Investment Management –

Market Musings

Welcome to Market Musings – a lighthearted commentary issued from time to time, summarising recent economic data, the drivers of stock and bond markets along with other key global developments.


Washington lawmakers deadlocked over the size of the next stimulus plan - are you surprised?  Well, you shouldn’t be because there is a presidential election to win as the Democrats and Republicans slug it out over the size of the next package leaving many households, businesses and local governments without the prospect of more support in the near term. Speaking of the election, how is fundraising coming along?  The Republicans raised $210m in August vs $364m for the Democrats which isn’t a brilliant showing for the incumbent…But, as I have been saying, don’t underestimate Donald Trump because in America, they love a great show.

For more on the potential market impacts of the US elections we would invite you to listen to the replay of our Around the World Virtual Talk hosted last week by Brabners, the UK law firm. During our light-hearted video talk and subsequent interview, I covered the topics and the questions which I felt most impacted UK investors such as: Brexit/Free Trade Agreement (FTA) developments, US election prospects, Sterling’s slide, Abe’s resignation and much more…  The replay is available online:

Global Investments: Your Questions in Focus


The UK economy expanded for the third consecutive month in July, helped by the relaxation of Coronavirus-related restrictions, but the rate of growth slowed leaving output significantly below pre-lockdown levels, hum, not great…

But the good news was the announcement of the first big post-Brexit trade deal with the world’s third largest economy, namely Japan! The agreement is expected to increase trade by £15bn a year – this a very welcome development after trade talks with the US are going ‘nowhere’ fast. 


The European Central Bank (ECB) met last week and I watched Christine Lagarde on TV skilfully respond to the battery of financial journalists peppering her with questions during the press conference. The bottom line? No real change of policy for the moment, because the ECB is already doing ‘a lot’ from negative rates and bond buying. But they did modestly adjust their inflation forecasts upwards for 2021-2023 (which in my view is wishful thinking). The real controversy however was around the recent rally in the value of the Euro. President Lagarde’s response was something along the lines of “we are monitoring the situation” which is code word in central banking speak for “we are annoyed by the situation”, but the reality is that central banks know that it’s a losing trade to bet against the currency market and in a sector where credibility is king – Lagarde doesn’t want to lose her throne… (which is a sensible strategy).


It’s looking to be a big week politically in Japan with Mr Suga widely expected to be selected as leader of the ruling Liberal Democratic Party (after PM Abe steps down for health reasons). And you have got to love his sense of self confidence… when questioned about his level (or lack thereof) of diplomatic experience, he responded: “When it comes to making decisions as a nation, I’ve been involved in all of it”.  It’s true Mr Suga lacks the charm and charisma of Abe, but Suga is considered a market friendly choice committed to the three arrows of Abenomics, so that should help support our allocations to Japan equities in portfolios.

In economic news, household spending dropped a real 7.6% in July from a year earlier as the Coronavirus pandemic continued to weigh on consumption, but Japanese bank lending rose a record 6.7% in August from a year earlier which is encouraging.


When economists think China, they often think trade, so what are the numbers and are they favourable? Chinese exports rose for a third month, increasing 9.5% in August year-on-year beating expectations, but imports fell 2.1%, perhaps demonstrating that domestic demand is still lacklustre. Banks are lending - with more new loans last month than the month before producing financial support and liquidity – this on the backdrop of an increase in money supply all making for a pretty conducive platform for Chinese economic (and domestic political) stability…

Arbuthnot in the Press

We speak with Katie Martin at the Financial Times about Tesla’s sky-high valuation.


Market Musings

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Author -

Gregory Perdon

Gregory Perdon

Co-Chief Investment Officer, Arbuthnot Latham

+44 (0)20 7012 2522

Eren Osman

Eren Osman

Co-Chief Investment Officer, Arbuthnot Latham & Co., Limited

+44 (0)20 7012 2609