While no deal is not the most likely scenario in our view, the risks are rising. The UK outlook is binary. A Brexit deal could see sterling bounce to 1.40 against the dollar, but no deal on 31 October could see a further slump to 1.10.
With Boris Johnson confirmed as the new prime minister we’ve had a look at some of the areas of the market that could benefit from regime change.
July has been a remarkable month in some ways. The England and Wales men’s cricket team won the World Cup in the most dramatic of games, Egan Bernal became the first Tour de France winner from Latin America and the highest temperature ever officially recorded in the UK was set at 38.7C
After an exceptionally strong start to the year, financial markets paused for breath in July, with most asset classes delivering muted returns. The Federal Reserve (the Fed) lowered US interest rates for the first time in 11 years, and the European Central Bank (ECB) gave strong hints that an easing package is on the way.
A summary of the factors driving global markets over the last month.
The equity and credit markets are coping with trade uncertainty remarkably well. This appears to sit in contrast to the government bond market, which paints a considerably bleaker picture of the outlook. Indeed, all assets across the risk spectrum have rallied significantly this year.
Karen Ward, Chief Market Strategist for EMEA, looks ahead to the second half of 2019 and considers what might lie in store for global economies, including: Will the trade war prove fatal for the global economy? China’s commitment to ensure its economic ambitions remain on track, The challenges of asset allocation in this cycle
The new prime minister is likely to meet similar challenges given the nation – and as a result parliament - remains divided over what it wants from Brexit. But investors must understand the impact “no-deal” would have on sterling, stocks and gilts versus “change of government”.
A summary of the factors driving global markets over the last month.
Following the outcome of the European elections, Karen Ward, Chief Market Strategist for EMEA, will update us on her latest thoughts regarding Brexit and the impact on UK markets. She will consider whether a new Prime Minister or the prospect of a general election changes the outlook.
This is close to being the longest economic expansion on record. Nobody knows exactly when it will end, so it’s worth considering what investments could rise in value when equities and other risk assets fall during the next downturn.
A summary of the factors driving global markets over the last month.
Volatility in global markets has picked up over the last six to nine months. Iain Stealey, International Chief Investment Officer, Global Fixed Income Currency & Commodities Group and Portfolio Manager of the JPM Global Bond Opportunities Fund, looks at how the fund’s disciplined, dynamic approach is helping it to navigate this more uncertain environment.
Lead Portfolio Manager Clare Hart explains how the JPM US Equity Income Fund's exclusive focus on quality, value and dividends allows it to share in the long-term growth of the US stock market, while keeping a lid on volatility whenever the going gets tough.
Rising incomes and technological change in the emerging economies present considerable investment opportunities for investors with longer time horizons. Karen Ward, Chief Market Strategist for EMEA, highlights factors to consider for these markets.
Stock prices climbed across regions for the second consecutive month in February. Investor sentiment was buoyed by a combination of constructive US-China trade talks, a considerably more dovish stance from the US Federal Reserve and the implementation of Chinese stimulus measures.
Although global growth momentum has slowed, Emerging Market economies and markets remain firmly in mid cycle. When we consider the outlook for EM equities in 2019, we don’t worry about late-cycle constraints. Nor do we worry about valuations-after last year’s battering, valuations are quite attractive.
Like summers, economic expansions do not last forever. Karen Ward, Chief Market Strategist for EMEA, looks at portfolio considerations in the late cycle.
Our investment outlook for 2018 was titled, “It ain’t over till the central banks sing”. We argued that although the cycle was relatively old, there were still not convincing signs that the global economy was at full capacity.
Markets were again plagued by volatility in May, largely due to heightened political risk. The US administration’s approach to global trade, North Korea and Iran remain uncertain, while Italy’s new populist government added to market concerns. Risk-off sentiment contributed to a significant rise in the value of the US dollar, which strengthened 2% vs. a basket of major currencies.