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.


19th May 2020


Gregory Perdon Eren Osman



Here comes another silver bullet, in the form of a fourth spending package. As the previous rescue programme targeting small businesses literately runs out of cash, $320bn is on the way for pay cheque protection, $60bn to banks and credit unions, $75bn for hospitals and another $9bn for airlines. This is a truly massive cash injection and the bottom line is that the US economy needs it, as the five-week total unemployment claims reach 26.5 million.



Speaking of bullets, it looks like Italy just dodged one, escaping a downgrade by Standard & Poor’s, retaining its BBB rating (two notches above junk).

In France, President Emmanuel Macron’s government on Friday issued a decree stopping internet sales of nicotine patches and other products designed to help smokers quit and told pharmacies to limit sales. Why? Because the government has expressed interest in research that suggests the addictive stimulant could help protect against further COVID-19 infections. Germany has not been known for the avant-garde since the Expressionist period during which painters like Kirchner, Beckman and Macke broke all the rules. In a post-COVID-19 world however, Germany leads the way with an effort to get back to normal by opening shops. The fashionable neighbourhoods of Berlin, however, were still empty and shops shuttered even after they received the green light to open. Hopefully, this is not a sign of Avant-trends to come.



The apple never falls far from the tree. The unemployment trend taking hold in America is coming to a high street near you. The number of new jobs in the UK has dropped by almost two-thirds compared with last year.  Why do we watch that?  Job adverts are a strong indicator of the health of the employment market.

Looking for a good PE investment? Our bet is on PE with Joe Wicks, as online home exercise explodes to the upside during the lockdown. If you want an example of this trend, at-home spin class subscription service, Peloton saw stocks jump 5% after a record-breaking 23,000 live workouts in one day last week (this is not, however, a recommendations to buy, hold or sell). Too bad The Body Coach himself is not listed on the stock exchange!

The Chancellor has just announced the launch of Bounce Back Loans – which offer businesses up to £50,000, interest-free for 12 months – 100% guaranteed.

What could have been holding Rishi Sunak back from the full 100% backing? The lack of ‘risk retention’, which is a key ingredient to any credit market, but then again, there is a real crisis out there… How about the opportunity cost? There is no such thing as a free lunch; the UK government stands to quadruple borrowing plans over the next three months.  By how much? The Treasury said it would seek to raise £180bn over the period as tax revenues plunge. That is quite a number!

There is bad news for investors and landlords but good news for the high street as the government temporarily bans winding-up orders and aggressive rent collection tactics during this difficult period. Will we see some retailers trying to ‘arbitrage’ the system? Probably, but it could help save jobs, which would support demand and drive consumption – we think it is a good idea, on balance.



QE infinity squared…That is the new one, as the central bank of Japan (BOJ) unleashes more bond buying, taking us deeper into the rabbit hole and the Dark Arts of monetary policy. All this in response to the weakening economy and the lack of demand and inflation.



All eyes are more firmly focused on fresh Chinese economic data. The country is the first to emerge from the health crisis and could provide clues on the near-term flight path of the global recovery. Sadly, some initial reports are not brilliant as the rise in small business confidence was tepid and expectations were soft.  What are analysts saying? Sales are sluggish owing to a rapid deterioration in external demand and that is bearish for the near term.

Arbuthnot in the Press

Gregory Perdon, Arbuthnot Latham’s Co-Chief Investment Officer, will be appearing on Bloomberg on Wednesday 6th November to discuss global markets and investment opportunities. You can find him on Bloomberg TV at 8:00 am and Bloomberg Digital Radio at 8:40 am.

We are also delighted to announce that Gregory was included in Citywire Wealth Manager’s Top 100 fund selectors across the UK and Channel Islands.

Author -

Gregory Perdon

Gregory Perdon

Co-Chief Investment Officer, Arbuthnot Latham

+44 (0)20 7012 2522

Gregory Perdon has served as Arbuthnot Latham’s Co-Chief Investment Officer since 2011. He is Co-Chair of the Investment Committee, specialising in managing global cross asset mandates. He is also responsible for the firm’s Thematic Investment Research. He is regularly quoted in the financial press, guest hosts on Bloomberg Radio & TV and frequently serves as moderator, panellist or speaker at investment conferences in the UK and abroad. Gregory started his career at Oppenheimer after graduating from the American University of Paris in 1997.

Married, with four children, he enjoys raising funds for charities by climbing 4000m mountains in the Alps. Gregory holds both French and American passports, is a Chartered member of CISI and was named by Citywire as one of the Top 100 most influential wealth managers in the UK.

Eren Osman

Eren Osman

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

+44 (0)20 7012 2609