Fiscal stimulus mantra spreads
Governments of developed countries are facing growing calls to step up spending as their central banks run out of options for stoking growth. The problem, says Francis Scotland, director of global macro research at Brandywine Global, is that the world’s two biggest spenders—the U.S. and China—are already “tapped out.”
UBP: “We are still expecting earnings growth in Switzerland”
Despite the recent downgrading of Swiss stocks, low interest rates, and a slight uptick in the Swiss franc, Eleanor Taylor Jolidon, co-head of Swiss and global equity at UBP, sees opportunity for investors who turn to Switzerland. “Companies manage to adapt regardless of the strong Swiss franc,” she says. In her view, there’s a lot of potential upside for the remainder of the year.
SNB sends positive signal to banks
The SNB left its main policy rate unchanged but eased the burden on banks after tweaking the threshold at which they pay negative rates on money stored with the central bank. Thomas Heller, CIO at Schwyzer Kantonalbank, explains why this is good news for banks. He does not expect the SNB to cut rates at its next meeting.
The Fed will have to go back to QE, says Julius Baer
Alarm arose inside the U.S. financial system this week after a spike in demand for short-term liquidity led the Federal Reserve to intervene in the repo market. The cash crunch can’t compare to the one that aggravated the financial crisis in 2008, says Tony Campione, investment advisor at Julius Baer in Geneva. But he sees a clear need for the Fed to reassure markets, possibly with a fresh round of quantitative easing.
ECB could delve into negative-yielding corporate bonds, says M&G
Since the last quantitative easing round, regulations blocking the ECB from buying negative-yielding corporate bonds has been lifted, paving the way for the central bank to do so as part of its newly announced 12 BN euro bond purchasing program, says M&G Investment’s Wolfgang Bauer.
A Swiss economic rebound in 2020? Not so fast, says Lombard Odier
While the Swiss government slashed its 2019 growth forecast on Tuesday to 0.8 percent, down from 1.2 percent in June, it is still expecting gross domestic product to expand 1.7 percent next year. That sounds optimistic, according to Johan Utterman, head of Swiss equities at Lombard Odier IM. He says the economy may struggle to rebound next year without government support or a favorable end to the U.S.-China trade war.
Numbrs: “The world doesn’t need another bank”
Zurich-based Numbrs is the latest Swiss start-up to join the unicorn club. Fynn Kreuz, managing partner of the fintech company, talks about expansion plans and why the Swiss firm does not yet offer services in Switzerland.