Tilney Investment Podcast

Global equity markets are rallying thanks to the buoyant US economy, which is being driven by stealth stimuli such as record immigration and increased demand for goods and services. But how long is this set to last and what are the risks for investors?

Diversifying portfolios has never been so vital as conflict in the Middle East escalates and spreads. We also consider the performance of the energy sector and gold

Global markets are broadening out now and as equity values rise this wealth is helping to generate economic stimulus in several ways, which we explore here.

Global economic growth has been resilient while inflation has been slowing. We look at the reasons for this and why central banks are under pressure to balance growth and inflation.

In 2024, voters will go to the polls in a record 77 countries. We explore how they will impact economies and stock markets. We also consider how supply chains and shipping routes are affected following Houthi attacks on shipping in the Red Sea.

Equities are set to outperform bonds, boosted by company sales growth and elevated profits. Bonds, meanwhile, should benefit from interest rate cuts, which could lead to higher bond prices. The Artificial Intelligence (AI) boom is expected to continue in 2024, but the US stock market should broaden out beyond this sector into unloved areas like energy and small caps.

Despite global economic uncertainty, investors took comfort from an impressive set of company earnings in the third quarter of 2023. Gold has hit a high this month driven by an outbreak of optimism that US interest rates have now peaked. Equities rallied partly thanks to the Artificial Intelligence (AI) boom, but appetite for these stocks may not last.

In November's episode of the Evelyn Partners Investment Podcast, Cherry Reynard and Daniel Casali look at the financial market implications of the conflict and the humanitarian crisis unfolding in the Middle East. The tragic loss of innocent, civilian lives in the region is shocking and our thoughts are first and foremost with all those affected. While the impact on the financial markets has been limited, it may have longer term implications for the oil price and the green energy transition.

Until recently, inflation appeared to be in retreat. Central banks felt sufficiently confident to pause on interest rate hikes. However, a blip in the inflation figures has worried investors, who fear more US rate rises could emerge as a result. The main culprit has been oil prices, which have moved higher in response to supply cuts from OPEC, Expectations are still for a ‘soft landing' in the US, with any recession likely to be short-lived and shallow. The UK and Eurozone face greater economic headwinds, In the UK, employment data has seen a notable deterioration in recent months. Nevertheless, while recession is more likely, it is not expected to be deep or persistent. Emerging markets have been pulled lower by the weakness of China this year. There is no imminent revival in sight for China, but other emerging markets have been doing well. Latin American countries have been cutting rates, while India has seen significant growth. There are plenty of idiosyncratic opportunities to exploit.

The services sector continues to drive growth in the global economy, despite rising interest rates. Spending on services is being driven by savings built up during the Covid era, and pent-up demand for areas such as travel and leisure activities. Along with resilient labour markets, this has continued to push up consumption. In the near-term, there is no sign of this stopping. Unemployment is still low and consumers still have money to spend. Phenomenon such as Swiftonomics – the blockbusting billion dollar tour by Taylor Swift – have shown the consumer's ongoing propensity to spend.   Manufacturing, however, remains on its knees, with little hope of a revival in the short-term. Nevertheless, CEOs may be encouraged by the recent equity market rally to revive investment in production, allowing the sector to recover.

The S&P 500 has just capped its longest winning streak in over a century, encouraged by better data on inflation, economic growth and corporate earnings. However, data remains volatile and it is possible that markets have moved too far too fast. Valuations now leave little margin for error. July saw the Federal Reserve and European Central Bank raise rates once again, though many economists expect this to be the peak. However, central banks are keeping their options open and have made it clear they will respond to new data as it emerges. There are also strains in the fixed income market, with credit spreads tightening as economic data improves. While there are still opportunities in both equity and fixed income markets, it argues for a selective and balanced approach to asset selection.

With the S&P 500 up 20% since October 2022, another bull market has begun. To date, it has been led by a narrow group of technology companies, but there are signs it may broaden out in the months to come. This may create momentum for global stock markets in the second half of the year, even as a recession looms. Consensus expectations are now for a less severe recession than was expected a year ago. Falling expectations of peak US interest rates have also helped stocks to rally too. The weaker dollar may also be a swing factor for investors. Dollar depreciation is usually indicative of an improving global growth backdrop; it tends to depreciate at times of greater certainty on the economic outlook. These factors may combine to create a better outlook for stock markets in the remainder of the year.    

2023 has seen a surprising revival in the technology sector. This defied the grim predictions of some investors who saw rising interest rates marking an end to the decade-long dominance of technology stocks. The sector's strength has partly been driven by the excitement around artificial intelligence and its potential for disruption. Artificial intelligence could be a major force over the next decade. Its influence is likely to be felt in more industries, and investors need to align themselves with the disruptors rather than the disrupted. Ultimately, new and as-yet-unseen opportunities will emerge as AI grows in power and capability.    In the shorter-term, the resolution of the debt ceiling has allowed markets to breathe a sigh of relief. In the end, the impact for bond and equity markets was minimal. All eyes will now turn to the next move from the Federal Reserve and the timing of its next rate rise.

