From the monthly archives: December 2019
We are pleased to present below all posts archived in 'December 2019'. If you still can't find what you are looking for, try using the search box.
Recession risk remains heightened though the odds of one forming have dropped as the economic data shows signs of stabilising. The consumer is holding up and index of Leading Economic Indicators may be about to turn up as base effects kick in. PMIs remain soft, particularly in manufacturing but at least trajectory is less worrying. The yield curve has normalised but this provides no comfort – it always has done ahead of a US recession, which has typically lagged an inversion trough by12-18months. We can only wait with fingers crossed.
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As you will be aware, the Conservative Party won the election by a large majority. Sterling has strengthened materially in the foreign exchange markets this morning and the UK stock market has risen. Investors are relieved that Corbyn and his Marxist agenda has been roundly rejected by the electorate. Markets also benefited from the overnight news that the US appears close to agreeing a 'phase one' trade agreement with China, stock markets in the Far East and in Europe have also risen this morning.
At last, the UK has a strong government with a clear mandate to get Brexit done. We expect the UK to leave the EU by 31st January, though the transitionary period will probably have to be extended beyond December 2020. We, and other investors, are now considering whether this brings sufficient certainty to justify lifting exposures to UK assets.