Global Economy – Q4 Investment Update

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  • October 10, 2019

The global economy continues to slow, driven by the Eurozone and China, although all major economies have seen slowdowns. Concerns have arisen over German manufacturing and some emerging market economies (Eg. Argentina), however, there are still areas of strength, particularly from the US. Inflation remains muted and central banks are likely to continue to keep policy loose. There is also the prospect of greater fiscal stimulus from several key economies, including the UK.

Forward-looking PMI data continues to be weak and have sub 50 readings. The data for the US manufacturing sector for August concerned markets as this was an area of the global economy that had held up well so up till now. Nevertheless, the weakest areas of the global economy appear to now be reaching a bottom with the rate of decline slowing in Germany and China, although still negative in absolute terms. Given the persistent negative sentiment, a small turnaround in fortunes may mean a positive market surprise, especially for the Eurozone.

Below is the US unemployment monitor. Following the warning signs in March where the unemployment rate spiked above the 12ma line, the rate has dropped sharply. Clearly, it is at an extremely low level, however, there are not yet signs of a significant deterioration. The rate of employment growth is now slowing, although this is as much to do with the lack of labour supply than a slowing demand for workers.


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Posted By Will Dickson

Chief Investment Officer Will Dickson is a Chartered Wealth Manager as part of the Chartered Institute of Securities and Investment (CISI) qualification scheme. This recognition was obtained following an MSc in Finance and Investment from the University of Exeter, and an Accounting and Finance BSc from the University of Bath. Will’s exceptional talent is recognised by CityWire’s Wealth Manager, having been named as one of the UK’s Top 30 investment managers under the age of thirty for the last three years. Will manages and oversees P1’s range of investment portfolios. Working with the Investment Team, Will shapes the investment policy and fund selection for our Passive, Hybrid and Ethical and Sustainable portfolios. In conjunction with managing the fund portfolios, he oversees and our AIM Inheritance Tax and Tier 1 Investment Visa equity portfolios. Will has joint written articles with P1’s Head of Research, Dr Rayer. Their article “Hypothesis: Risk, like Mass and Energy, can neither be created nor destroyed” featured in the CISI’s The Review of Financial Markets. In addition to contributing to articles with Dr Rayer, Will often delivers P1 CISI Endorsed lectures to Independent Financial Advisers. You can see Will’s take on weekly investment news here.