The gold price has been rising, reaching a record high at over $2,000 per ounce in April. This suggests markets see an imminent end to the rate rising cycle in the US and further falls in the Dollar. Buying from foreign central banks is also driving the gold price higher, as countries seek to diversify their asset bases away from Western government bonds. Markets believe inflationary pressures are ebbing. In the US, March's CPI data showed the level of inflation at a two year low, while lead indicators such as falling job openings and lower selling prices show core inflation starting to come down. The exception is the UK, where inflation remains stubbornly high. The Dollar has been weakening in response to an expectation of slower rate rises from the Federal Reserve. This may continue as other countries, such as the Eurozone, continue to raise rates, Foreign exchange traders may also pay attention to the growing deficit in the US, which increasingly requires foreign capital to support it.

Financial markets have been dominated by the fallout from the banking sector turmoil in March. The problems at Silicon Valley Bank and Credit Suisse were more a consequence of poor management than a broader fragility in the global banking system, but it has still unsettled bond and equity investors. It has also prompted a reappraisal of interest rate expectations. Bond markets now expect the Federal Reserve to cut sooner. They believe banks are likely to rein in lending, which will slow economic growth and give central banks greater flexibility on future rate rises. The impact for stock markets is not yet clear. They remain trapped in a holding pattern, waiting for greater clarity on interest rates. It is possible to build a gloomy or optimistic scenario. While inflation still looks sticky and some economic weakness appears inevitable, China's reopening is fuelling growth and a degree of bad news is already priced into markets.  

There has been encouraging data on the health of the global economy in recent weeks, with employment, inflation and consumer spending all giving cause for optimism. There is increasing confidence that a hard landing may be avoided, in spite of higher interest rates. However, financial markets have wobbled in recent weeks. In particular, investors continue to worry about further rate rises from the Federal Reserve, even though inflationary pressures appear to be easing. The US central bank has reiterated its commitment to price stability above economic growth. Closer to home, the UK has agreed a new Brexit deal, potentially solving the thorny issue of the Northern Ireland protocol. This should be a boost for UK businesses, at a time when the domestic stock market looks cheap relative to its peers and its dividend yield is high. This may boost investor confidence in the UK market.

Global economic data is delivering some mixed messages on the outlook for the year ahead. There are encouraging signs on inflation, with energy and food prices gradually falling. However, employment data remains buoyant and a shock jobs number at the start of February gave investors a jolt. The major central banks of the US, UK and Eurozone remain tight-lipped about whether a turn in the interest rate cycle is likely. They all raised rates in their last meeting, but at a slower pace than seen in 2022. Bond yields ticked higher in early February, suggesting that investors no longer have faith that a pivot is imminent. Equity markets reversed their recent run of strength as technology earnings disappointed. While these are economically sensitive sectors, it is clear that consumer and business spending is slowing. While valuations are still compelling in some areas, a cautious approach is necessary.  

Better news on inflation has sent markets higher in the early weeks of 2023. The reopening of China has seen a strong performance from Asian markets, as the Government puts its zero-Covid strategy behind it. Easing supply chain bottlenecks and falling commodity prices are also improving risk appetite. However, recession remains a plausible outcome for most of the world's largest economies. Consumers and businesses need to adjust to higher costs and a tougher environment for borrowing. Against this backdrop, some caution is still warranted.    Yield may prove an important factor in the year ahead. High-dividend companies are likely to be popular with nervous investors. They may gravitate to sectors such as energy, consumer staples and utilities, which all have high yields. Fixed income also has some appeal after a tough year.

There's been a meaningful rally in equity markets since mid-October, fuelled by hopes that inflationary pressures are moderating. Resilient corporate earnings have also played a role in supporting markets. However, few believe stock markets have turned a corner permanently, with plenty of bad news still to digest in the year ahead. On the other hand, bonds could be back. As yields have risen and markets have priced in higher rates, conventional government bonds have more appeal. Ultimately, they may be able to resume their traditional role in a portfolio – income generation, capital preservation and diversification. There has been better news on US and European inflation, with some easing of inflationary pressures. While this has buoyed investors, it is unlikely to prompt a significant change of heart from the Federal Reserve – at least in the short-term.

Financial markets have remained volatile over the past month. In some cases, notably the UK, there were clear reasons for concern. However, some stability has returned to UK gilts and equities since Rishi Sunak has taken the reins as Prime Minister, rolling back the measures in the mini-budget and introducing greater fiscal discipline. For the rest of the world, it's just a question of watching the Federal Reserve. As Cherry Reynard and Daniel Casali discuss in this podcast, there are brighter signs on inflation, with expectations falling. It appears many developed market economies may yet avoid a wage-driven inflationary spiral. Financial markets are also watching the trajectory of commodities markets. While oil prices have dipped recently, oil cartel OPEC+ seems determined to keep prices higher. Energy is becoming a geopolitical weapon, and ongoing high prices may disrupt the best-laid plans of the Federal Reserve.

