| 04/08/2010 | Monthly Markets Review August 2010 (60 KB)
- Following a volatile second quarter, revived risk appetite supported global equity gains in July. Fears of a recovery slump gave way to improved sentiment about the strength of global growth, following some better-than-expected economic data and well-received results from the European bank stress tests.
- European economic data was broadly positive, with a weaker euro driving export-led growth in Germany. Manufacturing data surprised to the upside, as did business and consumer confidence indicators. Although there remained some scepticism about the credibility of the bank stress tests, the results have at least dampened any immediate concerns about peripheral eurozone sovereign debt profiles. Sentiment was similarly positive in the UK as investors increasingly taking the view that the bad news has now been reflected in market valuations; while British manufacturing output continued to grow strongly in July.
- Economic indicators in the US and Japan were more mixed. US domestic demand faltered and higher unemployment in Japan weighed on sentiment; contrasting with solid corporate earnings and general relief in the wake of European bank stress tests.
- Commodities outperformed on the back of rising oil and base metals costs, signaling that, despite lingering concerns about slowing growth, the global economic recovery remains on track.
|
| 28/07/2010 | Quarterly Markets Review Q2 2010 (62 KB)
- The MSCI World Index ended a volatile quarter in negative territory, after the positive momentum, driven by strong earnings results in the first quarter, gave way to revived fears of a recovery slump.
- Concerns that Europe would lead the world into a double-dip recession spurred share price declines across the globe, and marked a sharp reversal in the risk trading that fuelled positive returns in the first quarter. The market volatility sent investors fleeing from equities into the safe haven assets, such as gold and US Treasuries.
- In Asia, downwardly revised Chinese data further compounded the global equities sell-off, propelling the 10-year Treasury yield below 3%. Crude oil suffered its first quarterly decline since the end of 2008, and iron ore has fallen 27% since its peak in April, due to slowing Chinese steel production as demand has weakened in the wake of tighter monetary policy.
- European leaders hammered out a rescue package, while individual countries unveiled sweeping austerity packages to help rein in sovereign debt. The euro continued to slide against the dollar and German consumer confidence levels weakened. However, investors welcomed better-than-expected manufacturing data.
- In the US, reports of sluggish growth in the first quarter dampened risk appetite – new home sales tumbled after a tax credit expired and unemployment continued to dampen household spending, but unemployment figures registered a slight improvement from May to June.
|
| 31/05/2010 | Monthly Markets Review May 2010 (62 KB)
- The MSCI World index delivered a negative return in May against a background of heightened concerns about eurozone sovereign debt (although markets recovered some ground towards the end of the period). Investor confidence was also impacted by a unilateral move from the German financial regulator to ban the naked short selling of various securities, while concerns about policy tightening in China contributed to a fall in commodity prices.
- The ongoing instability in the euro area prompted European Union finance ministers, central bankers and the International Monetary Fund to hammer out a rescue package to the tune of €750 billion. However, fears of contagion risk and the uncertainty surrounding the implementation of required austerity measures continued to plague markets.
- Elsewhere, uncertainty surrounding the US financial reform bill weighed on the financials sector. Fears of a politicised crackdown on banks and financial markets unsettled markets, sending share prices reeling and currency markets into disarray.
- Disappointing US jobless data revived fears that the economic recovery could prove shortlived, driving investors into safe haven assets. In addition, eurozone consumer confidence levels hit a one-year low, but better-than-expected German manufacturing data injected some much need optimism.
|
| 12/05/2010 | Monthly Markets Review April 2010 (60 KB)
- The MSCI World index delivered a broadly flat return in US dollars over the month. The improvement in investor sentiment, seen in March, continued into the early weeks of April. However, markets gave back some ground in the latter part of the month as concerns over fiscal difficulties in the eurozone resurfaced, with rating agency Standard & Poor's (S&P) downgrading the sovereign credit ratings of Greece, Portugal and Spain. Fears that the contagion would spread throughout Europe weighed heavily on equities.
- Markets also sold off following news that Goldman Sachs was the first major Wall Street firm to be accused by the Securities and Exchange Commission (SEC) of fraud connected to the collapse of the subprime mortgage market.
