Gibraltar Chronicle April 2021

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary April 2021

America’s financial titans are coming to a consensus: We are on the early edge of the biggest economic boom since World War II, with the promise of years of growth after the containment of the pandemic. They might be wrong, but all point to the same data – this expansion will be kickstarted by trillions in spending from Presidents Trump and Biden, the Fed’s easy money, and piles of cash that consumers and companies accumulated during the COVID shutdown. This is likely to be a global phenomenon, because the Biden administration’s spending will have ripple effects around the world. Governments’ actions in response to the pandemic has raised global GDP growth by a full six percentage points, estimates the IMF, adding that “the global growth contraction last year could have been three times worse than it was”. Still, total output shrank so much – by a stunning 3.3% in total – that there’s now an unprecedented amount of slack in the global economy. In other words: The world has more potential upside than ever.

Gibraltar Chronicle March 2021

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary March 2021

There’s nothing like a week-long of selling to get the bullish juices flowing once again. After the S&P 500 set a new all-time high on 25th January, GameStop hysteria seized the market. A relatively small set of retail investors, embracing YOLO (“you only live once”), pushed the shares of the troubled retailer up ten-fold to unsustainable highs, an epic short squeeze that slammed multiple over-exposed hedge funds. Although the frenzy occurred amongst a small group of investors, fear grew that an equity asset bubble had been discovered, and broad selling took over. By the end of January, the S&P 500 had fallen 3.7%. Conveniently, the index closed right on its 50-day moving average. With investors concluding that GameStop was an isolated episode of madness, YOLO was pushed aside by FOMO (“fear of missing out”) and the market embarked on a strong recovery run.

New Website

We are pleased to announce the launch of GAM’s new website www.gam.gi. This has significantly upgraded our last offering with an updated design that it is easy to read and improved performance on mobile phones and tablets. We would like to thank Nick Feek of Business Logic (www.businesslogic.gi) for the design and programming undertaken. We […]

Gibraltar Chronicle February 2021

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary February 2021

In 1849, Jean-Baptiste Alphonse Karr wrote, “The more things change, the more they stay the same”. Now, over 170 years later, technical analysts are using his prophetic statement to warn investors of a potential top. The stock market is indeed high and is characterised by typical market exuberance – whether it is historically low put/call ratios, record-high active investor equity exposure, record levels of margin debt or very high levels of bullishness on investment polls. At these times, it is worth recalling Humphrey Neill’s 1954 book, “The Art of Contrary Thinking,” where he wrote that the public is often right during the trend, but wrong at both ends.

Gibraltar Chronicle January 2021

Our latest article on the stock market, as published in the Gibraltar Chronicle.

Market Commentary January 2021

We wish all our clients and readers a very Happy New Year. 2020 was a remarkable year, by any stretch of the imagination, and one I am sure we would all like to put behind us. Looking forward to the next 12 months, we are, by our very nature, optimistic. Widespread vaccination programmes are expected to be in place worldwide by June. Unemployment should drift downwards as many, though not all, workers are called back to work and interest rates are forecast to remain low. Ironically, it is China that will continue to lead global growth. There are risks – global growth could disappoint, and valuations are high, almost predicting perfection. But with a calmer political environment, both in the US following Biden’s victory and the UK following their free trade deal with the EU, we see stock markets returning close to their long-term averages of 8-10% for the year.

Market Commentary December 2020

Our latest article on the stock market, as published in the Gibraltar Chronicle.