The Chancellor's mini-budget has unleashed another round of volatility on the markets, with UK bond and currency markets in the eye of the storm. However, after a U-turn on the more controversial elements of the fiscal package and intervention from the Bank of England, a fragile stability has returned. Longer-term problems remain. Inflationary pressures continue, pushing interest rates higher. The squeeze on living costs is intensifying, with mortgage rates and energy bills rising. It is an unsettling moment for investors, with many wondering how they should respond. Volatility is part and parcel of investing. The stock market needs to be approached with a long-term view and many of these problems will resolve over time. There are signs that inflationary pressures are starting to ebb, for example. As Cherry Reynard and Ben Seager-Scott explore in this podcast, all markets offer opportunities. It's just a question of looking in the right places.  

Following Fed Chair Powell's hawkish speech at Jackson Hole at the end of August, a Fed “pivot” away from their plans to raise interest rates is unlikely for the rest of 2022. The US economy appears to be overheating – inflation is at multidecade high, and the Fed is looking to match labour demand with available supply, to reduce inflation risk. But there is good news for the US when it comes to inflation: US CPI inflation stayed flat in July and is expected to do the same in August. Yet there is still upward pressure in the underlying rate of US inflation, and political pressure to bring down the cost of living. Eurozone consumer confidence in August was lower than the depths of the pandemic in April 2020. In contrast, the higher inflationary environment has meant improved pricing power for listed European companies. Vulnerable sectors include heavy energy dependent users including the auto sector and the European consumer who is probably spending a lot more on energy and less in the shops. For the UK, we have a new PM making big promises, but inflation remains the big unknown. A lot depends on what the new PM will do to mitigate the rising cost of energy. Consumers and businesses are tightening their belts to pay for the sharp energy cost increases. Most consumers are choosing to save less and borrow more to get through. And, next year is looking tough for high streets up and down the country as economists forecast no real household consumption growth in 2023.

Central banks were as good as their word in July, with significant rate hikes from the Federal Reserve and Bank of England. In seeking to tackle persistent and rising inflation, policymakers have been forced to look through worsening economic data. The US is already in a technical recession after two quarters of negative growth and the Bank of England predicts that the UK's economy will weaken significantly in the fourth quarter.   Financial markets have managed to shrug off the recent run of bad news. There are signs that investors may have started to anticipate some moderation in future rate rises as the economic data turns. However, central banks continue to show their resolve and, as yet, there is no apparent peak in inflation.  Europe has been in the eye of the storm on the global energy crisis and faces a series of risks in the months ahead. Should energy supplies fail, it could bring considerable pain for industry and consumers. How bad could it get for the Eurozone economy in the second half of the year?

In July's episode of The Evelyn Partners Investment Podcast Cherry Reynard chats to Daniel Casali, Chief Investment Strategist, about an unsettled period in UK politics and asks whether, after a choppy six months, investors can look forward to a better second half of the year.  

Stock markets were volatile ahead of the Federal Reserve's decision on interest rates. The 75bps rise was higher than expectations but sent a clear signal that the central bank would put tackling inflation ahead of economic growth. However, higher rates make recession more likely. In this month's podcast, Daniel Casali gives his verdict on whether the world's largest economies are likely to see an economic downturn, while Ben Seager-Scott looks to make sense of febrile markets. Increasingly, a lot of bad news is reflected in share prices and bond yields. Should this be grounds for optimism? Ben and Daniel give their verdict on the stock market and global economy for the second half of 2022. www.evelyn.com  

In May's episode of the Tilney Investment Podcast Cherry Reynard chats to Ben Seager-Scott, Head of Multi-asset Funds, and Daniel Casali, Chief Investment Strategist about bond yields, inflation and opportunities for investors. For more information on Evelyn Partners, please head to www.evelyn.com

April's episode of the Tilney Investment Podcast features Cherry Reynard in conversation with Ben Seager-Scott, Head of Multi-asset Funds, and Daniel Casali, Chief Investment Strategist. They discuss market volatility, inflation and the outlook for the global economy and stock markets.   For more information on Evelyn Partners, please head to www.evelyn.com

In the March episode of the Tilney Investment Podcast, Chloe Stages, an associate investment director, joins Ben Seager-Scott, Tilney's Head of Multi-asset Funds. The conversation focuses on Russia's invasion of Ukraine as well covering energy prices and the easing of Covid restrictions.

