The major boost to global equity markets this year has been the 180-degree policy U-turn by the Federal Reserve, from tightening to loosening interest rates, and from quantitative tightening to the renewed provision of liquidity to financial markets.
This has more than outweighed the impact of flat corporate earnings growth and relatively high absolute valuation levels. However, the increased uncertainty about monetary policy this has created, together with the unpredictable and escalating trade war between the US and China, have resulted in a higher frequency of volatility spikes and some violent sector rotation. Global equities research: Spotting the 'gorillas' and other primates Going forward, with the Federal Reserve apparently on hold for now, this major liquidity driver of asset prices will be less supportive, leading t...
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