Brian Singer, head of William Blair’s Dynamic Allocation Strategies team, discusses two key macro themes that are pushing asset prices away from and towards fundamental values. Watch the video or read the recap below.
There are a number of macro developments out there that are actually themes that are pushing asset prices, whether they’re stocks or bonds and currencies, away from and toward fundamental values. There are two very important ones for us right now.
One is populism. Populism is an important theme because a populous stands for nothing. A populous stands against something, and it’s very hard for the markets to incorporate a rejection, a rejection that occurs in the political sphere. But, that influences asset prices, and because of that, we actually build that into our understanding of elections, things like the Brexit vote. It’s very important for us.
The second macro theme is central bank activities. Central banks have been manipulating interest rates for several years now. That means they’re manipulating asset prices. As the Federal Reserve begins now to raise interest rates, and presumably the ECB and the Bank of Japan will follow, we will enter a period where they’re trying to move out of that influence, and that’s going to cause asset prices and importantly, currencies, exchange rates, to move all around the world, creating opportunities for macro investors.