The Evelyn Partners Investment Podcast

Why is the US driving the global equity market rally?

Global equity markets are rallying thanks to the buoyant US economy, which is being driven by stealth stimuli such as record immigration and increased demand for goods and services. But how long is this set to last and what are the risks for investors?

Diversifying the diversifiers amid geopolitical tensions

Diversifying portfolios has never been so vital as conflict in the Middle East escalates and spreads. We also consider the performance of the energy sector and gold

Why are markets breaking out and broadening?

Global markets are broadening out now and as equity values rise this wealth is helping to generate economic stimulus in several ways, which we explore here.

Why is global economic growth so resilient?

Global economic growth has been resilient while inflation has been slowing. We look at the reasons for this and why central banks are under pressure to balance growth and inflation.

Will elections in 2024 impact your investments

In 2024, voters will go to the polls in a record 77 countries. We explore how they will impact economies and stock markets. We also consider how supply chains and shipping routes are affected following Houthi attacks on shipping in the Red Sea.

Why could equities outperform bonds?

Equities are set to outperform bonds, boosted by company sales growth and elevated profits. Bonds, meanwhile, should benefit from interest rate cuts, which could lead to higher bond prices. The Artificial Intelligence (AI) boom is expected to continue in 2024, but the US stock market should broaden out beyond this sector into unloved areas like energy and small caps.

Why have earnings beat expectations?

Despite global economic uncertainty, investors took comfort from an impressive set of company earnings in the third quarter of 2023. Gold has hit a high this month driven by an outbreak of optimism that US interest rates have now peaked. Equities rallied partly thanks to the Artificial Intelligence (AI) boom, but appetite for these stocks may not last.

The impact on financial markets from the Israel-Hamas conflict

In November’s episode of the Evelyn Partners Investment Podcast, Cherry Reynard and Daniel Casali look at the financial market implications of the conflict and the humanitarian crisis unfolding in the Middle East. The tragic loss of innocent, civilian lives in the region is shocking and our thoughts are first and foremost with all those affected. While the impact on the financial markets has been limited, it may have longer term implications for the oil price and the green energy transition.

What’s next on inflation?

Until recently, inflation appeared to be in retreat. Central banks felt sufficiently confident to pause on interest rate hikes. However, a blip in the inflation figures has worried investors, who fear more US rate rises could emerge as a result. The main culprit has been oil prices, which have moved higher in response to supply cuts from OPEC,

Expectations are still for a ‘soft landing’ in the US, with any recession likely to be short-lived and shallow. The UK and Eurozone face greater economic headwinds, In the UK, employment data has seen a notable deterioration in recent months. Nevertheless, while recession is more likely, it is not expected to be deep or persistent.

Emerging markets have been pulled lower by the weakness of China this year. There is no imminent revival in sight for China, but other emerging markets have been doing well. Latin American countries have been cutting rates, while India has seen significant growth. There are plenty of idiosyncratic opportunities to exploit.

Global economic growth shaking off any signs of slowing down

The services sector continues to drive growth in the global economy, despite rising interest rates. Spending on services is being driven by savings built up during the Covid era, and pent-up demand for areas such as travel and leisure activities. Along with resilient labour markets, this has continued to push up consumption.

In the near-term, there is no sign of this stopping. Unemployment is still low and consumers still have money to spend. Phenomenon such as Swiftonomics – the blockbusting billion dollar tour by Taylor Swift – have shown the consumer’s ongoing propensity to spend.  

Manufacturing, however, remains on its knees, with little hope of a revival in the short-term. Nevertheless, CEOs may be encouraged by the recent equity market rally to revive investment in production, allowing the sector to recover.