Albert Edwards: investors are facing the four horsemen of the apocalypse

published 19 October 2018

918_MW_P16_Strategy_Col — Luigi Di Maio: Italy's deputy prime minister

Edwards has long been a bond bull he expects prices to keep rising and yields to keep falling, with the US eventually going the way of Japan, with long-term bond yields near 0%. So he was "most surprised" that the ten-year Treasury yield "managed to smash through its multi-decade downtrend" in recent weeks, helped by expectations of further interest-rate hikes from an increasingly aggressive-sounding Federal Reserve. Yet while the push above the 3.05% mark was a "highly significant technical breach", Edwards is sticking with his view that ten-year yields will fall into negative territory during the next recession. Don't be surprised, he says, if the current Treasury sell-off "loses energy".

Edwards also notes that hostility towards the European Union (EU) from within Italy is set to grow. Unlike the UK, where young people are more positive about the EU than older people, in Italy, the under-45s are more likely to vote to leave. "Time is one thing the pro-EU establishment does not have on its side in Italy."

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John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.