Market Update

News this past week:

  • Macron becomes youngest ever elected French President
  • Strong April jobs report points to robust US labour market
  • Eurozone economy grows 0.5% in first quarter
  • Greece agrees bailout terms with creditors
  • Volatile week for commodity prices

Macron

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Global Market Viewpoint Q1 2017

As UK Prime Minister Theresa May calls for an early general election to expedite the Brexit process, Glyn Owen, Investment Director of Momentum Global Investment Management, one of our UK regulated, discretionary investment managers shares his view of the markets and reviews first quarter of 2017.

PortfolioMetrix Market Update: Asset Allocation – Eyes Forward

News-wise it was an eventful month with the UK formally triggering Article 50 to begin the process of leaving the EU, the withdrawal of Trump’s healthcare bill, the US Fed raising rates by 0.25% and the Netherland’s avoiding the election of far-right candidate Geert Wilders.

PortfolioMetrix have just completed a formal asset allocation review for all portfolios, the results of which have just been implemented in their latest rebalance. How they decide on this asset allocation is reasonably technical, which they have already covered (the perhaps infamous ‘Black Litterman’ discussion), but they did want to highlight one key element of the process: PortfolioMetrix asset allocations are forward-looking, not backward-looking. Learn more

Expectation Not Hope – Investing Shouldn’t Be a Gamble

diInvestment and gambling are often conflated but the reality is that investment and the mindset required to undertake investment is wholly different from that of a gambler.

While investing may be risky in a manner akin to gambling, the major difference is the motive behind the behaviour.

James Klempster (CFA) of Momentum Global Investment Management, one of our UK regulated, discretionary fund managers, shares his view. Click here to view.

One week until Article 50

BrexitIts just a week until Britain is expected to trigger Article 50, sterling is at a three week high, UK inflation is at its highest since 2013, leaked EU documents suggest Britain could be kicked out EU and fined £50bn.  Add to this that the Bank of England (BoE) Chief Economist Andy Haldane is postulating a base rate rise to 4.25% that could wipe out 1.5 million jobs but boost productivity in the long run.  Scotland is pushing harder for another independence vote, and the BoE predicting a further retail slowdown: all in all perhaps enough commotion to burrow yesterday’s embarrassing infighting of the Labour Party. Or perhaps not.  It seems that it doesn’t matter how old a nation’s democracy, advanced its economy or established its laws; political risk teeters when the populous lambast inequality and the public coffers are constrained by their own indebtedness.

Following Labour’s commotion yesterday, with Labour deputy leader Tom Watson clashing with shadow chancellor John McDonnell and an embarrassing parliament session feud, Jeremy Corbyn’s video address seemed a phony attempt to reassure members that the embarrassment only goes to prove that ‘spirits in the Labour party can run high’. Mercifully, attention is focused less on Labours potential disconnect and more on the impending Brexit annulment.

Prime Minister Theresa May’s ‘no deal for Britain is better than a bad deal’ is being threatened by the EU’s leaked plans for a prolonged legal battle, seeking £50bn of apparent dues, should the UK leave the EU with no deal. President of the European Council Donald Tusk promised to make ‘the process of divorce the least painful for the EU’ implying the obvious antithesis for the UK. But as difficult as the Brexit process could be, the legitimacy of the EU’s request for alimony seems tenuous and the potential damage to the EU from a go-it-alone Britain should prove a strong incentive for some sort of eventual deal.