- December 16, 2019
- Posted by: Sunil Sharma
- Category: Investment Management
Watching the recent, last 3 months, rise in global bond yields, (e.g. French 10Y yield back above zero for the 1st time in July, 10Y German Bund rising from minus .59 to minus .25% and 10Y treasury yields rising from 1.48 to nearly 1.94%) indicates cautious change in the mood of Financial Markets suggesting the worst of the soft patch is behind us. In addition, reports from US-China trade negotiations suggest both sides see plenty of gain from a positive deal.
Global Financials (e.g. Bank stocks) which have been hit hard by negative interest rates and summer fears of recession are posting 52 weeks highs, supported by rising long dated govt. bond yields.
This momentum still needs to be supported by a significant rebound in business investments that buoys the global economy. There are positive indicators suggesting business investments to pick up by early spring next year as greater govt. spending by UK, and German Governments is certainly on agenda and the US Fed having more room for maneuver (lower interest rates with weaker USD) as part of the concerted effort to lift the global economy.
The above-mentioned arguments refer to well thought filter from markets noises hence profitable growth stocks and healthy returns from investments in Emerging Markets.