Igor de maack %282%29
August 11, 2017
The ambient cold war atmosphere has chilled investors and frozen investment decisions.

The ambient cold war atmosphere has chilled investors and frozen investment decisions.

Although the war of words between the US and North Korea should not be taken lightly, it is even harder to anticipate political events and decisions than to predict the year-end level of equity indices. A closer look reveals that the years covering the real,...

4 August 2017
The US banking sector ended at its highest level for 10 years.

American politics increasingly resemble a bad farce. The recent resignation of White House Communications Director, Anthony Scaramucci, provided a curious historical flashback to the Comedia Dell'Arte character Scaramouche, who was an unreliable and boastful character played by Italian actor Tiberio Fiorillo in the 17th century and referred to in a number of works by the renowned French writer Molière. After Michael Flynn and Rience Priebus, this third resignation leaves the impression that the new US administration is playing out some of the worst...

28 July 2017
America is back (great ?) again.

Whether America is great again may remain a subject for debate, but it has certainly been making news. Recently, the world’s greatest economic power has been firing on all cylinders: the S&P 500 is at a record high; blue-chip companies like McDonalds and Caterpillar have posted excellent results; the government is pursuing new sanctions against Russia, Venezuelan officials and Chinese companies operating in North Korea; and the Navy fired warning shots at an Iranian vessel in the Persian Gulf. Despite Trump’s isolationist campaign rhetoric,...

21 July 2017
Mario Draghi’s comments downward markets trend

Procrastination by central bankers is still causing slight tension on the markets. Indeed, Mario Draghi cooled off investors that had been warmed by Janet Yellen's reassuring message on US growth. The ECB will therefore not be making any announcements about its asset purchase programme before the last quarter of this year. Apart from this shift in communication, the ECB nevertheless underscored the endogenous strength of European growth.

In the US, the Trump administration is racking up failures in all attempts to implement its campaign promises...

14 July 2017
DNCA's weekly market outlook by Igor de Maack

Janet Yellen gave the markets a real boost by announcing that the US economy is in strong health and will be able to support future rate hikes. Her speech therefore restored bullish sentiment among equity markets after several weeks of hesitation. Of course the forthcoming reporting season still needs to confirm the trend. In China, the communist regime has proven incapable of curbing the real-estate bubble. It would even appear that as the authorities impose increasingly strict controls to stem the property boom, buyers pile more readily into...

7 July 2017
DNCA's weekly market outlook by Igor de Maack

The markets were once again caught off guard by a sudden rise in interest rates. The more hawkish and reflationary tone from central bankers also further steepened yields. The situation has become untenable in the European bond markets, where liquidity has dried-up as a result of the ECB repurchase programme. Investors are struggling to buy securities, particularly in the credit and high yield segments, triggering cries of “it’s a bid-only market” among the market-makers on the trading floors. Interest rates in the eurozone are clearly not coherent...

30 June 2017
DNCA's weekly market outlook by Igor de Maack

Just like the summer migration of millions of European families, investors are also mobilising by selling equity markets which have become more volatile. The VIX index rallied to 11.7 vs 10 over previous weeks. One explanation for the increase in volatility stems from increased awareness among bond markets, which had once again been put to sleep by long-term rates returning to their excessively low levels last seen in November.

The idea that long-term rates should track the underlying macroeconomic trend and therefore steepen, was triggered by a more...

23 June 2017
DNCA's weekly market outlook by Igor de Maack

Equity markets are taking a breather ahead of the summer recess. The bullish trend has levelled off, weighed down by fears over a further sharp fall in the oil price, with the reporting season yet to get underway, as some investors are looking to lock-in partial profits on their year-to-date performances. Certain markets and themes, or certain regions have indeed posted significant returns. Long term rates have fallen, bucking the expected trend. Steeper rates over the next few months could signal the resurgence of a bullish trend in equities,...

16 June 2017
DNCA's weekly market outlook by Igor de Maack

Markets remained unsettled by the oil price. Although indicators were all denoting a sustainable increase in the price of crude, the opposite occurred, despite the decline in US oil reserves and the OPEC decision to extend output quotas along with Russia, while credit lines to the US shale oil & gas industry appeared to be drying up. The number of US rigs continues to increase however and oil stocks are taking longer than anticipated to deplete. Furthermore, an increasing number of measures to promote energy transition, particularly in the...