Mazars Wealth Management Investment Newsletter April 2018

Read our full MWM Newsletter April 2018

The first quarter of 2018 saw a return of market volatility and a reversal of gains from the end of 2017. Despite a strong January, global equities finished the quarter down 2.1% in local currency terms, but down 4.7% for UK investors as the Pound continued to strengthen, particularly against the US Dollar. UK equities fell the furthest (-6.9%) as Sterling strength and concerns about consumer confidence weighed on market sentiment. Meanwhile European and US stocks fell by 5.4% and 4.3% respectively. Unusually in a downturn, emerging market stocks remained relatively resilient losing only 2.1% in Sterling terms.

Jerome Powell took charge of US monetary policy in January and, despite market volatility, the US Federal Reserve continued on its path of interest rate rises albeit with some mixed messages regarding the strength of the US economy. Whilst the Bank of England held rates steady, two members of the MPC voted for a rate rise leading markets to expect tightening, despite continuing Brexit uncertainty. Markets were spooked when Donald Trump’s talk of tariffs became a reality and the prospect of trade wars with China heightened the threats to global trade. Elsewhere technology stocks were heavily hit after questionable use of customer data raised the prospect of increased regulation for social media companies.

In January we took the opportunity to take some profit from our Equity holdings within portfolios, and held this amount in cash. We are now redeploying part of this cash into Gold. Although economic growth remains strong we are mindful of the changing interest rate environment and look to increase the diversity within our portfolios.