News & Research

The market is currently driven by the central banks. According to Christoph Schon, Senior Principal in Applied Research at globally integrated index provider Qontigo, “What we currently see is the tech market being driven by monetary policy and the response of the central banks to inflation and the job market.”

Christoph Schon, Senior Director of Applied Research at Qontigo, said the current correlation between stocks and bonds is really of concern to multi-asset investors. “Stocks and bonds (are) moving in the same direction, which we haven’t really had in a very long time,” said Schon.

“The Bank of England is facing a very, very difficult dilemma right now,” Christoph Schon, Senior Director of Applied Research at Qontigo, told me on the phone from London yesterday. “The bank wants to quiet down markets and stabilize credit conditions in the UK.”

Conventional wisdom has it that higher interest rates make a currency more attractive to foreign investors, whereas a weaker exchange rate can be good news for export-oriented economies. Neither is true for the United Kingdom right now.

Our stress tests generated in Axioma Risk indicate that further rate hikes could mean even more bad news for stocks and bonds alike, even if, or rather because, they help bring down anticipated consumer-price growth.

Restoring price stability will take some time, says Fed Chair Powell. Christoph Schon examines market weakness following Powell’s commentary. He looks at movement in treasury yields FVX, TNX, and TYX. He then spotlights the energy ETF, XLE.

This year’s market volatility and macro shocks have raised a challenge to the thematic investing boom, but also offer a chance to reappraise the benefits of the investment approach. Overall, the funds continue to attract net inflows as investors seek alternatives to traditional sector-based portfolios in their search for long-term outperformance.

Term spreads have risen in multiple regions around the globe, as long-term sovereign yields soared amid rising (expected and actual) inflation but central banks took longer to raise short-term interest rates. The impact of this on international real estate has mostly been positive over the past two-and-a-half years.

The market volatility and macroeconomic disruptions of 2022 have raised a challenge to the thematic investing boom, but also offer a chance to reappraise the benefits of the investment approach.

Amid rising inflation worries and expectations of additional interest rate hikes by the Federal Reserve, U.S. Treasuries have undergone a huge sell-off in recent weeks with no signs of reduced pressure ahead — but sources said there’s still an important place for the embattled bonds in institutional portfolios

The Russian invasion of Ukraine spooked equity investors around the world, but losses were not distributed equally across all sectors, with some industries even exhibiting positive returns. This opens up opportunities for more focused strategies such as thematic investing.

With inflation at multi-decade highs, a tightening of monetary policy appears inevitable. Since November, a growing number of central banks — most prominently the Bank of England — have begun to raise rates, and the Federal Reserve is expected to follow suit in March.