Investment Market Views
Earlier this morning I watched with interest a Bloomberg interview with Andrew Wilson of Goldman Sachs – click the link to watch the interview/article: https://www.youtube.com/watch?v=SfruYeFDT90
Andrew Wilson’s views see no recession on the horizon in the US with unemployment remaining low and wage growth strong, but monetary policy will play a big part in supporting the economy, with further rate cuts likely – although data dependent.
A quiet truce seems to be ‘in play’ in relation to Trump’s trade policy, which has settled the nerves of the US main markets somewhat, since the low points of August.
Trump and impeachment rumbles on, with Trump’s recent statement – calling the matter a ‘lynching’ – with no ‘quid pro quo’ offered, as nonsense – leading to a ‘lynching’. It seems this position is likely to run on so we must watch this space!
Brexit Deadlock …….
Well, the show rolls on ….. and on and on ……
The path remains unclear, although the latest news is that the EU are to extend the delay. Considering the uncertainty, it’s surprising how investment markets and sterling are holding up ….
Sterling reached £1.30 against the $, falling back to £1.28 against the $ at the time of writing, but the politics of the position is producing no certainty and investment markets generally dislike uncertainty.
Take a look at the 3 month picture of both the FTSE 100 Index and FTSE All Share Index below:
INDEXFTSE: UKX
INDEXFTSE: ASX
Click the link to access a broader picture – https://www.ft.com/content/34700f4c-e36f-355b-b407-9ddfc3601c0d
At this point, Bojo’s Brexit deal is ‘paused’ in order to gather clarification of the EU’s timetable for a further delay, following the Brexit defeat in the Commons last night, which was based upon insufficient time to scrutinise the deal agreed with the EU, along with having no economic impact assessment.
Commentators are suggesting that the next action is to press ahead for a General Election… and it seems that Labour will agree to a General Election if a no deal Brexit is taken off the table… For now, it seems that MP’s are twiddling their thumbs as the expectation was a 3 day debate in relation to the terms of the Brexit deal agreed between Bojo’s government and the EU.
Volatility is therefore likely to remain and drag on, with flatter days of volatility when newsflow is less concerning.
Investment positioning – risk positions
We have carried out a structural review of the fund holdings within our risk models (which will be reviewed ongoing) and are pleased with the results and delivery against the relative benchmark and peers.
It is always imperative for investors to consider the investment risk taken but we are completely satisfied that our investment risk model portfolios pass the ‘Ronseal test’ and are doing what is expected – relative to markets and benchmarks.
An investor’s capacity to ‘suffer capital loss’ is a focus of consideration, especially during increased investment market volatility. No one has a crystal ball so predicting the future is futile, which is why selecting a portfolio suitable to an investor’s long term needs is so very important.
If an investor has a change of view or need, informing us is a priority as we can’t action without providing advice and understanding the position, naturally.
I suspect we can expect a bumpy ride, although central banks are intent on supporting the economic environment in which they operate, which leads to artifical support for companies – leading to managed outcomes for funds/stocks.
As always, if you require advice, simply get in touch.
Best Regards.
Richard and Best Price FS Team