Investment Clock insights

China and Trump could deliver another volatile summer for markets


Trevor Greetham

22 May 2017

We could see a pickup in volatility this summer with the economic upswing starting to cool off and geopolitical risks running high. But eight years on from the Great Recession, there is still little sign of the late cycle surge in wages that leads central banks to raise interest rates and call the expansion in the world economy to a halt. The bull market in equities has further to run and we stand ready to buy dips. An overweight position in global high yield bonds should pay off if an increase in volatility doesn’t materialise and markets simply muddle through the summer period.
 The latest edition of the Investment Clock can be downloaded here.

We could see a pickup in volatility this summer with the economic upswing starting to cool off and geopolitical risks running high. But eight years on from the Great Recession, there is still little sign of the late cycle surge in wages that leads central banks to raise interest rates and call the expansion in the world economy to a halt. The bull market in equities has further to run and we stand ready to buy dips. An overweight position in global high yield bonds should pay off if an increase in volatility doesn’t materialise and markets simply muddle through the summer period. 

The latest edition of the Investment Clock can be downloaded here.

Chart 1: A move away from the Investment Clock “Overheat” would be positive for bonds

Source: RLAM. For illustrative purposes only

Chart 2: Investor Sentiment and Stock Prices – be greedy when others are fearful


The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.