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Market outlook: Equity investors should ignore short-term ‘noise’

Publication Date: 12 Apr 2019 - By Gaurav Sharma (Associate Editor ReachX) By Gaurav Sharma (Associate Editor ReachX)
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Equity Fundamental Macro Equity Global

After a decidedly bearish Q4 2018, equity markets resumed an upward trajectory early in the New Year, and the contrast could not have been starker. 

While statistics show Q4 2018 was the worst quarter for equity markets in seven years; fast forward to the next quarter to Q1 of 2019 and we contrastingly saw the best quarter for equity markets in seven years.

It’s why Jordan Sriharan, Head of Collectives Research and Senior Portfolio Manager at Thomas Miller Investment, says investors should ignore short-term ‘noise’.

“To describe this part of the economic cycle as volatile would be an understatement, but also shows the huge importance of looking through the short-term noise in markets as part of the investment decision-making process,” he wrote in a recent client note. 

Of course, the macroeconomic elephant in the room remains the ongoing China-US trade tussle. 

“The China-US trade talks are expected to dial up a notch with Chinese Vice Premier Liu He visit to Washington. Helping to soothe relations has been the news that the Chinese government will continue to extend the suspension of retaliatory tariffs on US cars.” 

With US President Donald Trump having already delayed tariffs from their original 1 March deadline, it appears as though both sides are serious about reaching a compromise. “Whether they are able to do this in a timely enough manner with the clock running down to the last year of his current term as US President, we will have to wait and see,” Sriharan concluded. 

Disclosure:

I have no positions in any of the securities referenced in the contribution

I do not use any non-public, material information in this contribution

To the best of my knowledge, the views expressed in this contribution comply with UK law

I agree with the terms and conditions of ReachX

This contribution is for informational purpose and does not constitute investment advice nor is it an offer to sell or buy, nor is it a recommendation for any security.

Gaurav Sharma (Associate Editor ReachX)

 

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