COVID-19 hub: Investment

Smith & Williamson’s COVID-19 content hub provides insight articles, as well as links to view and sign up for regular market update webinars, giving an overview on all the latest developments.

The threat of rising inflation in a post COVID-19 world

The threat of rising inflation in a post COVID-19 world

18/03/2021 - While global attention has rightly been focused on the coronavirus pandemic, we are beginning to see the light at the end of the tunnel as the vaccine rollout begins to gather pace. However, the re-opening of the economy raises the spectre that long dormant inflation will soon resurface. After over a decade of low inflation, we look at the reasons why inflation could potentially increase over the next 3-5 years and whether investors should be concerned about the prospect of a sudden rise in inflation.

Fast fashion and the legacy of a pandemic

Fast fashion and the legacy of a pandemic

03/03/21 - 2020 proved devastating for countless communities, industries and nations. The fashion retail sector has been hit hard, facing store closures and a drop in customers as more and more people were plunged into economic uncertainty. Notable casualties have included Oasis, Warehouse, TM Lewin, Edinburgh Woollen Mill, M&Co, Peacocks, Jaeger and, of course, Arcadia, owner of the Topshop brand. The Centre for Retail Research has estimated that UK retail administrations this year will have affected over 95,000 employees.

Reaching for the stars: a sustained rally in Hong Kong-listed stocks?

Reaching for the stars: a sustained rally in Hong Kong-listed stocks?

12/01/21 - China’s first solo mission to explore Mars is set to begin in February when its Tianwen-1 probe reaches the red planet’s orbit ahead of an eventual landing of a rover on the surface. Hong Kong-listed equities could also reach for the stars this year. This includes both Hong Kong domestic (i.e. the Hang Seng index or HSI) and Chinese-focused companies (Hang Seng China Enterprises Index or HSCEI) indices. Our optimism is predicated on three factors.

COVID-19 may have taken the sting out of a potential no deal Brexit tale

COVID-19 may have taken the sting out of a potential no deal Brexit tale

03/12/20 - ‘No deal’ is not on many people’s Christmas list but, given cheap valuations for both equities and sterling, it may not be quite as disastrous for investors as some have suggested.

Gold – Is now the time to shine?

Gold – Is now the time to shine?

06/11/2020 - What is the gold price telling us from an economic perspective, and what are the ways investors can add exposure to gold in an investment portfolio?

Locked down but not out

Locked down but not out

04/11/2020 - On 31 October, Halloween, Prime Minister Boris Johnson spooked the nation with the announcement of a 2nd national lockdown in England, starting on the 5 November, to help reduce the spread of the resurgent coronavirus. While this is clearly an unfortunate development, we suggest five reasons not to take fright at its potential impact on the UK economy and financial markets.

A not so straightforward US election

A not so straightforward US election

20/10/2020 - Four possible scenarios in the 2020 contest

Could a Covid-19 vaccine revive enthusiasm for value stocks?

Could a Covid-19 vaccine revive enthusiasm for value stocks?

18/09/2020 -  ‘Moonshots’ aside, it is clear that the only real path out of our current predicament and into a full cyclical economic recovery is a vaccine. As a result, equity markets have become increasingly sensitive to vaccine developments across the globe, with positive vaccine being greeted with rising share prices.

Growing attractiveness of non-US markets

Growing attractiveness of non-US markets

07/08/2020 - After reaching a low on 23 March, global equities (as measured by the MSCI All Country World Index) have recovered 44%. 

Key Weekly Data Points – week commencing 06/07/2020

Key Weekly Data Points – week commencing 06/07/2020

10/07/2020 - Daniel Casali provides a round-up of key market activity during the week of 6th July.

Low Carbon Portfolios and Divestment

Low Carbon Portfolios and Divestment

09/07/2020 - Why investing in low carbon portfolios may not be the solution on climate change

Key Weekly Data Points – week commencing 29/06/2020

Key Weekly Data Points – week commencing 29/06/2020

06/07/2020 - Daniel Casali provides a round-up of key market activity during the week of 29th June.

Four market risks to monitor

Four market risks to monitor

03/07/2020 - With lockdown life easing back to normality, there are tentative signs of a new business cycle emerging. As such, global equities rose 19% in the second quarter, the strongest rally for 11 years, a 72% retracement of the prior falls since COVID-19.

The case for US inflation protected government bonds

The case for US inflation protected government bonds

30/06/2020 - Inflation has notably decelerated in response to the COVID-19 induced recession we are currently experiencing. However, over the medium term, we see scope for a revival in consumer prices, a topic we have discussed previously.

Key Weekly Data Points – week commencing 22/06/2020

Key Weekly Data Points – week commencing 22/06/2020

26/06/2020 - Daniel Casali provides a round-up of key market activity during the week of 22nd June.

