Market Insight 2023

Our Sustainable/ESG focused portfolios are another year older but are we as investors another year wiser? In this note we review the five important lessons learnt in throughout 2023.

2023 has largely been a year of lacklustre performance with just 7 behemoth tech stocks in the US delivering virtually all the market performance. Whilst investors have piled into these AI related investments there has been a lot more to get excited about. In this note we review the current landscape and some views for 2024.

Stronger than expected economic data, resilient inflation and geopolitical tensions have all combined to unsettle investors. Fears now abound that the US Federal Reserve's prediction of interest rates remaining ‘higher for longer’ may actually morph into ‘higher for much, much longer’. Will the Fed be able to manage a soft landing for the economy or are we in for a far bumpier ride?

Last week, Fed Chairman Jerome Powell said that inflation is still too high despite easing slightly recently, and slower economic growth is likely needed for it to return to the central bank’s 2% target. This week we have had stronger US growth numbers, but weaker employment numbers. With rate decisions on a knife edge read how TAM are allocating to the fixed income markets.

AI has certainly become a household topic in 2023 and impacted many company and sector valuations. We discuss the issues and what we should be focusing on going forward.

Do strong stock market gains tell the whole story? James Penny discusses the story behind the story and concludes that its critical for clients to realise how important it is to spread investments over different scenarios, outcomes, and opportunities.

After a shocking 2022 for growth stocks, 2023’s Q1 market will go down in history as one of the most potent rallies in the history of growth investing. In this article we discuss the events that shaped the market and some thoughts for the remainder of the year.

We are now looking back on over a decade of artificially low interest rates put in place by developed country central banks, sparked by the financial crisis and a battle against deflation, thanks to China exporting low prices as globalisation took off. This period of easy money culminated in 2021 with unprecedented levels of monetary stimulus during the pandemic. There were suggestions that inflation was ‘dead’, amid an ‘everything rally’ where assets with little actual intrinsic value (such as speculative cryptocurrencies; non-fungible tokens (those strange pictures of apes if you remember); meme stocks; and a selection of profitless companies) were...

The past few years have been marked by political turbulence in the UK, ranging from ‘partygate’ scandals, to the proposed unfunded tax cuts which sent the UK economy into tailspin and Liz Truss packing after a shorter tenure than Ed Balls had on Strictly Come Dancing. However, since Rishi Sunak followed as Britain’s prime minister, there has been an air of control with no more hard-hitting headlines of political malfeasance or drastic calls for the removal of cabinet members. When Rishi took over the clear objective was to fix both Liz Truss’s and Kwasi Kwarteng’s large scale failure to sensibly...

Financial markets ended Friday in some turmoil, due to the dilemma over the strength of bank lending. In a rapidly appreciating interest rate environment, banks are usually the core winners as interest spreads and ongoing interest loan differentials cause bank profit margins to rise. Great news for banks which until Friday have been a core appreciating sector in markets globally. No mistake, rising interest rates are good for bank profits, until, that is, concerns about default rates - the ability of borrowers to cover interest payments or indeed repay loans - also begin to rise.

Globally, markets have been in a precarious place, one in which opportunities have been scarce and where we have watched economies walk the tight rope to recovery. Unfortunately, in 2022 China slipped. Weighed down by its stringent zero-Covid policy, distressed real estate sector, crackdown on tech firms, and geopolitical tensions with Taiwan. It’s no doubt, that Investors fuelled with pessimism after an onslaught of jumbo rate hikes, and the anticipation of a global recession has also delivered another blow to Chinese equities. However, the rhetoric is changing, and some optimism is resurfacing. China's policy of zero tolerance toward COVID-19 ending...