Guy Stephens: Markets have ingredients for stagflation cocktail
Rowan Dartington technical investment director Guy Stephens said the US, UK and eurozone tick two of the three boxes that point to a stagflationary resurgence.
Rowan Dartington technical investment director Guy Stephens said the US, UK and eurozone tick two of the three boxes that point to a stagflationary resurgence.
Adversity is best tackled face on, and so the big call this year has been to overweight Europe, despite the uncertain geopolitical picture.
Remembered as England’s “largest and bloodiest” encounter, the Battle of Towton of 29 March 1461 gave the country a new monarch and deepened divisions that would not be healed for decades.
Today’s eurozone data certainly gives investors something to think about. Should the action that follows this thinking be a raising of your European equities weighting?
Eurozone inflation jumped to its highest level since 2013 between November and December 2016, bolstered by strong growth in energy and oil prices.
Eurozone inflation followed analysts’ predictions and continued its steady rise to hit 0.6% in November.
While EU leaders unveiled plans for a new €321m state-of-the-art ‘Europa’ Brussels HQ, over in Frankfurt the ECB was building its own foundations for change.
A bullish mood towards equities is “beyond irresponsible” according to Andrews Gwynne, which also claims investors are burying their heads in the sand over economic woes.
Eurozone investment grade and government bonds continued to see outflows as inflation expectations rose, according to Bank of America Merrill Lynch research.
More than half (54%) of the respondents surveyed by NN Investment Partners expect institutional investors to raise their exposure to emerging market debt over the next three years despite volatility inducing events like a Federal Reserve rate rise and the Brexit aftermath.
Business confidence in the eurozone fell notably over the summer according to today’s update to the European Commission’s Business Climate Indicator.
Neil Woodford believes Brexit would cause crisis in the EU and tremors in the eurozone, but a weaker sterling could ultimately be beneficial to his funds.