Imperium Capital Publication

Viewpoint – February 2019

What a difference a month makes. Following the despair of December, markets made one of their best ever starts to a new year, with virtually all asset classes and markets rising, some very sharply. Many equity markets managed to recover the ground lost in December.

The US led the way with a return of 8%, pulling the MSCI World index up by 7.8%. In this risk-on environment, emerging markets outperformed developed markets, up 8.8%, with Latin America again relatively strong, up 15%. While all markets were buoyant, the UK was the notable underperformer, up 3.7%. UK equities were held back by a strong pound which rallied 2.5% on a trade-weighted basis as fears of a no deal Brexit faded. All sectors of the markets rose, with
technology stocks leading the way after their particularly sharp falls in Q4 last year. The tech-heavy NASDAQ index was up 10% and the NY FANGs 13%, the latter having risen by 22% from the December 24th lows compared with a 15% rise in the S&P 500.

Weekly Digest – 21 January 2019

  • 2018 German growth at slowest pace in five years
  • UK Parliament rejected PM May’s EU divorce deal by 230 votes
  • Brent Crude continued its strong run, rallying 3.7%, ending the week at $62.7 per barrel
  • Gold ended the week 0.6% lower at 1282.7 per ounce

Viewpoint – January 2019

With broadening evidence of a global slowdown and both the Federal Reserve and European Central Bank continuing to tighten policy, investors took fright in December, resulting in steep falls across nearly all equity markets and a rush into safe haven assets. Having held up well during a difficult year for risk assets the key US market suffered a disastrous month, falling 9%, taking its return for the year into negative territory. The MSCI World index declined 8% for the month and 9% for the year, making this the worst year for markets since the financial crisis. Emerging markets also suffered but outperformed developed markets in December, the MSCI Emerging Markets index fell 3% in the month. That leaves emerging markets down 15% for the year but the nadir was reached in October and the big falls in markets in recent months have been concentrated in the US, Japan and Europe. Particularly steep falls came in the FAANGs stocks, which have fallen by around a third from their mid-year peaks.