News

The US inflation result was good news this week. Investors are acutely aware that the colossal amounts of government stimulus financed by money printing are eventually going to spill over into inflation. When this happens, central banks will find themselves in the difficult position of choosing when to act, in the knowledge that any indication of a decision to slow down monetary support will throw economies into recession.

Commodity prices are soaring, some having increased to levels last seen almost a decade ago. The boom has prompted some observers to argue that the current cycle is now reaching its peak, especially against the backdrop of a still uncertain global economy following the outbreak of the COVID-19 pandemic. Should investors be concerned? Is it perhaps time to sell out and run for the hills?

Rising government bond yields have dominated market noise this week with the yield on 10-year US Treasuries (US Government bonds) rising to its highest level in over a year. Equity indices wobbled in
response to these dynamics with fears that rising borrowing costs could derail the already fragile economic recovery.

Gone are the days when we could see our enemy coming and protect ourselves using military might. Today, the weapons threatening our national security are largely invisible and can be unleashed from any corner of the globe. Hostile actors can use our own data, influence and public perception against us in an increasingly alarming manner.

When share prices plummet as they did in the first quarter of last year, it’s not always easy to make a convincing case for continuing to hold a good-quality, but hard-hit company – especially one in the beleaguered hospitality sector. A year ago, we not only held on to but strengthened our position in Intercontinental Hotels Group (IHG).

The US Federal Reserve sharply upgraded their growth expectations for the US economy in 2021 from 4.2% to 6.5% despite cautioning that a full recovery from the impact of the pandemic was distant and would require ultra-easy monetary policy.

After rising to their highest point since record lows in 2020 last week, the upward momentum in US
treasury yields paused. Despite this pause, Jerome Powell stated that Federal Reserve officials have been
monitoring the rise in yields since January but rejected claims that it warranted concerns.

We are thrilled to announce that the Sanlam Real Assets UCITS Fund has received “Best Specialist Real Assets Fund” at the Investment Week Specialist Investment Awards 2020.

It has been a strong week for equities as further dovishness from the Federal Reserve helped bolster market sentiment. Investors were relatively unfazed by Fed Chairman Jerome Powell’s further reminders that the pandemic is far from over, or by surprisingly high applications for US state unemployment insurance.

The Pfizer/BioNTech vaccine began its rollout this week to vulnerable over-80’s and health & care staff cohorts. This week marked the first distribution of over 800,000 doses expected to be delivered in the coming weeks and the four million expected by the end of the month.