Reasons for investors to feel optimistic

Tuesday 22 October 2019

The "semi-permanent state of uncertainty" in global markets currently should not be seen as a negative, according to a visiting US Strategist from Canaccord Genuity.

Tony Dwyer, Chief US Strategist at Canaccord Genuity, who is a regular commentator on national news and business programmes in the US, was in the Channel Islands recently to share his views on how global issues on both sides of the Atlantic are affecting markets.

However. Mr Dwyer said the political friction and its effect on the economy was not an unprecedented situation. 

“Today we’re talking about Brexit and Trump and China like it’s some kind of unique sentiment backdrop in economic slowdown, but we also had global manufacturing slowdowns in 2011 and 2012 when the Eurozone nearly broke apart, and in 2015 and 2016 when commodities collapsed. Yes, we’ve had a long economic cycle, but we’re just emerging from the third slowdown within that."

When asked what would pre-warn us of a recession, Dwyer pointed to a big uptick in inflation expectations which would cause central banks to tighten monetary policy.

“Right now, global central banks are doing the opposite. Inflation and expectations of inflation seem benign. The economic cycle can last as long as central banks continue to and are willing to lend. While it may be right to take a more cautious approach, there are opportunities to add more risk in the months ahead.”