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Shake off the downbeat mood

Date: 12/11/2018
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Most global equities have now recovered some of their October losses although the UK market has, perhaps unsurprisingly, been something of a laggard.  The excruciatingly tedious process of the UK extracting itself from the European Union continues to exert downward pressure on equities.  The pound, too, has been hugely influenced by perceptions of a deal or no deal.  And it’s starting to look as if Noel Edmonds might well handle the whole thing better than some of the politicians seem to be doing. 

Elsewhere, Europe has its share of political issues, too, of course.  At the moment they want to send Italy to the naughty step for daring to put forward budget proposals that break the rules.  Italy is unlikely to be the only one wanting to do this so expect a firm stance from the EU on it.  In the US, the Mid Term elections were last week’s big news and, as expected, produced umpteen column inches of ‘analysis’.  The bit that stuck out for us was the suggestion that the US equity market will now do better because it always does after these elections.  Seldom has there been a better case for past performance having no bearing whatsoever on the future.

We are now trudging through the autumn weeks towards the end of the year.  At the moment, it seems hard to identify anything that could give markets some really positive momentum.  That is not to say we are worried, simply that investors need to shake off the downbeat mood and worries for markets to settle into a prolonged upward trajectory.  A satisfactory outcome to one of the big issues, such as an agreement between the US and China on trade, could prove to be just the catalyst needed.

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