In a President Trump world, equity markets apparently don’t do big moves; realised volatility on the S&P 500 has come in below 7% since the 8th November election. Therefore, despite equities sitting only 1.7% below their all-time high, the last month has perhaps represented the modern-day version of “risk-off” for the US. This week:
Certainly, US growth for Q1 2017 will have slowed materially from the 2.1% annualised pace in Q4 2016 (consensus is closer to 1%). Moreover, expectations for Trump reform and fiscal stimulus are now almost all priced out.
However, on a global basis the tone is more optimistic. Inflows towards European equities over the last fortnight were the best in over a year, whilst there were also meaningful positive flows into European bond and EM bonds and equities. This helped continue the out-performance of emerging market equities.
Going forward, PMIs suggest the global manufacturing recovery is likely to consolidate after a block-buster rebound. However, the overall growth momentum should remain positive.DOWNLOAD THE FULL ARTICLE View All Global Market Updates
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