Global Markets dancing to central banks monetary policy tune, says Barings 

Disappointing growth in the US has benefitted equity prices - as such,

• Barings believes that global markets have currently become policy addictsBarings remains convinced that unless the disappointing US growth seen in Q1 extends into Q2, the Fed will be acting in September
• Barings continues to prefer equities with a bias towards Japan and Europe. In Japan, the firm believes that corporate profitability is healthy and spreading beyond export-led companies

Baring Asset Management (Barings) believes that disappointing growth in the US has strangely benefitted equity prices and that expectations of an early interest rate rise by the US Federal Reserve have abated. As a consequence, Barings believes that global markets have become policy addicts and monetary policy rather than economic conditions is currently driving markets. This is evident in not just developed markets but also in economies further east, including China.

Notwithstanding, Barings remains convinced that unless the disappointing US growth seen in the first quarter extends into the second, the Federal Reserve will act in September.

In Japan, Barings believes that corporate profitability remains healthy and is spreading beyond export-led companies. In the Eurozone, stronger lending growth is on the horizon after better expansion of the monetary aggregates. While there has been mixed economic data in both regions, Barings sees real progress and expects both economies to be important contributors to global growth going forward.

Marino Valensise, Head of Barings’ Multi Asset Group at Baring Asset Management, said: “The latest economic data releases have not been particularly exciting. We believe that this is simply a seasonal soft patch in line with the experience of prior years and have not changed our longer term projections for better growth later in the year. 

“In the post-financial crisis years, central banks have done ‘whatever it takes’ to curtail market volatility, facilitate access to credit and engage in various types of financial repression, squeezing savers at the expense of borrowers through low interest rates. Economic conditions may improve to a point where those policies will have to be discontinued, or even reversed. Once this happens, there is a risk that what has been repressed will come out with a vengeance. Having constrained the cat inside the bag for so long, once the cat gets out there’s no telling what damage it might do.”

In Barings’ view, an improvement in US employment to potentially inflationary levels will drive policy action; however, two other aspects might influence in the decision to raise rates. 

Marino Valensise comments: “First, there is the desire to re-build interest rates so that they may once again be cut when needed; this will give the Fed a critical policy lever in any future downturn. Second, there is the need to discipline credit markets, avoid excessive leverage and stop the misallocation of capital. Federal Reserve Chair Janet Yellen made remarks in early May which resemble the ‘irrational exuberance’ speech by former Federal Reserve Chair Alan Greenspan in 1996. Managing the exit of the cat from the bag will be Yellen’s most important test while in office.”

Barings has noted that on the equity side, emerging markets have underperformed developed markets for a long time now and believes that once the US interest rate rise is fully priced in, investors could see the end of that under-performance.

Marino Valensise continues: “We see a number of factors which seem to suggest an inflection point: light positioning in global portfolios; commodity giants in Russia and Brazil which have been hit hard; China stocks skyrocketing courtesy of monetary policy; and Asia being a major beneficiary of the oil price fall. A strong US dollar and potential policy tightening from the Fed do not bode well for the immediate future performance of emerging markets; however, a turning point might occur as soon as the first rate rise is out of the way and higher interest rates and a strong US dollar get fully priced in the markets. That could be the moment of change.” 

Barings’ investment stance remains unchanged, with a preference for equities and a bias towards Japan and Europe. From a sector prospective, it has upgraded financials to ‘preferred’ as conditions are getting more favourable for both US and European banks.

Marino Valensise concludes: “We have downgraded consumer staples to not preferred, recognising the demanding valuations. Consumer discretionary has also been downgraded to neutral, as we felt that many of the potential benefits from the lower oil price were already priced into equities. On currencies, we have upgraded the Japanese Yen to neutral versus the US dollar.”

Upmysport receives 1m in funding backed by Angel CoFund

Founded in early 2013 with a vision to be home to the best instructors in Europe, upmysport is designed to meet the need for a simple, digitally-based service for arranging sessions with reliable instructors in a chosen activity. The service allows you to browse through and book into private sessions or courses, updating your phone diary and taking payment in just one click. Users can also create a shortlist of their favourite instructors for easy future booking. For instructors, the app serves as a full relationship management and marketing tool.

