Substantial but fragile New Year recovery

While the UK public were stunned and distracted by the live constitutional drama between parliament and government over Brexit, equity markets continued their New Year’s recovery rally. Since the pre-Christmas lows, Global stock markets have handsomely recovered approximately 40% of their Q4/2018 losses, gaining around 8%. In the US, that recovery is over 10%.

State of the economy at the start of 2019 & earnings outlook

The first round of business sentiment data for 2019 is out, and it looks mixed at best. A number of purchasing managers indices (PMIs) came out this week, painting contrasting pictures for the services and manufacturing sectors across the world. PMIs rate businesses’ expectations out of 100, where a score above 50 is supposed to indicate expansion and a score below the opposite. But although 50 is the official ‘neutral’ line, most analysts suspect that the figure consistent with stable growth is slightly above that.

China stock-take: Trade war and reform

Hopes of thawing US-China tensions were raised this week, as talks between officials on each side seemed to show some progress. A statement from China’s Commerce Ministry released after the talks on Thursday proclaimed that officials had “held broad, deep and meticulous discussions on shared observations on trade issues and structural problems, laying the foundation for addressing areas of common concern.”

The commercial property conundrum

As we wrote last week, 2018 was a year to forget for investors, with most asset classes ending the year down. Strangely, the one exception to this was UK physical property funds. As measured by the investment association fund peer groups, most equity funds fell around 11% over the year. In contrast, those invested in UK bricks and mortar managed to return a positive 2.86%.

CES: beneath the glitz & glamour, some star technologies appear 

The start of a new year means it’s time for the annual Consumer Electronics Show (CES) in Las Vegas, a gathering for the world’s technology industry to show off their latest gadgets and gizmos. CES is important from an investor’s point of view, as it gives us a window into the themes and technologies that will shape our world in the coming years.


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