Insights

September 2019

US/China trade war undermines the outlook for equities

William Davies

Global Head of Equities

For the past 10 years, I have been positive about the prospects for equities. But at the end of May, I downgraded my view to neutral as the trade war between the US and China escalated. The rhetoric between the two superpowers was becoming more hard-line, and I foresaw the risks for equities rising. It appeared to me that the Chinese had decided to take a firmer line in negotiations, reducing the chances of a deal.

September 2019

Caution or precaution? Fixed income outlook for the second half of 2019

Gene Tannuzzo

Deputy Global Head of Fixed Income

Bond market performance in 2019 has been dominated by a theme of central banks pivoting towards easier policy. In particular, the US Federal Reserve has signalled potential interest rate cuts, marking a meaningful shift compared with the hiking cycle of the past three years. This has been a driving force behind double digit returns in many sectors of the bond market in the first half of the year.

September 2019

Is the eurozone headed for two decades of Japanstyle slow growth?

Mark Burgess

Deputy Global CIO and CIO, EMEA

Despite it being more than 10 years since the global financial crisis (GFC), the world remains heavily indebted and there is no realistic prospect of that debt reducing in the short or medium term. Barring glaring historical exceptions (such as in the wake of the Great Depression when US debt to gross domestic product (GDP) peaked at almost 120%), sovereign debt levels in many economies are close to all-time highs. They are certainly much higher than they were just two or three decades ago.

September 2019

Asset Allocation Update

Maya Bhandari

Portfolio Manager, Multi-asset

Treading a more tenuous path

The duration rally over the month of August was eye-watering. The whole German sovereign bond curve, out to 30 years, now trades with a negative yield, with half the European investment grade bond universe also yielding below zero. In the UK and US, meanwhile, markets have “baked in” the expectation that interest rates will be lower than today for the next 10 and 30 years respectively.

July 2019

Asset Allocation Update

Toby Nangle

Head of Global Asset Allocation

After sharp drawdowns towards the end of 2018 stock markets are re-approaching their all-time highs. This is despite escalating geopolitical tensions in the Gulf, the risks of a disorderly Brexit, softening economic data, and professional company analysts cutting their profit forecasts for stocks in every major market.

July 2019

Investment Themes

Mark Burgess

Deputy Global Chief Investment Officer and Chief Investment Officer, EMEA

In this month’s Investment Themes video, Mark Burgess, Deputy Global Chief Investment Officer and Chief Investment Officer, EMEA, discusses:

  • Late-cycle behaviour
  • Recession fears
  • The return of QE
  • Current equity and bond valuations
  • National and corporate debt

July 2019

Time is running out to solve China’s debt bubble

Paul Smillie

Senior Investment Analyst

Many investors are focused on the outlook for trade talks with the US, fearing an all-out trade war which would negatively impact global, and especially Chinese, equity markets. But investors underestimate the mounting problems caused by the recent rapid expansion of credit in China. Only radical solutions now remain to resolve the country’s growing credit bubble.

June 2019

High yield bonds: a mature approach

Roman Gaiser

Head of Portfolio Management, High Yield, EMEA

The Threadneedle European Short-term High Yield Bond strategy focuses on maturity over duration to manage risk, which should mean lower interest rate sensitivity and less unpredictability.

June 2019

Asset Allocation Update

Maya Bhandari

Portfolio manager, Multi-asset

Equity exposure taken down to neutral

Every risk has attached to it a price. Lately the facts have evolved, mostly in a negative direction: trade wars have resurfaced, risks of an unfavourable Brexit are back in focus, and at least some corners of financial markets are firing warning signs about the future path of economic and earnings growth.

Important information

The research and analysis included on this website has been produced by Columbia Threadneedle Investments for its own investment management activities, may have been acted upon prior to publication and is made available here incidentally. Any opinions expressed are made as at the date of publication but are subject to change without notice and should not be seen as investment advice. Information obtained from external sources is believed to be reliable but its accuracy or completeness cannot be guaranteed.