In market terminology a ‘Whale’ is a big fish that dominates markets for a while. Initially nobody knows who they are or exactly what they are doing, but instead observes the unusual behaviour of certain markets.

Global Equity Markets continued to squeeze higher in August, particularly in Tech space as momentum and quality strategies continued to run heavily while Value continued to take a hit – albeit bouncing towards the end of the month.

The S&P continues to grind higher, while the Shanghai Composite remains supported on its short term indicators, up 20% over the last three months. The offshore Yuan (CNY) is at its lowest (strongest) level against the US$ since March, while the trade weighted $ continues to drift steadily lower – reinforcing our view that there may be a deliberate devaluation policy coming.

In Market Thinking for July, we noted that, after one of the best ever quarterly performances for US equities, we thought that the choppy trading at the end of June signaled a changing of ownership from leveraged speculative traders to asset allocators.

As we head into an atypical summer, some issues like Italian debt have been postponed (again), while others, such as regulation of hedge funds and asset managers are starting to re-emerge – as are some longer terms trends like a weaker dollar.