News this past week
- Fed minutes boost markets
- US Core CPI rises 0.2% month-on-month
- Mario Draghi hints at more stimulus
- Bank of Japan decides against QE expansion
- Metals under pressure
James Klempster, CFA shares his view:
We are at an interesting juncture where developed markets’ monetary policy is no longer created equal. In the developed markets, the US is in the best shape economically, but the market is expensive. On the flipside both Japan and Europe face economic headwinds, with the former’s arguably more structural and the latter’s more cyclical. Nevertheless, these economies have stock markets with more compelling valuations and this, combined with the prospect of further monetary stimulus, leads us to believe that both Europe and Japan should outperform the US in local currency terms. The UK sits somewhere in the middle, with a decent economic prognosis, combined with attractively valued stocks.