Views on COVID-19 – mounting concerns around credit triggered a cascade of indiscriminate selling in equity markets

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“Investors began 2020 with high hopes for strengthening global growth, but soon expectations for returns were dashed by overextended valuations and pockets of geopolitical risk. They began to re-evaluate risk, preparing for elevated volatility and lower returns. In early February, worries quickly turned to COVID-19, and a vicious circle began forming on March 12, 2020. […]

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Coronavirus delays property development but REITS resilient in volatile market

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Both local and global REITS are expected to be relatively resilient in the face of recent market turmoil. Property projects such as shopping centres and apartment developments will not be immune to the global coronavirus outbreak, with impacts including supply chain delays and lower foot traffic. Nevertheless, the sector continues to be a defensive play […]

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Short and Sharp: Have markets developed immunity to the coronavirus?

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Principal Global Investors Chief Strategist, Seema Shah addresses the ongoing impact of coronavirus. “2020 to date has been no stranger to sharp sell offs, followed quickly by big rebounds. In an environment where the pace at which tail-risks can affect asset prices is elevated and where there is still plenty of angst, surrounding not just […]

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Ongoing US-Iran tension could boost energy stocks despite lacklustre global outlook

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Financial markets’ quick recovery following US-Iran tensions may be short lived and punish investor returns, though a renewal of tensions could increase the appeal of energy stocks. Principal Global Investors Chief Strategist Seema Shah said: “While geopolitics are difficult to predict at the best of times and both sides have reason to avoid further turmoil, […]

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No positives in going negative for central bankers, says Principal Global Investors

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President Trump has been pushing the Federal Reserve (Fed) to consider cutting policy rates below zero in an effort to stimulate growth and weaken the dollar, however his stance hasn’t gained support amongst other central banks or the Federal Open Market Committee (FOMC). According to Principal Global Investment Strategist, Seema Shah, the rapid spread of negative yielding […]

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Headlines still worried, momentum a little better

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Principal Global Investors has released its Economic Insights for the month of September. Writing in the note to investors, Chief Global Economist, Dr Bob Baur, said that the world economic slowdown refuses to fade, however, economic momentum feels better. The tug-of-war “For some months, the world economy has seemed at a crossroads. With industrial activity stagnating, confidence downcast, […]

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Is this the momentous reversal?

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“Suddenly, there appears to be a glimmer of light. Expectations for a rebound in growth, nurtured by thawing U.S./China trade relations, better Brexit news, and global monetary easing have all boosted risk appetite. Global sovereign bonds have sold off sharply, with U.S. Treasury yields up some 30 basis points in one week.” Writing in a […]

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Is recession already baked in?

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After major indices on US stock markets hit all-time highs in July, the plunge in bond yields is bringing increasingly agitated warnings about worsening growth and recession. Writing in a blog, Principal Global Investors Chief Global Economist, Dr Bob Baur said, “this agonising may simply mean that we are in the worst of the slowdown. […]

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Good financial returns may be hard to find

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“Intensified trade tensions and disappointment with interest rate cuts by the Fed could provoke a relapse in equity markets.” That’s the view of Principal Global Investors Chief Global Economist, Dr Bob Baur. Writing in his July monthly economic notes, Dr Baur argued that even if world growth picks up as expected, good financial returns might […]

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Is the end in sight for the world slowdown?

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Interest rates: near a low in long-bond yields  “The eight-month plunge in 10-year U.S. treasury bond yields is likely over. Yields will slowly work higher into year-end. At some point, rising interest rates will become a problem for stock and credit markets, likely late next year or in 2021.  “For 35 years, yields on 10-year U.S. […]

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