Please find below our Weekly Market Update for the week ending 15th March 2019.
The intention is to provide a brief insight into the latest dynamics and inform you of any changes occurring within the model portfolios.
Blue Sky Comment
The focus has to be on the UK this week. Have you managed to keep up with what they have been voting for?
Parliament have effectively voted to avoid a no deal and for a 3 month extension to Article 50. The question is, will the EU play ball? If they do grant an extension what difference is this going to make. After the votes, it certainly feels as though eventually the decision will be ‘rinsed out’ out of Parliament but if not, it is likely to go to a people’s vote or even a general election. Mind you, with the latter, how the political parties are going to make it clear what they stand for is anyone’s guess!!
In relation to the investment markets, I like the summation of Chris Rodgers at Sanlam investments.
“Uncertainty is already costing the UK dearly with the ONS this week further downgrading its forecast. Yet the Chancellor’s hands are tied until Parliament delivers clarity on its future relationship with the EU.
The risk of a no deal Brexit has been significantly reduced but overseas investors remain on the sidelines. The fundamentals of the UK do remain strong and we expect an immediate boost to UK equities and Sterling once the Brexit outcome is made clear. In the meantime, investors may wish to consider their exposure to domestically focussed UK equities which in some cases may be considerably under valued”
A good summation and one which we concur with. Please note that the comment about domestically focussed UK equities should not be construed as advice. Any exposure depends upon your individual risk approach.
We have seen Sterling rise strongly this week reaching 1.18 against the Euro at its highest point. If we see a solution to the Brexit crisis, expect Sterling to breach 1.20. The question is when will we have a solution? Some commentators are now saying it could be years!!…please no!