Knowledge and insight

Investing in the next generation

It’s been 10 years since the defining moment of the global financial crisis — when Lehman Brothers filed for bankruptcy and employees piled out of its headquarters on Wall Street with their personal belongings. Following a swift response and extraordinary measures from policymakers, the US economy pulled out of The Great Recession in June 2009 — and it hasn’t looked back since.

For answers about the global stock market dip of the past couple of weeks, we think you need to look at the bond market. That, mixed with some jumpy robots, is most likely the cause, we believe.

The basic model for charting the adoption of new technologies was first used to track farmers’ purchases of hybrid seed corn. Today novel ideas might rise, fall and die in considerably less time than it takes to cultivate a single harvest. Just how fast has the innovation cycle become?

US Treasury yields soared last Wednesday in a truly astonishing 12-basis-point one-day jump. The move was triggered by ADP employment figures that smashed expectations and was given extra fuel by US Federal Reserve Chair Jay Powell saying rates were still a way off “neutral”.

In this issue, we mark 10 years since a pivotal moment of the financial crisis, when employees at Lehman Brothers gathered their belongings and filed out onto Wall Street. In today’s climate, with the UK in the midst of Brexit negotiations and escalating trade tensions between China and America, it is easy to feel apprehensive about the future.

It’s low-heat rebellion time at the Conservative Party Conference.

Prime Minister Theresa May is getting attacked from both sides in Birmingham. Former Cabinet minister Boris Johnson and the moderately popular pastor of the political wilderness Jacob Rees-Mogg have both lambasted Mrs May’s Brexit negotiations and strategy. Remainers in her party are angling for a second referendum, with another former Cabinet minister, Dominic Grieve, warning that a “significant number” of backbenchers now support the idea. He even suggested a cross-party bloc could force the issue.

It’s one of the longest bull runs ever, but that doesn’t mean it will be cancelled any time soon. 

Emerging markets recovered sharply last week after a hefty rate hike by the Turkish central bank and a more modest – but still applauded – one by the Russian monetary authority.