Weekly Digest – INVESTEC

Please find attached Weekly Digest, with some thoughts regarding financial markets over the first half of 2019.

There was enough evidence of a thawing in geo-political tensions over the weekend to give risk assets some initial momentum this week. Equity markets generally traded c.1% higher today.   With regard to developments from the sidelines of the G20 (the G20 itself being a sideshow), we have been here before with the trade ceasefire between the US and China only for talks to falter, although the softening of the US’s stance on trading with Huawei is a positive signal.

Notwithstanding periods of heightened volatility, we have closed out the first half of the year with some positive gains. The FTSE All Share has gained 10.4% in capital terms and 13.0% on a total return basis, with very little to separate the FTSE 100 from the FTSE 250. The S&P added an even more impressive 18.5% in dollar terms and virtually the same amount to a sterling investor, helping the broad world index up 16.7% in dollar terms. In other asset classes, the broad UK Gilt market returned 4.7% and index-linked government debt 7.9%. Gold delivered 10.3% to a sterling investor.  The oil price is also firm as Russia has agreed with the Saudis to extend the cut to production, which should be ratified by the official OPEC committee as it meets today and tomorrow. The US loses half a day’s trading on Wednesday and a full-day on Thursday to mark Independence day.