- Global economic data generally improved. US consumer spending increased at the fastest pace for three years in the first quarter of 2010. In the eurozone, strong industrial production growth partly offset weak retail activity and a construction sector plagued by bad weather in the first few months of 2010.
|
| 12/04/2010 | Quarterly Markets Review Q1 2010 (61 KB)
- Although global equities endured a volatile quarter, the MSCI World Index finished the period
in positive territory due to generally improving macroeconomic data and mostly positive
corporate earnings results. Encouragingly, many companies are now beginning to see
revenue growth.
- A whole host of countries released positive growth data, showing that they exited recession
in the final quarter of 2009. In particular, the US reported stronger-than-expected 5.7%
annualised fourth quarter GDP growth. However, other economic releases were mixed, with
US employment continuing to lag and housing data weak.
- Volatility in equity markets, worldwide, persisted as investors digested contagion risks arising
from a potential sovereign debt crisis in Europe, the announcement of President Obama’s
bank regulation proposals and worries over the impact of further monetary tightening in
China. China made a second successive 50 basis points hike in the required reserve ratio,
which many believe to be the start of significant monetary tightening.
- Credit outperformed government bonds as corporate bonds continued to experience an
excess of buyers over sellers.
|
| 09/03/2010 | Monthly Markets Review February 2010 (61 KB)
- Global equities had a volatile start to 2010, with initial gains reversed by the end of January. Favourable economic data from the US and China in the first half of the month brightened the prospects for global economic recovery. However, optimism receded in the second half thanks to less positive US data including mixed earnings releases, disappointing employment figures and a setback in the nascent housing recovery.
- The MSCI World Index finished lower overall, with sentiment shifting on the back of continued concerns about sovereign risk in the euro area, the prospect of monetary tightening in China and the announcement of President Obama’s bank regulation proposals.
- With the US dollar rising, commodity-names suffered in particular, but most sectors proved weaker as investors questioned the pace of the worldwide economic recovery.
- Credit outperformed government bonds and cash as corporate bonds continued to experience an excess of buyers over sellers
|
| 12/02/2010 | Monthly Markets Review January 2010 (80 KB)
- Global equities had a volatile start to 2010, with initial gains reversed by the end of January.
Favourable economic data from the US and China in the first half of the month brightened
the prospects for global economic recovery. However, optimism receded in the second half
thanks to less positive US data including mixed earnings releases, disappointing employment
figures and a setback in the nascent housing recovery.
- The MSCI World Index finished lower overall, with sentiment shifting on the back of
continued concerns about sovereign risk in the euro area, the prospect of monetary
tightening in China and the announcement of President Obama’s bank regulation proposals.
- With the US dollar rising, commodity-names suffered in particular, but most sectors proved
weaker as investors questioned the pace of the worldwide economic recovery.
- Credit outperformed government bonds and cash as corporate bonds continued to
experience an excess of buyers over sellers
|
| 19/01/2010 | Quarterly Markets Review Q4 2009 (61 KB)
-
Despite volatility picking up and momentum beginning to wane, equities provided positive
returns in the fourth quarter. Economic news supported sentiment overall, with a positive
growth rate from the euro area (for the first time since Q1 2008), good Q3 GDP growth in the
US, and most other countries (with the notable exception of the UK) officially out of
recession. However, concerns about a potential debt default in Dubai unsettled investors at
the end of November, and worries about sovereign risk associated with Greece and Spain
dampened the mood later in the month.
- The strongest returns were generated by emerging markets, the UK and the Asia (ex Japan)
region. The only market in negative territory over the quarter was Japan as concerns over
reduced export competitiveness due to the strong yen impacted market sentiment.
-
In terms of sectors, materials provided double digit returns on continued evidence of strong
demand in emerging markets. Consumer staples, healthcare and energy also did well. The
weakest returns came from financials, partly due to financial problems in Dubai, and some
profit taking on the previous quarter.
