US Stock Market Hits New High as the worries from trade war subside due to optimism that a interim deal may be reached between US and China. Other positive news in US also pushed the stock market up. The US Central Bank once again lowered the interest rate by another 0.25% and this has brought much support for the stock market. Recent employment data from US is also encouraging with the US added more than expected no of jobs in Oct though slower hiring persisted throughout the year.
However, over at China, recent data indicated that the Chinese economy is not holding up as well as US in the face of the trade war. China exporters started to reduce their prices in order to offset the effect of the US tariffs and the Chinese consumers also cut back on their spending in anticipation of a slow-down and a loss of income. However, the optimism of a possible interim deal has helped to stabilize the Chinese stock market and its performance has been flat-line for the pass few months. Other Emerging Markets such as Brazil and Russia performed extremely well as they continue to recover from their recessions and have helped to lift the performance of the Emerging Market fund.
Meanwhile, over at EU, the Brexit saga is once again postponed again, with no end in sight. Mario Draghi also stepped down as the EU Central Bank President and is replaced by Christine Lagarde. She previously held the role of managing director of the International Monetary Fund (IMF) and the world is watching eagerly to see if she will maintain the ultra loose monetary policies which was the trade mark of her predecessor.
Portfolio Strategy
The current balance strategy seems to be the most optimal strategy at this point of time in the face of the uncertainty of a volatile trade war. The portfolio benefited from the heavy weight-age in US equities and portfolio haas performed well as a result of that. The current strategy will be maintained until there is better clarity where the direction of the trade war will go.
No comments:
Post a Comment