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Is equity performance and the corporate outlook misaligned?
There has been a relief bounce in the developed world of late, as concerns about the banking sector, particularly in the US, have waned. Equities started off the year well, but after a wobble in February, they regained their balance and there was optimism around the ending of inflation and interest rate cycles. Then we had the banking scare which led to a sell-off.
Since then, much of the confidence has been restored and international investors have made the most of the recovery in prices. The question is where do we go from here?
As I reported last week, our strategic investment partners are somewhat wary of how equity markets are likely to respond. The stress around the banking sector has made access to credit more difficult, which may impact an array of companies.
Yet, because of the recent difficulties, and the prospect of a quicker economic slowdown, investment markets are pricing in interest rate cuts by the end of the year.
Continues….
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.
