Economic surprise accelerating
Positive economic surprise still offering short-term support for risk assets
The positive economic surprise data seen over the last 3m continues to strengthen. If anything, the data is moving faster than any monetary tightening leading to a benign environment for risk assets such as equities. What is more of a conundrum is the lack of response in global bond yields, even as the final developed market central bank to move, the Bank of Japan, is now hinting that it is past peak monetary accommodation. Earnings forecasts for 2017 remain robust with median growth close to 10% for developed markets and a similar level of growth forecast for 2018.
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Edison clients win at the Investment Week Investment Company of the Year Awards
Special recognition for Foreign & Colonial IT on 150th anniversary
Investment company research clients of Edison picked up several of the honours at the Investment Week Investment Company of the Year Awards last night in London.
Sonos – Sounds of sameness pt. III.
Sonos has finally enabled Alexa voice control and Spotify support in its speaker systems thereby ensuring that it will now be competing purely on the quality of its hardware. The Sonos One is Sonos’ first voice-activated speaker which has received rave reviews for its sound quality, but very little else. This is because this device uses Amazon’s Alexa to control its functions and is adding support for streaming services like Spotify and Tidal with increasing regularity. While this is exactly what is required to sell speakers in this day and age, it is confirmation that Sonos has completely lost its mojo.
Ludicrous growth of the EV
Hit the ‘ludicrous mode’ setting on the Tesla model S P100D and you feel yourself being propelled from standstill to 60mph in a paltry 2.5 seconds – over 30% slower than Musk’s latest revelation, the Tesla Roadster. The Tesla Roadster boasts a range of over 600miles on a single charge, a top speed of 250mph in addition to neck straining acceleration.
Read more...Valuations: An important part of the puzzle
Price/book multiples highlight worrying trend in risk appetite
In this cycle valuations have been, so far, the dog that did not bark. Globally, the median sector price/book multiple has risen from the trough of 2008 to a new peak. Such an expansion in market valuations is similar to that seen in the 1980-1987 period. Between 2012 and today we have come full circle in terms of tactical asset allocation. Earlier, we could not understand why investors were so uninterested in adding risk to portfolios despite such high expected returns in equities. Now, equity valuations suggest only modest long-term returns are on offer and there is greater prospect of short-term disappointment. It is however proving equally difficult to attract investors’ interest in this signal for caution. Perhaps the metaphorical - and silent - valuation dog knows the psychology of the current marginal investor rather too well.
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