What signpost should global equities investors be looking for right now?
Nudgem Richyal, co-manager of Pendal Global Select Fund: It goes back to the need to see a shift in Fed policy. Once we see a clear change in language, that the Fed is no longer worried about the politics and inflation, at that point, it will be safe to go back in.
The challenge is, markets are discounting mechanisms.
The market may anticipate any such shift in the Fed before it’s actually articulated. That’s always the $64 million question.
So that’s what we’re looking for. What we’re expecting is the market will discount a change in Fed policy, and so we’ve got to anticipate that.
One of the ways to do that would be to see if the inflation data itself peaks. That hasn’t happened. It was expected to happen last week, but it didn’t.
Chair Jerome Powell isn’t talking down interest rate rises at the moment.
But at some point the market will anticipate he will shift.
Nudgem Richyal co-manages Pendal Global Select Fund with Chris Lees. The pair have been working together in global equities investing for more than 20 years.
Nudgem has 22 years of industry experience, joining J O Hambro Capital Management (a wholly owned subsidiary of Pendal Group) with Chris in 2008. He was previously an investment director with the Global Equity Group of Baring Asset Management, where he worked closely with Chris since 2001.
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