Global economic recovery supports the equity rally

Global economic recovery supports the equity rally

23/06/2020 - The sight of a queue can evoke a range of emotions. Despair, panic, frustration or perhaps patriotism for some British citizens. However, the queues outside shops on 15th June was a sight of hope for many.

Key Weekly Data Points – week commencing 15/06/2020

Key Weekly Data Points – week commencing 15/06/2020

19/06/2020 - Daniel Casali provides a round-up of key market activity during the week of 15th June.

Tilting towards Emerging Markets over Developed Markets

Tilting towards Emerging Markets over Developed Markets

16/06/2020 - The term Emerging Market (EM) was coined by author Antoine Van Agtamel in the early 1980s. Technical definitions vary, but generally an EM is understood to be an economy with a low to middle income per capita, which is transitioning from a closed economy to a more open market economy.

UK economy to recover from its darkest hour

UK economy to recover from its darkest hour

16/06/2020 - UK GDP fell by 20.4% in April, not far off economists’ expectations of 18.7% (according to a survey by Bloomberg), and much lower than the drop of 5.8% in March. In terms of level, this decline effectively erased 18 years of economic growth, bringing total GDP back to 2002 levels!

Key Weekly Data Points – week commencing 08/06/2020

Key Weekly Data Points – week commencing 08/06/2020

12/06/2020 - Daniel Casali provides a round-up of key market activity during the week of 8th June.

Market growth pains may favour value stocks

Market growth pains may favour value stocks

08/06/2020 - Value and growth are the two most traditional schools of investing. Value investors seek to find companies that they believe are undervalued. Growth investors seek companies offering capital or earnings growth that they believe will outperform the market. 

Key Weekly Data Points – week commencing 01/06/2020

Key Weekly Data Points – week commencing 01/06/2020

05/06/2020 - Daniel Casali provides a round-up of key market activity during the week of 1st June.

Cable under tension from upcoming UK-EU talks

Cable under tension from upcoming UK-EU talks

01/06/2020 - Amongst financiers, particularly forex traders, the term ‘cable’ denotes the exchange rate between GBP and USD or even just GBP itself. The name is derived from 1800s transatlantic cables used to transmit the GBP/USD exchange rate. Downwards cable equals sterling depreciation and dollar appreciation and upwards, the opposite.

Key Weekly Data Points – week commencing 25/05/2020

Key Weekly Data Points – week commencing 25/05/2020

29/05/2020 - Daniel Casali provides a round-up of key market activity during the week of 25th May.

Key Weekly Data Points – week commencing 18/05/2020

Key Weekly Data Points – week commencing 18/05/2020

22/05/2020 - Daniel Casali provides a round-up of key market activity during the week of 18th May.

A tale of two valuations does not necessarily imply US equities are expensive

A tale of two valuations does not necessarily imply US equities are expensive

22/05/2020 - Since the US equity market bottomed out, its subsequent rebound has caught many investors off-guard.

Governments may opt for local over general lockdowns to contain another COVID-19 outbreak

Governments may opt for local over general lockdowns to contain another COVID-19 outbreak

18/05/2020 - Governments are gently beginning to ease lockdowns, allowing economic activity and hope of a V-shaped recovery to continue. But a critical risk, for markets and society, is the risk of a ‘second wave’ of COVID-19 and subsequent government responses.

Key Weekly Data Points – week commencing 11/05/2020

Key Weekly Data Points – week commencing 11/05/2020

15/05/2020 - Daniel Casali provides a round-up of key market activity during the week of 11th May.

Key Weekly Data Points – week commencing 04/05/2020

Key Weekly Data Points – week commencing 04/05/2020

07/05/2020 - Daniel Casali provides a round-up of key market activity during the week of 4th May.

Risk of high inflation beyond the near-term

Risk of high inflation beyond the near-term

04/05/2020 - A sudden rise in inflation is a key risk for any unprepared portfolio. Potentially, higher inflation could mean central banks tighten monetary policy in order to abide by their mandates. 

Key Weekly Data Points – week commencing 27/04/2020

Key Weekly Data Points – week commencing 27/04/2020

01/05/2020 - Daniel Casali provides a round-up of key market activity during the week of 27th April.

Is COVID-19 the end of Responsible Investing?

Is COVID-19 the end of Responsible Investing?

30/04/2020 - Over the past few years Responsible Investing, often known as (Environmental, Social and Governance (ESG), has surged in popularity, with more investors wishing to influence positive change with their money. The wider investment industry came to understand that more responsible companies are likely to still be trading in the long-term. However, for every trend there are critics.

Further improvement in some of the necessary conditions to stabilise equity markets

Further improvement in some of the necessary conditions to stabilise equity markets

28/04/2020 - Following on from our review at the end of March, we make a qualitative assessment of the 7 conditions we believe are necessary to stabilise equity markets.

