Besides the usual outlooks, Brexit perils and central bank policy this week also treatises on income inequality, regulatory changes and the question of questions; does the market goes up or….?
- In their monthly publication or outlook “Economic and Strategy Viewpoint” Schroders is introducing two new scenario’s. “Trade wars” and “Brexit shakes the EU”. Both are introduced to reflect the increase in political risk in the world economy. The former is based on the election of Donald Trump as president of the US. In terms of their impact on global activity, both new scenarios are ultimately seen as stagflationary.
- In “Headwinds weaken but risks remain” ABN Amro argues that in 2016, the contribution of emerging markets to global economic growth will increase slightly for the first time in years. But off course there is no upside without a downside; the risk of setbacks remains as high as ever.
- Source is the master of the catchy title, who can beat “A Marxist view of the S&P 500”? But apart from the title they often raise an interesting question. Last week they took a look at Rising income inequality. Is that a good or bad thing for the owners of capital? For a different view on this subject we recommend the Netflix doc “Requiem for the American Dream”.
- AXA has been a steady contributor to the BREXIT discussion. According to them the “The economic impact of Brexit on the EU” is likely to be less than 0,5% of GDP. The bigger question in their view is therefore the implication of Brexit for the future of the EU from a political and institutional perspective.
- In “shifting insurance company allocations: implications for high yield”, J.P. Morgan takes a look at the likely consequences of proposed changes to regulatory capital requirements for U.S. life insurance companies as well as U.S. GAAP accounting changes for insurance companies that file U.S. GAAP. They expect a potential increase in structural demand for high yield bonds. Which will have implications for their asset allocation views.
- In the weekly asset allocation publication “Beacon”, Mikio Kumada from LGT argues that “A resumption of the bull market is not impossible”. Why so? Click the link and you will know!
- “Does China have too much debt?”. Does it? It ranks only in the middle of the world debt league with countries such as Japan, Belgium, Portugal, Ireland, the Netherlands and Greece recording significantly higher debt ratios. BNP Paribas explains.
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