on 29-11-2016 06:20 PM
What signals and market indicators are AMP Capital's Dynamic Markets team looking at this month? See a summary of our market views below:
All in all, the inverse of the search for yield has been the starvation of the capital stock. As capital markets begin to divert capital from yield-based strategies to rewarding more cyclical companies a lift in capital investment is likely in coming quarters.
The irony is that even as fear trumped hope in the US Presidential election, the aversion cycle (which has led to significant rise in the profits share of national income at the expense of labour share) was giving way to cautious optimism. Capital expenditure was on the mend, revenue expectations were on the rise, and the labour share of GDP was making the badly needed recovery.
The relative outperformance of cyclically sensitive sectors and the rise in inflation expectations have been consistent with the shifting macro dynamics.