Quarterly Investment Letter

Within the first 2 months of the year, there was a self-feeding panic about the global economy slowing down and a potential recession looming in the US. The equity markets were down severely (S&P500 –13% and Eurotoxx50 -18%) only to eventually rebound significantly from mid-February. The market fears were not only crippling the world equities […]

Ignoring unpredictable exogenous shocks, we expect that economic growth will be positive but moderate. Although market sentiment is negatively biased we do not see the typical signals of an impending recession. For instance there is currently no widespread over-leverage and no inventory build-up to witness. We foresee that global economic growth will be consumption-led. The

As stated in the previous letter, global growth remains heavily affected by the antagonistic forces of deflationary impulses (energy, commodities), announced monetary tightening (the Fed and Bank of England) and continued monetary stimulus (ECB, Bank of Japan,…). Given limited potential output growth of the developed countries and ailing emerging economies, expect global growth to be

Global growth is happening but it remains sluggish. The economic impact of the gigantic QE measures, at global level, remain underwhelming. Please note that in Q1 2015 alone, more than 20 central banks lowered their interest rates!  At present, the Fed also behaves more dovish than anticipated. Market expectations for a rate hike have shifted

Finally, the US will be in the lead to promote economic growth. The majority of other countries are lagging behind. This economic mismatch brings the synchronicity of expansive monetary policies amongst the big players to an end. The Fed will ceteris paribus finally increase its key interest rates later in 2015 to be “ahead of

The key instrument to fix the current financial and economic crises is global growth. The hopes projected into the recovery of the economy were dented in September due to somewhat U.S. weak data. We believe, however, that the U.S. economy will continue to grow at its modest but steady pace. The disappointment regarding U.S. growth