Jupiter

Amid all the news of Covid-19 second waves, particularly across Europe, investment markets remain relatively calm despite predictions of shrinking global economic growth.

“I’ll highlight one area to start off with, and that’s biodiversity, it’s a very difficult subject for capital markets to understand; how do we value our biodiversity? It’s incredibly important, we all know that from a planetary perspective, but how do we value it? And how do we think of it from an investment perspective?” Jupiter’s Head of Sustainable Solutions, Charlie Thomas, talks about being a veteran in the sustainable investing space as it grows more popular, discusses what’s important to him when he makes investment decisions, and gives us his insight in to what he thinks will be the trends of the future.

Covid continues to make waves and the news remains dominated by it. Economic recovery depends on the ability, the propensity and the inclination of people to return to work and resume normal patterns of consumption. Underpinning all is that word ‘confidence’.

Clean energy and other sustainable solutions will be key to a reinvigorated post-COVID economy. This time, unlike after the Global Financial Crisis, politicians show little sign of backtracking on sustainability, believes Charlie Thomas.

Ariel Bezalel and Harry Richards explain why deflationary forces still hold sway in the global economy and where they’re finding opportunities in the Jupiter Strategic Bond Fund.

With the prevalence of Covid-19 and its rapid and significant disruption to the global economy, not surprisingly the tectonic plates on which central banks sit are gradually shifting as countries deploy their own different strategies to deal with the fall-out. This week, the Bank of England and the US Federal Reserve (Fed) held their respective September meetings, and both warmed to themes aired publicly at the recent Jackson Hole policy symposium and before that.

The one fifth decline in UK GDP in the second quarter could, without any fear of exaggeration or hyperbole, be described literally as ‘unprecedented’. Now confirming what we have been seeing for several weeks in improving unofficial high frequency data (credit card usage, retail footfalls, traffic congestion, passenger movements, electricity consumption etc), UK GDP saw a recovery of 6.6% in July.

Are governments and central banks trying to cure a debt problem with more debt? As policy intervention drives markets higher at the same time as economic data nosedives, Ariel Bezalel and Harry Richards discuss where they are finding opportunities and avoiding pitfalls in today’s bond markets.

Technology stocks largely led the market before the coronavirus pandemic took hold and while the virus has turned much of the world on its head, technology stocks continue to power on. With many workers at home for the foreseeable future and friends and family socialising from a distance, will the technology sector continue to dominate? Jupiter’s investment team discuss this question and explore the regions, sub-sectors, and stocks to watch.

The Covid-19 virus continues to whistle its way through developing markets at lightning speed, as well as more than thirty of the mainly southern and south-western states in the US seeing an upsurge (daily new cases in the US have reached 63,000; in context that is 13,000 more per day than a week ago). When Coronavirus first broke out, there was a widely held belief that, like the flu virus, Covid-19 might be naturally suppressed by heat and sunlight (a contributing factor to flu outbreaks being rare in summertime). The fact that Covid-19 is now going through hot regions, both temperate and arid, like a dose of salts, either debunks the thesis, or at least demonstrates that other more powerful epidemiological forces are at work.

In this edition of Active Minds, James Clunie discusses the two themes that seem to be driving markets today: companies well positioned to endure lockdowns, and those with most to gain from lockdowns easing. Interestingly, both kinds of stock are outperforming. Meanwhile, Matthew Pigott looks at Brazil’s experience with Covid-19, and why its market could go from euphoria to hysteria and back again. Lastly, Mitesh Patel talks about the Japanese market and how investors’ narrow focus is creating valuation opportunities elsewhere.

This week has been one of targeted fiscal heavy lifting, particularly in the European Union. One of the ironies of the current impasse between the EU and the UK in concluding a free trade agreement is the EU’s insistence that its strict rules on state aid provision must be adhered to by the UK so as not to give British companies a competitive advantage (or, more accurately, not to put EU companies at a disadvantage). Announced a while ago, Italy’s flag-carrying airline Alitalia has already been bailed out, as has KLM-Air France by both the Dutch and French governments.

Harry Richards, Fund Manager, explains why investment grade offers abundant opportunities in a credit picker’s market.

In this edition of Active Minds, Matthew Morgan looks at the tug of war between aggressive policy action and optimistic sentiment, and the prevailing uncertain risks of the pandemic’s continued economic and societal impact. Elsewhere, Alastair Gunn looks at the factors underpinning equity markets and whether M&A can make a comeback, Avinash Vazirani looks at India’s experience navigating the Covid-19 crisis so far, while George Fox looks at Japan’s role as a source of income in these tough markets.

Ariel Bezalel, Head of Strategy, and Harry Richards, Fund Manager, Fixed Income, explain where they have been snapping up credit opportunities, while remaining alert to the risks often concealed in bear market rallies.