Our colleagues in Wellesley Investments & Pensions have published a White Paper today on stockmarket activities and bond market falls in global markets.
Following a very strong start to the year and a strong 18 months of stockmarket and bond market gains, June has seen sharp falls in global markets particularly in bond markets.
Managing Director of Wellesley, Denis Moloney says, “Markets have been quite volatile since the end of May with significant weakness across all major asset classes. Unusually, there has been a high level of correlation across asset classes with bonds, equities, commodities and real estate assets all falling. There appears to have been three main factors driving the deterioration in investor sentiment with the announcement by the US Federal Reserve that they were looking at “tapering” back their quantitative easing programme the initial catalyst for the weakness in asset prices.”
Weaker economic data from China has also contributed to the declines, while investor profit taking following a strong year in most markets has also had a significant role to play. Wellesley has been assessing developments closely over the last three weeks and the following White Paper outlines their thinking on the factors driving markets in recent weeks and their current ideas about portfolio strategy at this point in time.