-
Credit outperformed government bonds and cash as investors continued to purchase high
quality corporate bonds relatively cheaply during the quarter.
|
| 11/12/2009 | Monthly Markets Review November 2009 (60 KB)
- Most global equity markets rose in November as economic news continued to support the recovery theme. US third quarter GDP growth, however, was revised down from 3.5% to a still strong 2.8% on an annualised basis. The main cause of the revision was less robust gains in consumer spending, although news from other sectors of the economy was quite encouraging. Economic data from China confirmed that their recovery continued apace.
- The US market outperformed on a global basis, although emerging markets were also strong. Japanese share prices fell as analysts priced in reduced export competitiveness due to ongoing currency strength. At the end of the month, however, global markets were volatile as the Dubai government announced a debt restructuring of Dubai World, one of its holding companies, and there were fears that Dubai would default on billions of dollars of debt from banks around the world.
- The US dollar continued to weaken, nudging up commodity prices and driving a rush to gold, which hit new highs during the month.
- Investors continued to be lured back into the credit market with the opportunity to buy high quality bonds very cheaply and corporate bonds outperformed government bonds and cash.
|
| 11/11/2009 | Monthly Markets Review October 2009 (180 KB)
- Many global stockmarkets finished October in negative territory, following strong recent performance, as investors began to question the strength of the economic recovery.
- Equity markets were buoyed in the first half of the month by broadly favourable economic data in the US and Europe. The US exited recession over the month, reporting 3.5% growth for the third quarter (on an annualised basis). However, markets fell back later in the month as several economic releases disappointed and highlighted lingering risks. Persistently high unemployment, weak manufacturing activity, consumer confidence and new home sales data all weighed on sentiment.
- Although the majority of US companies which announced earnings figures over the period beat analyst expectations, reflecting in many cases costcutting efficiency, few reported results demonstrating a genuine pickup in final demand. A growing number of analysts said that equities' climb since the March lows left the market vulnerable to a pullback.
- Corporate bonds continued to post positive returns, due to the tentative improvement in economic data, and outperformed government bonds and cash.
|
| 09/10/2009 | Quarterly Markets Review Q3 2009 (180 KB)
- Global equity markets continued to generate very strong returns during the third quarter of 2009 due to a combination of improving economic data, increased risk appetite and continued investor inflows into equities.
- There were further indications of a global economic recovery, with many major countries likely to return to positive growth in Q3 2009. The principal engine of this recovery is industry, where output is ramping up quickly in response to the restocking of rapidly depleted inventories. GDP data released in mid August showed that both the French and German economies had already officially emerged from recession in Q2 2009, with both economies reporting growth of 0.3% for the period. Stronger exports and consumer spending - helped by government stimulus measures - led this rebound in Europe.
- Corporate bonds generated positive returns, due to better than expected economic data, outperforming government bonds and cash.
- The oil price traded sideways during the quarter, rising and then falling towards the end of the period due to concerns over demand from China.
|
| 08/09/2009 | Monthly Markets Review August 2009 (60 KB)
- Global markets closed slightly up after a muted month, which seemed to lack conviction in any particular direction. There was a growing sense among investors that the rally in global equity markets since March has pushed prices to such levels that a correction of some kind, or at least a slowdown in their ascent, is overdue.
- US economic data showed signs of improvement, with the unemployment rate moving lower, easing from 9.5% in June to 9.4% in July. In addition, manufacturing data, durable goods orders and industrial production figures all strengthened from previous lows. However, on the negative side, retail sales remained disappointingly weak. News from China was mixed. A solid gain in manufacturing, driven by domestic demand, and record imports of oil and iron ore seemed to bode well for economic recovery. However, overall imports and exports continued to decline, and market falls and talk of the authorities curbing loan growth caused investor jitters.
- Global government and corporate bonds generated positive returns, with credit marginally outperforming government bonds and cash.
- There was wide variation in the price movements of various commodities; oil closed
marginally down for the month, whereas prices for sugar and many metals rose strongly.
|
| 11/08/2009 | Monthly Markets Review July 2009 (58 KB)
- Global equity markets rallied in July, buoyed by optimism about the potential for global recovery and US second quarter earnings results that were generally better than expected.
