And so it goes
06 Apr 2018
Global Equity Markets fell in March, although falls in International Markets were somewhat mitigated by a weaker Australian Dollar.
In a strong global economy, the major risk is inflation and a rise in interest rates. This was evident in February where short term rates were rising. However, in the US longer term bond yields steadied and then fell. Also impacting markets were fears of a trade war. A trade war would be bad for markets; however, we expect this is all part of Trump’s negotiating style.
A President tweeting about companies is absurd. Regulation is always the greatest underlying risk for the US technology giants. While Facebook started these issues with its data breaches, now Trump is tweeting about Amazon, where he has a personal conflict with Jeff Bezos.
If the government tries to regulate dynamic companies like these, it introduces uncertainly into the most desirable companies in the market, which does not bode well.
So while investors sit on the sidelines, their main focus will shift towards report earnings, but only if Trump has quietened down. The bark is usually worse than the bite!
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