Key Weekly Data Points – Week commencing 20/04/2020

Key Weekly Data Points – Week commencing 20/04/2020

24/04/2020 - Daniel Casali provides a round-up of key market activity during the week of 20th April.

Active versus passive – in Coronavirus markets

Active versus passive – in Coronavirus markets

24/04/2020 - Passive funds are a critical part of any modern portfolio, and an increasingly dominant feature across global capital markets. We consider how best to use passive funds in our client portfolios.

Yield opportunities in US corporate credit

Yield opportunities in US corporate credit

17/04/20 - The US corporate bond market offers an opportunity for income seeking investors. Investment grade and high yield corporate bonds currently trade at yields of 2.1%, and 7.4% respectively, which compares to a S&P 500 equity trailing dividend yield (DY) of 2.2%.

Gold – Why now?

Gold – Why now?

16/04/20 - At the beginning of 2020 the attraction of having some gold exposure in portfolios seemed strong as central banks were once again ‘loosening’ policy and there was evidence of fiscal stimulus emerging too.

Key Weekly Data Points – Week commencing 13/04/2020

Key Weekly Data Points – Week commencing 13/04/2020

17/04/2020 - Daniel Casali provides a round-up of key market activity during the week of 13th April.

Global company earnings expectations for 2020 and beyond

Global company earnings expectations for 2020 and beyond

09/04/2020 - The global economy is on track to deliver its lowest real GDP growth rate since the end of the Second World War.

Weekly Key Data Points – Week Commencing 06/04/2020

Weekly Key Data Points – Week Commencing 06/04/2020

09/04/2020 - Daniel Casali provides a round-up of key market activity during the week of 6th April.

Are structured products helping manage risk in distressed markets?

Are structured products helping manage risk in distressed markets?

06/04/2020 - In recent weeks nearly every asset class has seen remarkable and unexpected price movements. Structured products are often used in modern investment portfolios to reduce risk and or diversify returns, but prices have been as volatile and disconcerting as many other assets. In this article we answer five questions to explain how products are formed, why these are used and the factors that determine pricing.

Dividends: Under the knife

Dividends: Under the knife

07/04/2020 - As the ramifications of the global lockdown response to COVID-19 develop, dividend income is being slashed. We explore what this means for our clients, especially those who need a regular investment income, and consider how long and severe this income drought might be.

Weekly round-up (week of 30/03/2020)

Weekly round-up (week of 30/03/2020)

03/04/2020 - Daniel Casali provides a round-up of key market activity during the week of 30th March.  

Metals & Mining Sector – An Opportunity Ahead?

Metals & Mining Sector – An Opportunity Ahead?

03/04/2020 - The metals & mining sector has been amongst the worst hit sectors amid the recent market volatility relating to the COVID-19 pandemic. This has always been a high beta sector exposed to global consumption, and it has once again proven thus.

Oil & Gas: Impact of the Saudi-Russian Oil War and COVID-19

Oil & Gas: Impact of the Saudi-Russian Oil War and COVID-19

02/04/2020 - While global equity markets have bounced from lows over the last two weeks oil prices have not followed suit, instead continuing their fall to levels last seen in November 2002.

Some of the necessary conditions to stabilise the markets have improved

Some of the necessary conditions to stabilise the markets have improved

27/03/2020 - It’s hard to believe that just over a month ago global equities were trading at all-time highs. 

Market volatility and trading strategy

Market volatility and trading strategy

26/03/2020 - At Smith & Williamson we pride ourselves on the efficiency and skills of our dealing team, who processed over £9bn of trades last year, and saved clients millions of pounds by achieving excellent prices. But in recent weeks our team, with over 150 years’ combined experience trading, including during the 1987 crash, 9/11 and the Global Financial Crisis, have seen unprecedented and difficult conditions.

Real Estate: Discounts and the long-term resilience of REITs

Real Estate: Discounts and the long-term resilience of REITs

26/03/2020 - Real estate has historically delivered strong and consistent returns to investors. For example, the MSCI UK Monthly Property Index has shown annualised returns of 8.6% in the 10 years to February 2020 (MSCI). 

 

Webinars

 

Market update – S&W Monthly Webinar

In this episode of our Investment Outlook webinar, Daniel Casali, our Chief Investment Strategist, discussed ‘The global economy shows resilience to COVID-19 headwinds’, topics included:

- Rising new COVID-19 cases in Europe could cause another round of national lockdowns and is a major risk to markets

- The pandemic could also precipitate a confluence of other tail risks in the autumn, including a no deal Brexit, a disputed US election and a sell-off in technology stocks.

- However, unprecedented stimulus and economic recovery points to higher returns for equities over bonds"

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S&W Weekly Briefing - 27 March 2020

Issues discussed in this week's webinar include: The underlying drivers behind recent market volatility, response by policymakers and how to position portfolios and the equity outlook.

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