Page 6 - DIY Magazine June 2018

THE BIG PICTURE – ECONOMIC AND POLITICAL SUMMARY FROM QUOTEDDATA
Each month at QuotedData, the investment trust analysts collate the insights on markets and economics taken from comments made by chairmen and managers of investment companies investing across the globe.
ROUNDUP
Global stock markets have risen; concerns about protectionism softened and tensions in the Middle East abated. US and Eurozone equities posted a narrow gain, supported by ongoing strength in economic data, a buoyant oil sector and reduced trade worries.
Sterling weakness and expectations of a rate hike in the UK fell after some disappointing economic data. Japanese equities gained as yen weakened against the US dollar on reduced geopolitical risk. Emerging markets equities returns were negative due to US dollar strength.
GLOBAL
Cautious optimism for equity markets, with rising inflation less of a concern. Geopolitical risks remain.
A marked change in the views expressed by global investment managers; Alan Hodson of JPMorgan Elect said robust global growth should support earnings and that dividends should continue to increase. Interest rates are expected to rise in the US and UK, with markets already highly rated.
Simon Jeffreys of Henderson International Income says economic growth has improved
while unemployment continues to fall in most major economies. Modest interest rate increases in the US and UK, elsewhere monetary policy has focused on stimulating economic activity.
The political landscape remains uneven. Neil Gaskell of Martin Currie Global Portfolio Trust says markets have been strong for some time, but with one short- term market correction; he believes others could occur if inflation exceeds current expectations of a gradual increase during the year.
UNITED KINGDOM
Cautious optimism - all commentators on UK equities agreed that the outlook for the UK economy is positive, but differ as to what extent.
Tom Bartlam of Jupiter UK Growth Investment Trust
believes that investor sentiment to the UK domestic market will improve; Mercantile Investment Trust said global economic growth has displayed improving momentum for well over a year, but the UK has lagged behind other developed markets due to concerns over Brexit and lower levels of disposable income.
BlackRock Smaller Companies Trust is wary of the UK economy, particularly for companies with a focus on the domestic market.
ASIA
More volatility - after strong performance and low interest rates, there is speculation as to how this might end; Nigel Cayzer of Aberdeen Asian Smaller Companies Investment Trust believes volatility can bring high valuations back down.
Mike Kerley of Henderson Far East Income says the effect of any US move to place tariffs on goods and services is impossible to predict; The Scottish Oriental Smaller Companies Trust is concerned that the economic growth in the region has happened against
a backdrop of rising debt with interest rates at all-time lows.Susan Platts-Martin Witan Pacific Investment Trust says corporate earnings growth remains strong.
DIY Investor Magazine | Jun 2018 6