Market Insights – December 10th, 2018

Our experts share their market views with you.

Contact us
Typhoon - Elements of this image furnished by NASA

Essentials

US economic activity remained robust in November. The ISM Manufacturing and Services Indexes were both up versus October and exceeded economists’ expectations. They remain at record levels, which rules out the possibility of a recession in the USA over the next 12 months.

Opec and Russia agreed to cut oil production by 1.2 million barrels a day by January in order to bring supply in line with demand. This should stabilise oil prices in the short term. But we will wait for US inventories to decline before adopting a more constructive stance on this commodity.

Japan’s Q3 GDP has been revised down, with a worse-than-expected quarter-on-quarter contraction of 0.6%. This slide was in part driven by a series of natural disasters – including typhoons and an earthquake – although recent economic indicators already point to an uptick in growth in Q4.

Christmas support?

Investors are still in the doldrums – 2018 looks set to be one of the toughest years when it comes to asset allocation, since most financial assets are in negative territory. Long-term European sovereigns are the only saving grace. Lower-quality bonds have underperformed considerably and lost ground over the year. The same is true of emerging-market debt, gold, most commodities and real-estate funds. Not to mention the stock markets, many of which are well in the red. There was a recent surge in optimism, sparked by the Fed’s more moderate tone and the postponing of the next round of import tariffs, but it didn’t last long. The arrest of the CFO of a Chinese telecoms giant served as a reminder that the hatchet has  not been buried in the trade war between the world’s two economic superpowers. For a long time, Wall Street managed to hold off the bear that devoured other global stock markets. But since early autumn, the US stock market has fallen prey to uncertainty and experienced heightened volatility. Last week, for instance, it lost more than 4%, wiping out the previous week’s gains. Yet most indicators point to robust economic growth in the USA. Despite the stock market’s recent disappointments, economic agents remain very confident – consumers, in particular, haven’t been this optimistic about the future for more than 20 years. This confidence is supported by a very buoyant labour market. Although the figure was slightly below expectations, more than 150,000 new jobs were created in the USA in November, continuing the up-
trend that has lasted since 2010. And while the rise in hourly wages remains moderate (3.1% year over year), it is still helping to boost consumer confidence, especially since households have seen their gasoline spending drop considerably as oil prices plunge. These indicators should stop the downward spiral on Wall Street and help to lift investor confidence up from rock bottom. If recent S&P 500 support levels are confirmed (2,600 in October and 2,530 in February), it would be a first step towards narrowing the huge gap between strong US economic data and the disappointing performance recorded by Wall Street and other global stock markets.

Europe: Is an end-of-year rally still possible?

After the Greek crisis, the migrant crisis and the Brexit vote, it would be no exaggeration to say that Europe has had its fair share of tough times. But over the last few months, political uncertainties have returned in Italy, the UK and, most recently, France and Germany. Angela Merkel, who has shown great political leadership in Europe and internationally, announced that she won’t seek a fifth term in office. On the European front, she was supposed to hand things over to Emmanuel Macron. But he, too, is in a sticky position – his approval ratings have plummeted since he brought in unpopular reforms in an attempt to revive France’s sluggish economy. While companies are doing well in the current climate, French consumers have seen their purchasing power diminish. What’s more, social inequalities have become too marked and are undermining the country’s political and social stability.  The “yellow vest” protests clearly demonstrate just what dire straits France is in. It is therefore still extremely difficult – if not impossible – for the country to begin tackling its excessive public spending.

These developments have led to massive fund outflows in Europe this year. Sentiment is so bearish that we think a relief rally may still be possible.

To go deeper

Legal

Ce site contient des informations relatives à un grand nombre de fonds de placement enregistrés et gérés dans différentes juridictions. Les informations de ce site web ne sont pas destinées aux personnes relevant de juridictions dans lesquelles (en raison de la nationalité des personnes, de leur lieu de résidence ou pour toute autre raison) la diffusion ou l’accès à ce site est interdit. Les personnes soumises à de telles restrictions locales ne doivent pas accéder à ce site web.
Les informations publiées sur ce site ne constituent ni une sollicitation ni une offre, ni une recommandation d’achat ou vente ou de toute autre transaction sur des instruments de placement.

Même si ce site reprend une large sélection de fonds à disposition, il n’englobe pas tous les fonds actuellement disponibles sur le marché. Dès lors, il peut exister des fonds correspondant mieux aux besoins de placement de l’utilisateur, mais qui ne figurent pas sur ce site. L’utilisateur doit être conscient du fait que les prix des parts de fonds de placement peuvent fluctuer vers le haut et vers le bas. En conséquence, la performance passée n’est pas une garantie de la performance future. Par ailleurs, les placements en devises différentes sont sujets aux fluctuations des taux de change.
Avant d’effectuer tout investissement dans un placement collectif, l’utilisateur doit lire impérativement et attentivement les prospectus de vente et les informations clés pour l'investisseur (KIID). Les prospectus et KIIDs des fonds sur ce site sont disponibles sur ce site, mais peuvent également être demandés gratuitement, auprès de Piguet Galland & Cie SA ou de la direction de fonds. L’utilisateur s’engage à lire les clauses de non-responsabilité relative à chaque fonds avant d’effectuer un placement.

Les membres du conseil d’administration ou les collaborateurs de Piguet Galland & Cie SA peuvent détenir ou avoir détenu des participations ou des positions dans les fonds considérés ou peuvent être actifs ou avoir été actifs en tant que teneurs de marché pour ces titres. Par ailleurs, les membres du conseil d’administration ou les collaborateurs de Piguet Galland & Cie SA peuvent entretenir ou avoir entretenu des relations avec les sociétés concernées, peuvent offrir ou avoir offert des services de financement d’entreprise ou autres à ces sociétés ou peuvent siéger ou avoir siégé dans leur comité directeur.
Veuillez préalablement prendre connaissance des Conditions d'Utilisation du Site.

Maecenas consequat purus orci, nec bibendum massa lobortis imperdiet. Vestibulum vel urna efficitur, hendrerit felis sed, interdum enim. Aenean aliquet urna libero, eu posuere arcu volutpat eu. Pellentesque ut metus imperdiet, consequat velit sed, egestas augue. Interdum et malesuada fames ac ante ipsum primis in faucibus. Praesent convallis neque vitae tempor volutpat. Maecenas scelerisque semper dolor id cursus. In vitae justo in eros ornare hendrerit et id tellus. Suspendisse posuere nisl non consectetur consequat. Morbi egestas nunc et nisl dapibus, a consectetur lacus lacinia. Etiam feugiat ante eget luctus varius. Curabitur rutrum, velit eget molestie molestie, ipsum arcu ornare tortor, faucibus congue arcu est eu risus. Sed ut tellus dui. Phasellus feugiat quis ligula eu pretium.

Personal informations
Nos services n'étant disponibles qu'aux résidents suisses, le choix du pays de domicile n'est pas disponible.
You must accept the terms of use.
* required fields