Economic and Strategy Viewpoint - May 2019

03.05.2019 14:01 - Schroder Investment Management (Switzerland) AG (LUX & CH)

Economic and Strategy Viewpoint - May 2019

This month we consider the prospect of a "melt-up" in markets, as well as stockpiling in the UK and the economic difficulties facing Turkey and Argentina.

Are stock markets heading for a melt-up?

- With equity markets strengthening and the Federal Reserve on hold there is talk of a surge, or melt-up in markets. Signs of economic recovery, low inflation and easier central bank policy in Europe and Asia reinforce the Goldilocks narrative.

- Macro headwinds such as excess inventory, higher oil prices and a potential squeeze on profit margins threaten to check equity markets. These risks may materialise, but the lesson from history is that a melt-up can happen precisely because it is driven by sentiment rather than macro.

Read the full report here:

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