As we go to press the Prime Minister is furiously trying to persuade her colleagues that the deal she has come back from Brussels with is the best we can expect. Clearly between now and the vote in the commons anything can happen as, with the March deadline fast approaching, things are moving at breakneck speed.
It is with this caveat that we asked a renowned political commentator and former chairman of YouGov to give us his predictions for which he has outlined six different scenarios and the chances of each being correct.
Whilst politics dominates the news, the world does of course continue to spin. Brian Tora neatly sums up some other important topics that have a significant bearing on markets in his regular feature. The first is of course technology, where we’ve seen some of the world’s leading tech stocks come off significantly. We have written at length about the technology sector, where we still see significant growth and change. I believe it fair to say that valuations for companies within these sectors got ahead of themselves and I often refer back to the trillion dollar valuations that Amazon and Apple grew to in August and considered these to be much above their true valuations, and thus I would say the correction is ‘healthy’.
It has been a difficult period for stock markets recently. The FTSE 100 and S&P 500 were both down nearly 10%, a correction that was in some ways anticipated, as markets adjust to higher US interest rates and investors cashed in on the excessive valuations of US technology stocks. Stock market pain has been felt worldwide, ranging from one-third falls in emerging markets to greater than 10% falls in Germany, Japan and Hong Kong. I believe that US interest rates could rise to 3% in the States during 2019, which alongside a host of continued global geopolitical issues, could result in the continuation of high levels of volatility into the New Year.
In other features, John Royden discusses his views around interest rates from a bond holder’s perspective in light of the political situation and another key area we are watching as closely as possible is China; although this edition’s editorial suggests that whilst some aspects of the world’s financial systems can be forecast reasonably accurately, Chinese politics most certainly cannot.
Away from markets I am delighted to inform our readers that JM Finn’s discretionary portfolio service has recently been awarded the Gold Standard following a thorough due diligence process. The Gold Standard Awards have been supporting higher standards in financial services in the UK for the past 15 years. The awards not only take account of a company's capability to conduct business, but assess standards of service, financial strength, fair value and trust, as well as governance and social responsibility which reflect the current financial landscape and we are proud to receive this accolade.
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