As predicted last week, record highs this week in the US as financial stocks rose on the back of anticipated interest rates rises next week. Across the globe, markets recovered with trade war tensions seemingly already being factored in and markets gaining confidence although we are not so sure the impact has really been felt yet. In the UK, Mrs May’s speech in Austria and an apparent lack of support on the “Chequers Plan” for Brexit from the EU, sent confidence in sterling tumbling, resulting in currency sensitive stocks i.e. FTSE 100 companies shooting up 2.55% on the week. Remember, a weak pound equals bigger profits for businesses that earn overseas and bring profits back into the UK. Seemingly, yet another period of yo-yo markets. It is clearly impossible to call when to be in and out of markets with many opting to drip feed in or out spreading both upside and downside risk. You will note we are still positive about China/Hong Kong markets as they are still 11% and 6% lower respectively than they were in February yet negative (despite the rises) for US/Japan as they are 11% higher than when we last invested there in February. Interest rate, trade war and Brexit sentiment will continue to dominate markets rather than real time economic outlooks.
Stock Market Indices
An average across the above indices of +2.87% this week.