Welcome to the February edition of “Market Perspectives”, the monthly investment strategy update from Barclays Private Bank, which is also available to download as a PDF.
The start to the year has shown the impact of exogenous shocks as a risk to financial markets as opposed to a true weakening in fundamentals, something we highlighted in our Outlook 2020.
Tensions between the US and Iran rose significantly and unsettled investors in early January. In the alternatives article, we consider oil’s vulnerability to supply-side shocks and how gold can be used successfully as a diversifier in a multi-asset portfolio.
The debate on globalisation continues to be centre stage, with a signed “phase one” US-China trade deal. Arguably the main event of 2020 shaping the future of globalisation will be the race to the White House, which gets under way in February for Democrats, with the influential Iowa caucus and New Hampshire primary.
The record-setting rally on Wall Street continued in January, with all three indices at fresh highs as investors tuned out geopolitical “noise” and focused on improving global growth, accommodative central banks and consensus-beating fourth-quarter US earnings.
However, the impact of the coronavirus news on markets shows that investors are not far away from doses of reality, with elevated equity valuations and modest growth expectations tempering the potential for upside surprises.
After a strong 2019 for bonds, investors are looking for pockets of value. We look for opportunities for generating returns against a backdrop of negative yielding debt and the potential for sharp climbs in bond yields.
Finally, January’s news cycle was filled with both the World Economic Forum in Davos and wildfires in Australia. The link between them is climate change. Following our climate change insights in the Outlook 2020, we explore the physical risks that investors will need to consider to protect their portfolios from such extreme weather events.
Jean-Damien Marie and Andre Portelli
Co-heads of investment, Private Bank
The drought in the Alpes-Maritimes has worsened with 25 more towns now under reinforced water restrictions, bringing the total to 30. River levels hav...
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Chikungunya cases are rising sharply in southern France as the tiger mosquito spreads, with 23 locally transmitted cases in Vitrolles and 13 in Salon-...
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Orange-level heatwave warnings remain in effect today for the Alpes-Maritimes and Var departments. While high temperatures are expected, storms could ...
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French health authorities have identified 21 cases of listeriosis, including two deaths, possibly linked to pasteurised cheeses from the Chavegrand da...
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The heatwave gripping the south-east France is showing no signs of easing, with an orange heatwave alert extended for the Alpes-Maritimes and Var this...
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