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.
Survey data out of both the US and UK in recent months has confounded perceived wisdom
because despite significant political upheaval in these countries last year, confidence has improved.
This is something of a surprise because such substantial changes may be considered a destabilisation risk given the relative fragility of confidence following the global financial crisis. Indeed, only twelve months ago the market would seemingly fall regardless of news flow as a combination of weak resource prices, concerns over China and now long forgotten whispers about the end of the credit cycle provided a negative background that was difficult to overlook.
To paraphrase Charles Mackay, author of Extraordinary Popular Delusions and the Madness of Crowds (first published in 1841) market participants were gripped by fear and in that condition investors saw risk even in enticing opportunities.
James Klempster (CFA), Head of Portfolio Management for Momentum Global Investment Management shares his view. Click here to view.
She said that the UK government will put the Brexit deal it agrees with the European Union to a parliamentary vote. She also vowed to make a ‘truly Global Britain’. “I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be a secure, prosperous, tolerant country, a magnet for international talent,” May said.
The FTSE 100 traded negative after the speech. However, the sterling was up by more than 2.8 percent against the U.S dollar, putting it on track for its biggest daily increase since 1998.
Source: CNBC, 17 Jan
• Sterling vs USD lowest since 1985, whilst UK equities reach record highs
• US economy adds 156,000 jobs in September
• Dollar rises as expectations converge on December rate hike
• ECB rumours trigger rise in global bond yields
• In commodities, oil rises and gold falls
After weeks of the phoney war following the Brexit vote, yesterday PM Theresa May officially fired the starting pistol for the UK to leave the European Union when she announced the Conservative Government will invoke Article 50 before the end of March 2017.
August proved to be a particularly quiet month for markets, with low levels of volatility across equities and bonds, and little by way of significant news flow. Overall the ‘risk on’ environment of July, post the UK Brexit referendum, broadly continued in August: most equity markets rose modestly higher, with emerging markets leading the way and adding 2.5% in the month.
Glyn Owen, Investment Director at Momentum Global Investment Management shares his views on what we can be likely to expect from global markets over the coming months.