- Depreciating dollars
As the US Federal Reserve continues to ease more aggressively than its counterparts, the US dollar has appeared vulnerable for the first time since the global financial crisis. Should this weakening become a longer-term trend, future investment outperformance is likely to come from different parts of the market than over the previous decade.
- Modern monetary theory
Although there will be equity market winners and losers from the US presidential election outcome, the extraordinary nature of the current backdrop may make the result less significant than it would otherwise have been. Neither major party is making any attempt to subscribe to fiscal prudence, with the unprecedented stimulus creating a very real chance that we see a sustained acceleration of goods and services inflation.
- China’s latest credit boom
As China’s economy ground to a halt, monetary and fiscal policy shifted in favour of economic stability at the expense of financial stability. Credit growth has accelerated, stimulating the housing market and supporting infrastructure investment. Notwithstanding ongoing trade tensions, we believe the conditions are in place for Chinese equities to continue to outperform, with increasing commodity consumption likely to support commodity exporters and the materials sector.
This is a financial promotion. These opinions should not be construed as investment or any other advice and are subject to change.
This document is for information purposes only. Any reference to a specific security, country or sector should not be construed as a recommendation to buy or sell this security, country or sector. Please note that portfolio holdings and positioning are subject to change without notice. Where the portfolio has exposure to hedge funds, gold, private equity and property via publicly quoted transferable securities, there are additional risks associated with these sectors.
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Newton Investment Management Limited (Newton) is authorised and regulated in the UK by the Financial Conduct Authority (FCA), 12 Endeavour Square, London, E20 1JN. Newton is providing financial services to wholesale clients in Australia in reliance on ASIC Corporations (Repeal and Transitional) Instrument 2016/396, a copy of which is on the website of the Australian Securities and Investments Commission, www.asic.gov.au. The instrument exempts entities that are authorised and regulated in the UK by the FCA, such as Newton, from the need to hold an Australian financial services license under the Corporations Act 2001 for certain financial services provided to Australian wholesale clients on certain conditions. Financial services provided by Newton are regulated by the FCA under the laws and regulatory requirements of the United Kingdom, which are different to the laws applying in Australia.