Although the weakness seen in late June persisted through the first week or so of July,
global markets then resumed their upward trajectory and many indices hit new highs for the year.
- US economic data was mixed, although hopes that the global economy might have turned the corner were restored by a better-than-expected corporate earnings season, in which many companies announced bullish outlooks. Economic data also improved later in the month and President Obama, among others in the administration, made cautiously optimistic comments about a recovery.
- Corporate bonds outperformed government bonds as risk appetite remained resilient and investors took advantage of attractively priced credit.
|
| 10/07/2009 | Quarterly Markets Review Q2 2009 (58 KB)
- Global equity markets rallied during the quarter as investors focused on optimism that the worst of the global economic downturn may be over. Both the IMF and G7 released more optimistic assessments of the worldwide economic outlook and macro economic data surprised to the upside.
- Data released during the period generally indicated that the global economy is stabilising. For example, consumer and business confidence, retail sales and housing data all showed some improvement at various stages during the quarter. Although global unemployment is still rising at an alarming rate, there were some positive surprises towards the end of the period, particularly in the US.
- Corporate bonds outperformed government bonds as risk appetite increased and investors took advantage of attractively priced credit.
- The oil price rose significantly, on account of signs that the global economic downturn is bottoming out.
|
| 11/06/2009 | Monthly Markets Review May 2009 (60 KB)
- The global equity market rally continued as investors focused on indications that the global economy is stabilising. In particular, financial stocks, worldwide, reacted positively to the long-awaited release of the Federal Reserve's stress test results, indicating that 10 of the US banks needed to raise a total of $75 billion to have sufficient capital, an amount that was seen as manageable. In addition, several of the tested banks were deemed to not require any further capital.
- The global macroeconomic backdrop remained weak and US data, in particular, was mixed.
- Encouraging signs included a larger-than-expected rise in a closely watched index of leading economic indicators in April and a significant increase in consumer confidence. However, unemployment continued to worsen and retail sales fell again in April.
- Global government bonds underperformed credit. Risk appetite increased as conditions in the corporate bond market improved significantly.
- The oil price climbed steadily, buoyed by signs of the global economy bottoming out, and in particular by hopes of recovering Chinese demand.
|
| 11/05/2009 | Monthly Markets Review April 2009 (60 KB)
- The rally in global equity markets continued in April, led by financials and cyclicals, with emerging and smaller company markets generally experiencing the biggest gains. Fears of a swine flu pandemic panicked markets briefly at the month end, especially in Asia where memories of the 2003 SARS outbreak linger.
- The macroeconomic backdrop remained poor with the global economy in recession,
corporate default rates rising and unemployment on the increase – to 8.5% in the US.
However, some evidence emerged that the rate of economic contraction had slowed and that the authorities’ measures to stabilise the banking system were beginning to have an impact.
- Government bond yields rose in April, under a glut of new issuance and increasing risk appetite. However, in line with equities, credit markets rallied, despite rising default rates, as investors took on more risk and took advantage of yield spreads above government bonds.
- Crucially in April, and in a growing sign that the worst of the financial crisis may be over, there was a significant fall in LIBOR rates, improving the liquidity in the money markets, which have been bunged-up since last year, and indicating an increased willingness by the banks to start lending again.
|
| 09/04/2009 | Monthly Markets Review March 2009 (56 KB)
- Global equity markets rebounded in March as investors reacted positively to better-thanexpected economic data and a range of US measures aimed at restoring liquidity to the financial system and easing pressures on homeowners
- Economic data surprised to the upside, in particular an unexpected surge in US housing starts
- Global governments announced further extensive measures to stabilise the financial system, including the US government’s ‘Public-Private Investment Program’, which was welcomed by investors
- Government bonds outperformed corporate bonds, which endured an extremely volatile month
|
| 10/03/2009 | Monthly Markets Review February 2009 (58 KB)
- Global equity markets were weak in February against a background of ongoing investor concerns about the prospects for the global economy
- Economic data was dire, with GDP, industrial production, employment, exports and corporate earnings all falling
- Governments worldwide announced further extensive (and expensive) measures to stabilise the financial system and mitigate the economic downturn
- Corporate bonds generally produced negative returns, as investors fled to the relative safe haven of government bonds.
|
| 16/02/2009 | Monthly Markets Review January 2009 (54 KB)
- Global equity markets have struggled since the beginning of the year due to renewed fears over the severity of the worldwide economic slowdown.