Charlie May, an investment director from Tilney's London office, joins Ben Seager-Scott, our Head of Multi-asset Funds for our February episode of the Tilney Investment Podcast. They discuss the eventful first month of 2022, the outlook on global equities, interest-rate hikes, and rising tensions in Ukraine.

In January we're looking back over 2021 and discussing the outlook for 2022. Listen to Sam Coppin, an investment director from Tilney's London office, putting Ben Seager-Scott, our Head of Multi-asset Funds through his paces. They discuss inflation, quantitative tightening, asset classes in a rising interest-rate environment and more. 

This edition of the podcast features Rohan Patel, an investment advisor from Tilney's London office, talking to Ben Seager-Scott, Head of Multi-asset Funds. Tune in as they discuss the impacts of the Omicron Covid variant announcement, UK and US central bank's policy, the outlook for oil and the recent US–China summit.

This edition of the podcast features Sam Myers, an investment director from Tilney's Liverpool office, talking to Ben Seager-Scott, Head of Multi-asset Funds. Tune in as they discuss finances following the recent Budget, fundamental economic drivers, which currently appear quite robust, sustainable investing in light of COP26 and why rates look set to rise earlier than expected.

This edition of the podcast features Victoria Newlands, an Investment Adviser from Tilney's London office, talking to Ben Seager-Scott, Head of Multi-asset Funds. Tune in as they discuss a range of contributing factors to the battering of markets including: the end of furlough schemes and business continuity loans, a surge in energy prices, the US debt ceiling and China's bubbling Evergrande issues.

In this September episode, Robin Adamson, Director of Investment Management from Tilney's Glasgow office, talks to Ben Seager-Scott, Head of Multi-asset Funds.  They discuss how August is typically a month of sentiment effects, including the Jackson Hole Symposium, inflation and the US debt ceiling.

This edition of the podcast features Tom Hawkins, an investment director from Tilney's London office talking to Ben Seager-Scott, Head of Multi-asset Funds. They discuss the latest topical themes dominating our markets: Chinese regulatory crackdowns, concerns over an overheating economy and rising inflation.

This edition of the podcast features Lucinda Johnson, an investment director from Tilney's Birmingham office talking to Ben Seager-Scott, Head of Multi-asset Funds. At the halfway point, they look back at the first six months of 2021, discussing the latest Federal Reserve (Fed) meeting, inflation and markets.

James von Simson, a director within London's Tilney office, and Ben Seager-Scott, Tilney's Head of Multi-asset Funds, discuss growth, the latest market trends, and inflation. There's been a lot around inflation at present, particularly around the backward-looking numbers, in both the press and news, and how they interplay with the forward-looking story. These numbers need to be distinguished, but are there short-term distortions affecting them? Has inflation peaked in May? Could the Covid-19 restrictions be covering the effects of Brexit? Is Europe's strong performance a potential foreshadowing of a stronger UK market?

This edition of our podcast features and Debbie Hair, a senior investment manager, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss the latest market trends as the euro strengthens and confidence returns, but could fiscal stimuluses be the gamechangers for the US markets running hot?

This edition of our podcast features Lewis Cohen, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss equity markets, monetary and fiscal policies and their impact on the global economy.

This edition of our podcast features Jonathan Cowan, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss the recent events affecting markets as we navigate the latest phase of the pandemic crisis.

This edition of our podcast features Caroline Connell, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss the latest market news and the possibility of negative interest rates in the UK.

This edition of our podcast features Robin Adamson, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss the challenges facing the global economy in 2021.

This edition of our podcast features Sam Myers, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss Brexit, developments in the US since the elections and the progress that has been made with vaccines.

This edition of our podcast features Sam Coppin, Director of the Investment Advisory Service, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss how US election results could affect the markets and the potential vaccine breakthrough in the fight against Covid-19.

This edition of our podcast features Emma Sterland, a Financial Planning Partner, and Gareth Lewis, Tilney’s Head of Investment Strategy. They discuss what to do with cash in today’s challenging interest-rate environment.

This edition of our podcast features Victoria Newlands, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They discuss the latest political events and the outlook for the economy.

This edition of our podcast features Caroline Connell, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They look at what has been happening in the markets and discuss the UK economic outlook.

This edition of our podcast features Harry Morgan, an Investment Director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They look at what has been happening in the markets and discuss current investment themes.

This special edition of our podcast features Rebecca Davidson, an investment director, and Louie French, Tilney’s Senior Research Analyst. They talk about how Environmental, Social and Governance considerations are as relevant as ever in the wake of the virus.

This edition of our podcast features Eline Lofgren, an investment director, and Ben Seager-Scott, Tilney’s Head of Multi-asset Funds. They talk about the recently announced Government spending plan and how monetary policies could affect investors.

This edition of our podcast features financial planners Tim Stalkartt and Mark Pollock. They discuss the Government’s options to pay for Coronavirus and possible changes to taxes.