We have always been mindful that markets have been driven by strong-performing technology stocks in the US and of course, we have benefitted from this rally since last October, especially. We have also warned of the need to diversify into other geographies, which we have been implementing within selective portfolios over recent months, with a particular emphasis on Asia. Recent performance figures reinforce our strategy. More of this below.
Tesla has seen its share price plummet this year but there has been some good news for shareholders as a result of Elon Musk’s visit to China. It further goes to show how prone technology stocks are to volatility, particularly at elevated valuations. It doesn’t mean we are negative regarding technology stocks, but there is no doubt that there are attractive valuations on offer elsewhere.
Whilst on the face of it, the ‘stickiness’ of interest rates is a concern, but the main reason is that economies are showing greater resilience than had been expected. The US economy is strong relative to its European counterparts. It’s now expected that the first-rate reductions will be first seen in the UK or Europe. However, better economic news may slow down the appetite for rate cuts on a frequent basis in all of the developed economies.
Here is this week’s agenda:
- Equity movements in April
- Tesla has better news
- Mixed news for Amazon
- Eurozone outlook improves
- UK property price falls
- Read all about it, read all about it!
- It’s all about balance
- Summary
Equity movements in April
The US has been spooked not only by the Federal Reserve’s “higher for longer” rhetoric, which suggests that interest rates will remain elevated for an extended period, but also by growing concerns that the Fed may actually decide to raise interest rates further. US equities have endured their worst month since September 2023.
Continues…
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.
