The Evelyn Partners Investment Podcast

Why investors need to hold their nerve

The Chancellor’s mini-budget has unleashed another round of volatility on the markets, with UK bond and currency markets in the eye of the storm. However, after a U-turn on the more controversial elements of the fiscal package and intervention from the Bank of England, a fragile stability has returned.

Longer-term problems remain. Inflationary pressures continue, pushing interest rates higher. The squeeze on living costs is intensifying, with mortgage rates and energy bills rising. It is an unsettling moment for investors, with many wondering how they should respond.

Volatility is part and parcel of investing. The stock market needs to be approached with a long-term view and many of these problems will resolve over time. There are signs that inflationary pressures are starting to ebb, for example. As Cherry Reynard and Ben Seager-Scott explore in this podcast, all markets offer opportunities. It’s just a question of looking in the right places.  

Understanding markets during an inflation shock

Following Fed Chair Powell’s hawkish speech at Jackson Hole at the end of August, a Fed “pivot” away from their plans to raise interest rates is unlikely for the rest of 2022. The US economy appears to be overheating – inflation is at multidecade high, and the Fed is looking to match labour demand with available supply, to reduce inflation risk. But there is good news for the US when it comes to inflation: US CPI inflation stayed flat in July and is expected to do the same in August. Yet there is still upward pressure in the underlying rate of US inflation, and political pressure to bring down the cost of living.

Eurozone consumer confidence in August was lower than the depths of the pandemic in April 2020. In contrast, the higher inflationary environment has meant improved pricing power for listed European companies. Vulnerable sectors include heavy energy dependent users including the auto sector and the European consumer who is probably spending a lot more on energy and less in the shops.

For the UK, we have a new PM making big promises, but inflation remains the big unknown. A lot depends on what the new PM will do to mitigate the rising cost of energy. Consumers and businesses are tightening their belts to pay for the sharp energy cost increases. Most consumers are choosing to save less and borrow more to get through. And, next year is looking tough for high streets up and down the country as economists forecast no real household consumption growth in 2023.

Clouds gather over the global economy

Central banks were as good as their word in July, with significant rate hikes from the Federal Reserve and Bank of England. In seeking to tackle persistent and rising inflation, policymakers have been forced to look through worsening economic data. The US is already in a technical recession after two quarters of negative growth and the Bank of England predicts that the UK’s economy will weaken significantly in the fourth quarter.  
Financial markets have managed to shrug off the recent run of bad news. There are signs that investors may have started to anticipate some moderation in future rate rises as the economic data turns. However, central banks continue to show their resolve and, as yet, there is no apparent peak in inflation. 
Europe has been in the eye of the storm on the global energy crisis and faces a series of risks in the months ahead. Should energy supplies fail, it could bring considerable pain for industry and consumers. How bad could it get for the Eurozone economy in the second half of the year?

A turning point for the UK?

In July's episode of The Evelyn Partners Investment Podcast Cherry Reynard chats to Daniel Casali, Chief Investment Strategist, about an unsettled period in UK politics and asks whether, after a choppy six months, investors can look forward to a better second half of the year.  

Resolute Fed creates market jitters

Stock markets were volatile ahead of the Federal Reserve’s decision on interest rates. The 75bps rise was higher than expectations but sent a clear signal that the central bank would put tackling inflation ahead of economic growth.

However, higher rates make recession more likely. In this month’s podcast, Daniel Casali gives his verdict on whether the world’s largest economies are likely to see an economic downturn, while Ben Seager-Scott looks to make sense of febrile markets.

Increasingly, a lot of bad news is reflected in share prices and bond yields. Should this be grounds for optimism? Ben and Daniel give their verdict on the stock market and global economy for the second half of 2022.

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With bond yields rising, what is the impact?

In May’s episode of the Tilney Investment Podcast Cherry Reynard chats to Ben Seager-Scott, Head of Multi-asset Funds, and Daniel Casali, Chief Investment Strategist about bond yields, inflation and opportunities for investors.

For more information on Evelyn Partners, please head to www.evelyn.com

Volatile markets adjust to a new era

April’s episode of the Tilney Investment Podcast features Cherry Reynard in conversation with Ben Seager-Scott, Head of Multi-asset Funds, and Daniel Casali, Chief Investment Strategist. They discuss market volatility, inflation and the outlook for the global economy and stock markets.

 

For more information on Evelyn Partners, please head to www.evelyn.com

War in Ukraine

In the March episode of the Tilney Investment Podcast, Chloe Stages, an associate investment director, joins Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. The conversation focuses on Russia’s invasion of Ukraine as well covering energy prices and the easing of Covid restrictions.

Interest-rate hikes and market volatility

Charlie May, an investment director from Tilney’s London office, joins Ben Seager-Scott, our Head of Multi-asset Funds for our February episode of the Tilney Investment Podcast. They discuss the eventful first month of 2022, the outlook on global equities, interest-rate hikes, and rising tensions in Ukraine.

What’s in store for 2022?

In January we’re looking back over 2021 and discussing the outlook for 2022. Listen to Sam Coppin, an investment director from Tilney’s London office, putting Ben Seager-Scott, our Head of Multi-asset Funds through his paces. They discuss inflation, quantitative tightening, asset classes in a rising interest-rate environment and more.