Imperium Capital Publication

Weekly Digest – 29 October 2017

  • US equities hit record highs
  • The European Central Bank announces QE taper plans
  • UK and US GDP growth beats expectations
  • US House of Representatives votes in favour of 2018 budget
  • German business sentiment hits record high
  • Brent crude oil prices rose 4.7% during the week

Viewpoint – October 2017

During September the global economy continued to be supportive for risk assets, with global equities performing strong. Government bonds retreated in light of the more risk-on environment, whilst the US Dollar strengthened towards the end of the period, a contrast to its large year-to-date falls.

During the quarter developed equity markets returned 2.2% with almost every major region partaking in the rise. Within developed markets, Japan posted the strongest returns in local currency terms advancing 4.3%, followed by Continental Europe with a 3.9% gain. Emerging markets posted returns of -0.4%, the first negative month since November 2016.

Viewpoint – September 2017

Economic trends globally remained broadly favourable and constructive for risk assets, demonstrated by equity markets realising positive returns for a tenth successive month. Despite this, a number of factors served to disturb markets and spike volatility to the highest levels since the US election. Three events were of particular concern to investors and led to flows into more defensive assets. Firstly, the serious escalation in the North Korean nuclear weapons crisis and increasingly bellicose rhetoric from the Trump administration has risen the risk of military conflict involving the US, China and Russia, potentially leading to dramatic global consequences. Secondly, Texas was hit by Hurricane Harvey, one of the strongest hurricanes ever to reach mainland US, causing immense damage, cost and disruption. Gasoline prices were immediately affected with the hurricane decommissioning 20% of US refining capacity, whilst insurance sector stocks fell steeply. Thirdly, the US debt limit came into light once again, with congress needing to raise the ceiling by 3rd October 2017 to avoid default.

Weekly Digest – 24 September 2017

  • Angela Merkel wins German election
  • Federal Reserve to begin balance sheet reduction in October
  • US President Trump imposes fresh sanctions on North Korea
  • China long-term sovereign credit rating downgraded by S&P
  • Theresa May clarifies Brexit stance in Florence speech