Global Markets: A positive outlook for 2019

Hello, ladies and gentlemen, my name is Chris Leyland and I am the lead fund manager of the True Potential Portfolio proposition.

Today, I want to spend a minute or so looking back at what has happened so far in 2019 and then, more importantly, look forward, to what are the opportunities for the rest of the year.

Returns have been exceptional from all asset classes so far in 2019 with double digit gains seen from virtually all equity regions. January started strongly with the US central bank, the Federal Reserve, pausing raising interest rates, leading to a heady cocktail of investor positivity as stock markets now had the chance to breathe.

Trade tensions between the US and China muddied the waters mid way through the period. The situation being fluid with emotions heightened during May and into June. This has led to a move to more defensive assets such as bond markets.

President Xi Jinping and Donald Trump remain in a tit for tat battle with strategically placed tariffs and the blocking of trading with certain companies, such as Huawei, all providing endless newspaper headlines. As I speak the relationship appears to be moving in a conciliatory manner but this could follow the familiar pattern played out in public via the Twitter account of the US President.

In the background the Federal Reserve have shifted their stance again to more dovish making investors contemplate scope for interest rate cuts.

Ok, let’s look forward and overall, we continue to see opportunity. The beauty of multi-asset class investment is there is always somewhere to find growth, whether that be looking to different geographies, asset classes, currencies or, unique to True Potential, different management styles.

As we move forward, geopolitical events dominate headlines. It is the job of True Potential and our fund manager partners to filter out the noise in the search for growth opportunities.

From an economic perspective data has been softening, in some areas, but low unemployment and improved wage growth are supportive of consumption which remains resilient. Some industrial activity is being impacted by trade tensions, producing a weak trend and faltering business sentiment for sectors in the firing line. This is another reason why central bankers are turning more accommodative and likely to take measured action to sustain growth. At the company level earnings have generally met or beaten expectations and equity market valuations are more favourable relative to recent history.

Here at True Potential, our manager partners are cognisant of risks and recognise that opportunities arise when asset prices ebb and flow. Disparity in asset class return is becoming more pronounced making diversification more important than ever.

I hope you enjoyed this video and I look forward to speaking to you again.

Thank you.

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