The tech startup is based in Tech City in East London and in Chamonix, France. Today's investment round funding is the second raised by upmysport, who previously raised £150k under SEIS. Investors include business leaders and successful entrepreneurs from across Europe, all of whom share upmysport's passion to fill the consumer technology gap in the instructor-led activity market and therefore help more people enjoy being active.

Lead angel investor Christian Lorenzen has been appointed to the board as Chairman, and is joined by fellow angel investor Ulrich Huber. Christian, former managing partner of Langholm Capital, has deep expertise in growing consumer brand businesses and is a keen skier, cyclist and sailor.

This latest funding will go towards further development of upmysport's online and mobile offerings, and to support the development of strategic partnership opportunities. The startup has remained London-centric to date, and is now expanding its reach. In its latest partnership, the Dame Kelly Holmes Trust joins upmysport as a UK charity partner, giving the startup the opportunity to support underprivileged young people with their own active aims.          

Nicola Broom, CEO and co-founder at upmysport commented: "The latest round of investment is incredibly exciting. With the market for instructor-led activity gaining ever more focus and growth, the investment puts us in a great position to turn our vision into a reality. The experience that the investors, such as the Angel CoFund, bring to the table is going to be invaluable as we look towards the best path to scale up."

Tim Mills, investment director of Angel CoFund commented: "London has become an incredible breeding ground for tech startups but is also home to many people who are keen to learn new sports, build fitness or simply hone their talents. upmysport is  focussed on helping consumers navigate the challenging process of finding the right coaching and tuition, making it effortless to locate, evaluate and hire professionals to suit their needs. Their platform fits a real need in the market - both in terms of digitizing the instructor-led activity market, but also in terms of enabling people to get more involved in sport and achieve the active lifestyle they want on the go."

Christian Lorenzen, lead angel investor and Chairman of upmysport commented: "I am delighted to invest in upmysport and join the board as Chairman. This is a classic case of a tech startup tackling a real problem in a growing market, and one I share the team's passion to solve. I first met the founders when discussing my own frustrations as a user of instructors, and I am confident we are well placed to tackle the problem with the high quality team and value adding investor group we now have."

Experts Claim Number of Virtual Offices will Grow in Future, W1 Office Responds

A spokesperson from W1 Office provides a statement.

A leading communications expert predicts that virtual offices will continue to grow in popularity, thanks to the advancement of technology that makes the solution much more accessible to people up and down the country. Tim Meredith, from Daisy Group, says that as cloud-based services and mobile devices develop, there is no longer a need to sit at a permanent desk.

This technology will cause the UK's office property sector, worth approximately £2billion a year to the economy, to dramatically change over the coming decades. "The business world has become extremely fast paced, and organisations need to be able to react quickly to survive," claimed Mr Meredith.

"Office space, on the other hand, requires long-term financial commitment and maximum occupancy, otherwise it becomes a huge financial strain. The nine to give shift is dying as more businesses allow their employees to work flexibly, which means workers no longer need to be desk bound, and there is less need for fixed office space."

The dawn on superfast broadband and the mass availability of affordable tools, such as video conferencing software, internal social networks and more, have allowed businesses build a virtual team from all over the country. These teams can still collaborate with colleagues, but not having to travel into an office every day makes their working day much more flexible.

"The number of UK home workers has increased by 45 per cent since the start of the millennium, and I anticipate this trend to continue," he added. "By 2035, businesses will be following the lead of freelancers and start-ups by renting fully equipped office space or portable workstations as and when they need them."

W1 Office, a company that provides virtual office solutions to businesses up and down the country, takes a keen interest in reports such as this. A spokesperson provided this statement: "It's no secret that virtual offices are increasing in popularity, and that's because of how cost effective and convenient they can be. 

"If you're a business that is looking to cut costs but still maintain productivity then a virtual office could be just the answer. The flexibility of working from home can give you and your company a cost effective solution to set you up for the future."

W1 Office endeavours to provide affordable virtual office solutions to businesses, start-ups and homeworkers across the globe. Their virtual office services allow individuals and companies to use business credentials in London, enabling their organisations to grow.