News this past week:
- Oil prices continue to decline
- Brexit negotiations begin
- Bank of England split over policy rate moves
- MSCI adds China A shares to All Country World Index
- Brexit bills dominate UK Queen’s speech
As Barack Obama’s presidency began in January 2009 – deep in the market sell-off following the global financial crisis – it was reasonable to presume that his job was at best thankless and at worst almost impossible. Yet, in many ways history may well tell us that his job was simple in comparison to that of his successor. Obama rode to victory on a tide of optimism and expectation that set him apart starkly from George W. Bush. Obama’s youth and eloquence stood him apart from the man he replaced. During that time tensions and the risk of policy missteps were high, but equally expectations were low due to the volume of bad news.
As this is my final blog of 2016 I felt it an apt time to look back on the year and to look forward to some key issues for 2017. My colleague, Glyn Owen, will be writing a far more detailed review and outlook which will be published in the coming days . 2016 was a year of mixed fortunes for investors, a very weak start set precedence for what looks likely to be a decent year for equity markets. 2016 will be best remembered for its twin political surprises of Brexit and Trump, or Brump, if you will. Whilst both being seismic-scale political events, the fact that their respective domestic markets brushed them off underscores the fact that a macro or political story is not the same as an investment case. To put it another way – even if you had called both elections correctly, would you have positioned your portfolio to benefit from an equity rally in either case? Probably not.