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Was the Q4 Sell-Off the Beginning of the End?
The year 2018 will go down in the history books as one of the most challenging we have faced in recent times, with price action in the fourth quarter being particularly brutal and difficult to respond to. When we wrote our outlook for 2019 at the start of December, we were reasonably cautious and felt it possible that prices could dislocate from fundamentals during the year, if markets started to price in the increasing likelihood of a more meaningful downturn or recession in 2020. We were not expecting this to happen in December, but it did, and it has left investors wondering whether this is the beginning of the end of the cycle, and whether months like December will be commonplace in 2019.
“So here it is, Merry Christmas…”
“…everybody’s having fun. Look to the future now, it’s only just begun.”
Powell Talks the Market Down
The dust is slowly settling after Wednesday’s FOMC rate decision, and more importantly the following press conference where Chairman Jerome Powell literally talked the market down.
The ‘Rodney’ Blog 2019: Fake Recession Ahead
“This time next year, Rodney…”
With ABS Spreads at Pre-QE Levels, Where is the Value?
Bloomberg reported on Monday that since the European Central Bank started its Corporate Sector Purchase Program (CSPP) in June 2016, it has purchased €177bn of investment grade rated corporate bonds. Initially, as expected, spreads tightened rapidly, but since the first quarter of 2018, they have been gradually widening back out to pre-CSPP levels.
Difficult Markets, But a Time of Plenty for Stock Pickers
It is that time of year when we traditionally look ahead to the new year and make predictions on the performance of various asset classes, sectors and industries.