Why investors should remain optimistic on US despite political upheaval

Opportunities in US banks

Steven Andrew, macro fund manager at M&G

Steven Andrew, macro fund manager at M&G

The 241st year of the United States will go down as an especially eventful one. Aside from the unrefined noise of political upheaval, more subtle - and probably more consequential - shifts took place in financial markets.

This time last year, beliefs about future growth prospects hit rock-bottom.  Alluringly alliterative warnings that secular stagnation would keep everything lower for longer seemed finally to have become entrenched in economic beliefs and, consequently, in risk pricing evident in ludicrously low sovereign bond yields.  The widespread expectation that this situation would persist has been quietly, but effectively, contradicted by the behaviour of asset markets over the past twelve months.  The contrast between the (10% or so) losses suffered on ‘risk free' US Treasuries and strong (40%+...

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