QuotedData’s economic roundup – November 2018 is a collation of recent insights on markets and economies taken from the comments made by chairmen and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned. Kindly sponsored by Polar Capital.
Markets fell in October with stocks in Asia and emerging economies being particularly weak, on average. The pound lost more ground as the dollar strengthened (possibly in anticipation of further US interest rate increases). The oil price went into sharp reverse, ignoring any potential impact from the imposition of Iranian sanctions.
Brexit, trade wars, rising US rates and even reduced availability of research are cited as reasons for concern. However, many commentators still believe stock pickers can make money.
Michael Hughes, chairman of JPMorgan Mid Cap, thinks that valuations of UK mid cap companies do not reflect their growth prospects, regardless of the outcome of Brexit. The managers of that trust say it would be wrong to be too gloomy. However, the managers of Dunedin Income Growth feel that valuations are relatively full. The managers of Mercantile believe that, while earnings growth is coming through, geopolitical concerns may weigh on markets for some time. The managers of Strategic Equity Capital think that the advent of MiFID II has accentuated volatility within the UK small cap market, as investors are less well informed. Jonathan Brown, chairman of Invesco Perpetual UK Smaller Companies, is concerned about the impact of the rejection of the principles of free trade, drawing an analogy to the 1930s. Nicholas Fry, chairman of BlackRock Smaller Companies, highlights the challenges facing central bankers. The managers of that trust are cautious on the UK economy but think selected UK companies can still prosper.