Please find below our Weekly Market Update for the week ending 8th 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
We thought it would be interesting to give you some statistics to reinforce the volatility experienced of late. The S&P 500 experienced its worst December since 1931…quite an amazing statistic…. but then guess what? it was followed by the best opening 8 weeks of a year since 1991!!
The last 2 months have seen a healthy bounce back in equity prices but in the last 48 hours the momentum has been stalled following news, mainly from China and Europe.
The fall marked the worst daily performance in China since a drop of 4.8 per cent on October 11 last year whilst in Hong Kong the Hang Seng China Enterprises index of major mainland Chinese companies was off 2.6 per cent in afternoon trading. Hong Kong’s broader Hang Seng index fell 2%. A policy shift from the European Central Bank set off concerns about global growth. China added to the woes when it reported its biggest drop in exports since 2016.
The Euro Stoxx 600 index sank the most in a month with car makers and miners leading the decline. On Thursday the European Central Bank slashed growth forecasts. Core European bonds pushed higher. ECB President Mario Draghi delivered fresh stimulus as he downgraded the outlook for the Euro area. Incidentally, we have a low weighting in this region.
A week that has seen China cut its goal for economic expansion, The Bank of Canada dial back its expectations for policy tightening and the OECD lower its global outlook.
The activity in the markets again reinforces the benefit of a well-diversified portfolio. We will continue to have many such short sharp shocks followed by periods of strong performance.
Source: FT and Bloomberg