Investment Newsletter - October 2018

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Investment Newsletter October 2018

Night of the Living Debt Halloween is a time for spooky goings-on. The financial markets are also pretty jumpy at the moment, wary of horrors that may lie beneath.

American Horror Story?

Neal Foundly Investment Analyst

Equilibrium Investment Management

As we have highlighted recently, the US economy is booming. Growth is strong with low unemployment and high corporate profitability (much of this profit growth is due to President Trump’s large-scale tax changes introduced at the end of 2017). That’s fine, but ordinarily at this point in the economic cycle when growth is self-sustaining and many of the productive resources are at capacity, there is no need for further stimulus. To prevent the economy from overheating, the US central bank, the Federal Reserve, is raising interest

rates. This draws money out of the economy and reduces the capacity for greater lending to fund growth. The problem here is that you have two opposing forces which can cause major issues for the economy. It’s like driving a car with one foot on the accelerator and one foot on the brake – at some point, something’s going to go bang.

Zombieland The emergence of the zombie in contemporary culture is thought to have started with George A. Romero’s cult film “Night of the Living Dead” which this month celebrated its 50th anniversary. Featuring a nightmare story about the dead coming alive to terrorise the living, the film made $30m at the box office but only cost $114,000 to make.

Equilibrium Asset Management LLP (OC316532) and Equilibrium Investment Management LLP (OC390700) are authorised and regulated by the Financial Conduct Authority and are entered on the financial services register under references 452261 and 776977 respectively. Registered Offices: Brooke Court, Lower Meadow Road, Handforth Dean, Wilmslow, Cheshire SK9 3ND. Both companies are registered in England and Wales.


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