- Economic data continued to weaken, with unemployment rising and consumer confidence continuing to fall.
- Inflation levels continued to decline, although there were some signs in the month that oil and other commodity prices are stabilising.
- Corporate bonds continued their tentative recovery, posting positive returns, whereas government bonds struggled due to concerns over increasing supply.
|
| 13/01/2009 | Monthly Markets Review December 2008 (58 KB)
- Global equity markets showed some improvement in December as investors welcomed further plans of fiscal stimulus and big cuts in interest rates.
- Economic data pointed to a continued slowdown in global manufacturing output and consumer spending as well as rising unemployment.
- Inflation continued to fall with oil and other commodity prices heading lower.
- In the bond markets, global government bonds continued to rally while corporate bonds
showed tentative signs of recovery.
|
| 11/12/2008 | Monthly Markets Review November 2008 (62 KB)
- The global economic downturn showed little evidence of respite, and data released around
the world showed that a number of economies were already in recession
- Global central banks reduced interest rates in response to the weakening economic outlook.
In addition, the Federal Reserve announced measures aimed at easing the burden of the
financial crisis by trying to bolster bank lending
- Inflation continued to fall – commodity prices declined sharply, including oil, which fell below
$50 a barrel before bouncing back to close the month ahead of the $50 mark
- Economic concerns led government bonds continued to rally
|
| 10/11/2008 | Monthly Markets Review October 2008 (58 KB)
- Fears over a worldwide economic recession strengthened following deteriorating US
manufacturing, unemployment data and falling corporate profits
- The financial crisis deepened – global central banks cut interest rates and injected further liquidity into the banking system
- Inflationary pressures continued to recede – commodity prices fell sharply
- Weak economic data led to global government bonds to rally further
|
| 10/10/2008 | Monthly Markets Review September 2008 (188 KB)
- The turmoil in the global financial system intensified with a number of banking failures on
both sides of the Atlantic.
- Economic growth continued to deteriorate – negative US unemployment data.
- Inflationary pressures continued to fall – oil price fell sharply.
- Weak economic data and financial crisis led to a rally in global government bonds.
|
| 09/09/2008 | Monthly Markets Review August 2008 (145 KB)
- The opposing forces of weakening economic growth and inflation continued to weigh on markets.
- Inflationary pressures fell – oil price declined from their recent record highs.
- Some US data was better than expected, leading to strengthening of US dollar.
- Weak economic data releases led to a rally in global government bonds.
|
| 13/08/2008 | Monthly Markets Review July 2008 (60 KB)
- The opposing forces of inflation and weak economic growth continued to weigh on markets.
- Weak economic data releases prompted government bonds to rally across several markets.
- Fears over the collapse of US mortgage giants, Freddie Mac and Fannie Mae, rattled
markets before the government announced measures to support both corporations.
|
| 11/07/2008 | Monthly Markets Review June 2008 (59 KB)
- Mounting inflationary pressures and weak economic growth served to re-inject uncertainty
into the markets in June.
- Global equities experienced a sharp sell-off as record oil prices fuelled fears of spiralling
inflation and re-ignited concerns over the health of the financial services sector.
- Banks were amongst the worst hit as investors speculated about further write-downs. Automakers
also bore the brunt of the fallout as input costs increased and consumer demand
began to wane. Encouragingly, the more defensive areas of the market found support in their
‘safe haven’ status.
|
| 17/06/2008 | Monthly Markets Review May 2008 (60 KB)
- Global equity markets saw some semblance of order return in May as investors came to the
view that the worst of the credit crisis may now be behind us.
