Market Headlines Over the Christmas Period
- China: The People’s Bank of China lowered the required reserve ratio for banks by 0.5%, helping to support domestic liquidity
- US-China trade: President Trump announced that he would sign the Phase One US-China trade deal at the White House on January 15th. He also tweeted that “At a later date I will be going to Beijing where talks will begin on Phase Two!”
- Brexit: UK MPs voted in favour of the Withdrawal Agreement Bill at second reading, which is the bill that ratifies the Brexit deal into UK law. MPs will be resuming debate tomorrow, though thanks to the Conservatives’ 80-seat majority following the election, the bill is expected to pass through the House of Commons
- North Korea: Kim Jong unannounced he would be introducing a “new strategic weapon”
- France: Strikes have continued over reforms to public sector pensions. It is now reported that unions are aiming for a fourth day of nationwide protests on January 9 and a fifth on January 11. The far-left CGT union is pushing to escalate the demonstrations, calling for a complete blockade of the country’s refineries from January 7 to 10
- Spain: Following November’s inconclusive general election, Prime Minister Sanchez got the agreement he needed to form a new government after one of the Catalan separatist parties agreed that they would abstain in a confidence vote. Along with other abstentions, this means that Sanchez’s new coalition government between his Socialist Party and Podemos will be able to win a simple majority vote in parliament
The Year Ahead – Expected Cash Needs From Your Portfolio?
Our view is that equities will outperform insurance assets (e.g. bonds) over the next eighteen months (our short term) and in the long term. This short-term assessment is based upon a belief that the global economic cycle is resilient and continues to be supportive to equity investors, offset by a recognition of a high potential for geo-political growth shocks. We expect greater equity market volatility in 2020 in a fractured geopolitical landscape with ultra-low bond yields. With this in mind, if you have upcoming capital expenditure needs from your portfolio(s) that we are not aware of, we would be grateful if you could let us (and your Independent Financial Adviser if appropriate) know and we can plan accordingly.