Our Brief Weekly Economic and World Markets Overview from Quilter Cheviot
Germany enters recession?
by Richard Carter, Head of Fixed Interest Research
“Away from Brexit, the focus of global investors continues to be on the US-China trade war and the risk it poses to the global economy. Today’s data provided little encouragement after the latest German manufacturing PMI sank further into contraction mode at just 41.4, while the sub-index for New Orders was alarmingly weak at 37.9. This means that Germany is almost certainly in a recession at the moment despite ultra-low interest rates. Angela Merkel’s government is responding with a climate-related stimulus package of around €54bn, but that spending will be spread over a period of four years and seems unlikely to have a decisive impact on growth.…”
By Chris Beckett, Head of Equity Research
“Yesterday evening I depressed myself by watching Jeremy Corbyn and Dominic Raab’s interviews with Andrew Marr, but does the lamentable state of UK politics matter to an investor? Over the last decade our clients have profited greatly from our view that as long as the global economy keeps growing and central banks provide a backstop to provide monetary support during periods of relative weakness, the stock prices of high quality companies will continue to advance. Financial repression of bond yields has given little alternative, in debt markets, to stock market investments… ”