- With oil rising above $135/barrel, inflation became the focus of the world’s main central banks, meaning that the rate-cutting cycle is almost certainly on pause.
|
| 13/05/2008 | Monthly Markets Review April 2008 (62 KB)
- Global stockmarkets recovered some lost ground in April amid some signs that the worst of
the credit crisis may now be behind us.
- The Federal Reserve cut US interest rates to 2%, and suggested that it may pause to see if
the previous reductions have the desired effect on consumer and corporate activity.
- Oil prices continued to push higher, which is keeping upward pressure on inflation around the
world.
|
| 07/04/2008 | Monthly Markets Review March 2008 (103 KB)
- Global stockmarkets in March continued to be hurt by concerns affecting the financial system as well as the slowdown in the US economy. Another 0.75% cut in US interest rates helped ease some of the pressure.
- Some of the better performances came from stocks that are seen as being particularly resilient to a weaker economic environment, such as consumer staple and utility companies.
- In commodities, oil prices were volatile, setting a new high of $111.80 a barrel. Gold also traded above $1,000 an ounce as investors hedged dollar weakness and inflation fears.
|
| 11/03/2008 | Monthly Markets Review February 2008 (61 KB)
- Western equity markets finished the month generally lower, while emerging markets
rebounded strongly on the back of ever-higher commodity prices.
- Central banks, especially the European Central Bank, are again focusing on the threat of
inflation. Crude oil hit a record $103/barrel during the month, while food and metal prices
continued to surge.
- Against the background of uncertainty, bonds benefited from the continued flight-to-quality,
with year-to-date returns outpacing those of equities.
|
| 11/02/2008 | Monthly Markets Review January 2008 (60 KB)
- Recession fears gripped global equity markets in January
- In emergency measures, the US Federal Reserve slashed interest rates by a total of 125 basis
points in two separate statements
- There were also further write-downs from a number of leading banks
- Bonds generally had a very good month, enjoying a strong start to the year.
|
| 14/01/2008 | Monthly Markets Review December 2007 (61 KB)
- The key themes of 2007 – the credit crunch and the ensuing financial turmoil – continued to
impact sentiment in December, and stockmarkets in most regions ended the month lower.
- In local currency terms, UK and emerging market stock ended the month higher, while the
US, Eurozone and Asia slipped. Economic data from the US, the world’s largest economy,
continued to be mixed, though the underlying trend indicates a gradual cooling.
- In terms of central bank action, the Federal Reserve cut rates by 25 basis points to 4.25%,
disappointing some investors who had been looking for a half-point cut. The Bank of England
also cut rates, while the European Central Bank and the Bank of Japan left rates unchanged.
|
| 18/12/2007 | Monthly Markets Review November 2007 (92 KB)
-
Global equity markets suffered considerable losses in November, as concerns about the fallout from the credit squeeze and rising commodity prices took their toll on investor sentiment.
-
On a regional level, emerging Asian equities were hit particularly hard while Japan fared the best in US dollar terms, buffered by the appreciating yen.
-
November was another strong month for global government bond markets, as investors moved to price in the likelihood of a recession in the US amid ongoing concerns about the impact of the credit crunch.
-
In contrast, credit had one of its worst-ever months. Spreads on both US and eurozone investment grade and high yield bonds widened dramatically.
|
| 26/11/2007 | Monthly Markets Review October 2007 (155 KB)
-
Global equities endured further volatility in October, but markets generally ended the month in solid positive territory. Emerging Asian markets provided very high returns, while Japan was the weakest performer.
-
Bond markets seesawed in October, but provided positive returns overall.
-
Consumer confidence dipped in the US, even though economic growth and payroll numbers were much better than anticipated.
-
In mid-October worries about banks’ exposure to risky investments were revived. The US’s largest bank, Citigroup, announced a big decline in profits and huge writedowns linked to areas including sub-prime mortgages and leveraged loans. This sparked a new rally in government markets and a sell-off in credit markets.
-
The US Federal Reserve cut interest rates at the end of the month, but warned that the risk of rising inflation is now on par with downside risks to economic growth. Investors had already factored in more cuts, leading to further falls in the dollar.
-
Crude oil and gold prices soared to near $100 per barrel and just under $800 per ounce respectively.
|
