Noise is temporary, diamonds are forever

02 December 2019

The Noise

  • Aside from a few angry replies from the Chinese Foreign Ministry, China has responded fairly calmly to President Trump’s signing of the US Bill backing Hong Kong protestors, even indicating that it will tighten intellectual property rules to boost the chance of a trade deal.
  • Deutsche Bank’s vast restructuring programme continued apace this week with the offloading of $50bn in unwanted assets to Goldman Sachs. While some of the company’s woes can be put down to management, its financial weakness shows just how painful the ECB’s policy of negative rates has been for the banking system.
  • France’s richest man, the chairman of luxury goods conglomerate LVMH, moved to acquire iconic US jewellery brand Tiffany & Co this week, a sign that some companies are still willing to look through political and economic noise and look for ways to invest in long term profitability.

The Numbers


The Nuance

Positive sentiment has been growing in equity markets, both in the UK as investors increasingly expect to see Boris Johnson secure a majority in the December General Election, and internationally with the hopes of reaching a trade deal between the US and China. Underpinning all of this is a supportive monetary policy framework, accelerating growth and easing investor fears of a recession.

As always, our style is to keep a level head while market emotions ebb and flow. Continued (albeit modest) economic growth and low interest rates provide companies a perfectly acceptable backdrop in which to do their jobs and generate profits for shareholders. Trade deals between the world’s two economic super powers may well be a way off, but as we saw with the LVMH deal with Tiffany & Co, companies are proving to be more dynamic.

Quote of the week

"I've heard from reliable sources that it's not doctored." Donald Trump Jr on Twitter

At time of writing, the world still has no explanation for the fact that President Trump tweeted a picture of himself superimposed onto Rocky Balboa’s topless body this week. The image was posted without a caption or subsequent clarification, setting the internet ablaze with confusion, speculation and of course – memes. Even Donald Trump Jr weighed in on the debate, memorably tweeting the above.

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