Multi-Manager

BMO Multi-Manager People’s perspective

Despite a lack of positive headlines, we have seen equity markets making some progress overall this week
February 2019
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Risk Disclaimer

Please note that this is a marketing communication and does not constitute investment advice or a recommendation to buy or sell investments nor should it be regarded as investment research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination. Views are held at the time of preparation.

Past performance is not a guide to future performance. Stock market and currency movements mean the value of investments and the income from them can go down as well as up and you may not get back the original amount invested.

The BMO Multi-Manager People’s perspective, providing you with a quick snapshot of the macro events over the last seven days and how they might affect markets in the short to medium term.   

  • Equity markets made some progress this week but government bond markets showed that outside of equities, economic data is weighing on sentiment.

 

  • In the US, the Democrats and Republicans agreed on a budget deal that should avert another government shutdown, which President Trump is likely to sign off on today. The lower funding for the president’s wall means he is likely to fund it through declaring a ‘national emergency’, a move that is likely to become bogged down in legal challenges.

 

  • With the US trade delegation in Beijing and meeting President Xi today, it seems some progress is being made on trade negotiations, though there are still hurdles to overcome. Our base case remains that some sort of deal is reached that will likely involve the Chinese committing to significant purchases of US goods – both sides will go away able to declare they were successful, though the deal is unlikely to have a great deal of substance.

 

  • The economic picture is certainly a cause for concern for the moment. The US is seeing a slowdown, as is China, but parts of Europe are close to outright recession.

 

  • Data releases in the US suggest that the fourth quarter economic growth data (delayed thanks to the government shutdown) could be worse than anticipated.

 

  • Eurozone growth for the fourth quarter was 0.2%, though the weakness in Industrial Production, down 4.2% – the biggest fall in nine years – highlights that European policymakers are facing some significant challenges.

 

  • UK growth for the fourth quarter was below expectations at 0.2%, with overall growth for 2018 at 1.4%, the slowest pace of growth since 2012.

 

  • Despite Prime Minister Theresa May’s defeat in Parliament yesterday, there has been something of an overall lull in substantive Brexit news, though 29 March looms ever larger on the horizon.

Risk Disclaimer

Please note that this is a marketing communication and does not constitute investment advice or a recommendation to buy or sell investments nor should it be regarded as investment research. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of its dissemination. Views are held at the time of preparation.

Past performance is not a guide to future performance. Stock market and currency movements mean the value of investments and the income from them can go down as well as up and you may not get back the original amount invested.

Subscribe to our Insights