Investment perspectives - autumn 2019
Capital markets update
20 Nov 2019
In this capital markets update, Chris Arcari shares the latest trends in the market.
The ongoing trade dispute between the US and China, and its disruption to global supply chains, continues to impact both realised and forecast global growth. GDP growth for many countries has slowed, although consensus forecasts still suggest most major economies will avoid recession next year. The IMF this month forecast global growth falling to 3.0% in 2019, its lowest level since 2009 and a 0.9% downgrade from the same forecast last summer (Chart 1). In 2020, growth is expected to moderate further in the world’s biggest economies, although global growth is forecast to rebound slightly as emerging economies outside China accelerate.
Chris shares the latest trends in the market, including:
- Global sovereign bond yields continued their slide. Gilts followed the global trend and nominal yields touched record low levels in August: prospective returns from current levels look derisory.
- Investment-grade credit spreads are a little below long-term medians on a ratings adjusted basis, while speculative-grade valuations look demanding.
- Despite recent concerns about trade and an ongoing
industrial slowdown, global equity indices edged higher in
- In aggregate capital values have continued this year’s
steady fall, although annual rental growth has arrested its
downward slide in recent months, remaining marginally
positive, but well below CPI inflation.
To find out more, read the full capital markets update here.
This article is from our Autumn edition of Investment Perspectives - you can access the full publication here.