Since 2009 earnings have consistently recovered and are at a point, where many sectors, are earning at, or near, peak margin. Profits as a share of UK and US GDP are also near historic highs. This has been achieved despite an unbalanced global recovery. This paper outlines where the risks lie to forecasts on the upside and downside. It concludes that forecasts in the round are achievable but probably not exceedable. On balance the risk lies modestly on the downside in terms of consensus earnings expectations.
This note looks at the likely direction of UK monetary policy. We argue that a substantive rise in interest rates is unlikely, given the unbalanced nature of recovery, with blunt lending controls likely to be the Bank of England's policy tool of choice. The note outlines implications for equity, property and bond markets and concludes that negative real interest rates will drive real assets higher. Equities in particular should be prime beneficiaries and we re-iterate a bias towards risked sectors. Please contact us for a copy of the note
Walbrook's quarterly income product concentrates on the impact of a rising sterling on equity market income, given that approximately 35% of dividend distributions are paid in US$. We also outline stocks where income growth is strongest and outline our key income sector recommendations. Please contact us if you would like a copy of the report.
This note examines the increasing political risks the UK economy faces with the Scottish Referendum in September and the biggest political divide, in a generation, to be settled in May 2015. We examine the likely outcomes, political and market risks and the sectors most likely impacted. Please contact us for a copy of this report.
It is a long time since a British Budget has been worth writing about. We believe yesterday’s Budget was genuinely surprising and as radical as anything we have seen in the last 20 years. Amongst the welcome mundanity of a cut in beer and bingo tax and the spin on fiscal normalisation and budgetary control the plan to revolutionise the UK savings market, in time, could have a hugely positive impact on UK personal wealth and to a lesser extent GDP growth. Please contact us for a copy of the report.