude. No one could have foreseen or predicted the course of events that unfolded, with growth in almost the entire global economy being brought to a sudden halt as many countries went into total Covid-19 avoiding lockdown measures. While markets have recovered considerably since their March lows, continued elevated levels of volatility are likely to persist. The fourth quarter of 2020 saw a substantial up-tick in investor sentiment and increased risk appetite which put the US dollar under significant pressure. This relative dollar weakness is so far persisting.  Developed markets gained over the quarter in dollar terms, with November’s performance notably strong due to the vaccine news. Overall, Joe Biden’s win in the US presidential election, the $900 billion stimulus package, and successful vaccine developments,... Read More

U.S. Even though September ended as a down month, overall Q3 was positive. All the major indices improved over the quarter the S&P 500 up 8.2%,the NASDAQ up 11.0% and the Dow Jones Industrial Average up 7.4%. Big Tech (Amazon, Apple, Alphabet, Facebook and Microsoft) counters were some of the best-performing stocks over the past quarter. The Federal Reserve’s use of average inflation targeting suggests that rates could be almost zero bound up to and including 2023. Markets reflected ongoing uncertainty in the later part of Q3 amid a resurgence of the virus in Europe as well as a continuation of the number of new cases in various U.S. States. Adding to the uncertainty is the upcoming Presidential election on the 3rd November with its inherent problems. U.S. unemployment numbers declined down to 8.4% in August from July’s 10.2% and... Read More