The second quarter of 2019 has continued the positive trend of Q1 with markets gaining ground as a result of low interest rates and talk of further economic stimulus in Europe as revealed by the EU Central Bank Head Mario Draghi. Q1 earnings in the US have beaten targets and with a Presidential Election in November 2020 President Trump and his advisors are talking of lower interest rates and of the S&P 500 reaching 3,000 points by year end with renewed energy from fresh trade talks with China.
However, significant caution is needed, optimism in the equities markets is not shared in the fixed income space with significant falls in bond yields and many forecasting organisations anticipating slower growth in a similar ’end of year’ market correction that was experienced in 2018. We are very mindful of an escalation of political tensions in the Gulf affecting oil prices. In the UK it almost goes without saying that Brexit continues to cast its shadow with recent European Parliament elections making it clear that the population remains just as divided. As there is still no majority for a no-deal Brexit in Parliament, this remains a concern for markets.
Please note, our Market Overview & Outlook is our view of markets and does not constitute investment advice. Past performance is not necessarily an indication of future returns; the value of investments and any income from them is not guaranteed and can fall as well as rise. Overseas investments are affected by currency movements and exchange rates. If you would like investment advice on your individual circumstances, please do not hesitate to get in touch.