San Francisco finance conference

I recently had the privilege of attending a financial conference in San Francisco organised by one of our clients, for whom we provide market research. I regularly visit Frankfurt for this company, and was invited to Hong Kong last year, which was a truly memorable visit, but as this was my first time in San Francisco I was particularly excited about the trip.

What’s more, October is traditionally the best time of year to visit San Francisco, as the ocean fog that reduces temperatures during the summer is replaced by clear, sunny days. Well, that’s the theory anyway. After a long flight via Paris we approached SF only to find it overcast and dull. Actually, it was bright and sunny, but the 17 devastating fires raging across the Bay Area and winegrowing region surrounding it were clouding out the sun with smoke.

San Francisco has a long history of fires and earthquakes, but this beautiful city on the bay has always bounced back strongly, and so it will again after the fires, which have raged for about a week now, are finally mastered. The death toll will by then have risen past 40, hundreds of thousands of acres of land will have been consumed by fire and over 5,000 homes – entire suburbs – will have disappeared. But the Americans are a stalwart people and they will rebuild their lives.

Macro-economic trends to look out for
Allianz Global Investors make it their business to stay on top of the markets and the micro business trends and macro/geopolitical ones that affect them. The seminar featured top-level economists and market analysts providing us with first-hand insight into the near term economic trends, and while these were mostly focused on the USA and the international situation, there is information to be gleaned for Marbella as well.

Essentially, global economic growth is slowly accelerating, wage growth is as yet lagging behind job creation, and inflation is starting to edge up past the two per cent benchmark. The expectation is that the overall picture will prompt the Federal Reserve to raise interest rates and move from ‘crisis-control’ monetary policy to fiscal measures, the latter being the burning platform of President Trump.

It seems, then, that we are slowly exiting the era of ‘easy money’ and that the market rallies that have seen company stocks become somewhat inflated will need to be addressed with a gentle adjustment. The focus will from here on out increasingly have to be on intrinsic growth and company results, but the expectation is that 2018 will continue the trend of growth we have seen recently.

It’s a short, simplified summary of a much larger topic, but suffice it to say that the conference was very interesting, our clients were gracious hosts and I had the opportunity to explore the city. By the end of the week the weather had begun to clear and the fire fighters had begun to win the war against the flames, so it was with a real sense of fondness that I left my now favourite city in the US.

-Michel Cruz-