Newell Palmer: Monthly Economic Notes – February 2018

Monthly Notes - February 18

Economic Overview

Some investors believe that because the current bull market and economic expansion have gone on for some time, a bear market and a recession will take place soon.  At this stage, there are no signals that usually warn of a coming recession, such as a loss of economic momentum or an inverted yield curve.  A market correction could still happen at any time, because of the overly optimistic sentiment.  Whilst central banks continue to unwind their quantitative easing policies, politics have generally become more favourable to the economy.  Politics has moved from fearing debt and deficits, to using fiscal policy to support growth, as seen in the US where tax cuts have just been legislated.

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Monthly-Notes-February-2018

Newell Palmer: Monthly Economic Notes – January 2018

Monthly Notes - January 18

Economic Overview

For the first time since the global financial crisis, world GDP growth is increasingly strong and synchronous, although it has been supported by loose monetary and fiscal policy. Looking to 2018, we believe that the growth momentum will continue and this would be broadly supportive of growth assets. However, there are risks that will require close watching and they include a sharp and unexpected rise in inflation, the unwinding of quantitative easing by central banks and how economies deal with potentially distorted asset prices as monetary policy is tightened.

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Monthly-Notes-January-2018

Newell Palmer: Monthly Economic Notes – December 2017

Monthly Notes - Header Dec

Economic Overview

The increasing breadth of the global economic expansion suggests the global expansion is sustainable and will last longer, with the US demonstrating the most advanced recovery in the current economic cycle.  This has resulted in inflation picking up in the US but moving sideways at low levels in the Eurozone, supporting monetary policy divergence.  Steady growth is supporting subdued market volatility, and this is supportive of growth assets.  Geopolitical risks have the potential to disrupt markets, with the North Korean missile and nuclear weapons program a major threat to regional stability.  However, an all-out war is a low probability event as the costs are too high on all sides.

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Monthly-Notes-December-2017