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Tatton Asset Management Plc

Muted replay of 2015 or end of cycle approaching 2019?

It certainly helped nerves this week that the US was distracted by their Thanksgiving celebrations and politics in the UK calmed down, after the Eurosceptic Tory rebels’ spectacular failure to deliver on last week’s promise to bring about a vote of no confidence against Theresa May’s leadership. Still, stock markets took little notice and continued their decline, fanning widespread discussion over whether a 2019 global economic downturn has become all but certain, now that risk asset markets seem to be anticipating one.

As discussed last week, this feels reminiscent of late 2015 and early 2016, to the point of a déjà vu. Back in Q1 2016, ‘Mr. Stock Market’ was proven wrong by reaccelerating economic growth on the back of Chinese fiscal stimulus and a windfall from lower oil prices, as well as falling credit yields. This time around there is again stimulus from China, though it is admittedly less decisive. But added to this we also see considerable (yet waning fiscal) stimulus from the US. The oil price and bond yields have once again fallen, but nowhere nearly as much as back in 2016.

 

Tatton Asset Management PLC (LON:TAM) offers a range of services to directly authorised financial advisers in the United Kingdom. The Company provides on-platform portfolio management, regulatory, compliance, and business consulting services. Tatton Asset Management comprises of Tatton Investment Management, Paradigm Partners, and Paradigm Mortgage Services divisions.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.