Greetings! As another week is upon us, (where do the weekends go?), here’s the latest Money Matters.
Last week resembled that of a yoyo experiencing both ups and downs, but most indices ended the week in positive territory. The week did however start out on the same upward trend we’ve been seeing over the past two weeks, but hit a dip mid week on a bland and rather lackluster report of the latest US FED meeting notes. In addition, the flash PMI (or the manufacturing gauge) for China came out surprisingly low and the markets held back a bit to look at the World’s top two economies. This didn’t last long though and markets started pushing back up and ended the week in the green, with the Hang Seng up 0.3%, the S&P up 0.4%, and the FTSE up 2.4%.
Despite weekly numbers being neither here nor there in regards to their impact, there was still an evident level of resistance that could mean some of the fear and concern (around markets) is waning. The economy still remains fragile but some of this recent news, if released in the past, likely would have led to bigger and longer drops. Thoughts behind the reason for this shift in response (by markets), is perhaps due to some investors looking at the long term side of things, and using the corporate data and GDP projections as well as focusing more on the fundamentals, rather than on what the TV says. Our readers will know Q4 corporate data was relatively strong, and the GDP forecasts are far from where they want to be, but are nonetheless still moving in the right direction. It’s still a bit early however to see whether this is really the case, or if investors are just delaying their next moves. Either way, there does seem to be some resilience in the markets which is a welcome change.
Over in Asia the focus will likely remain on China as this makes two months of weaker than expected manufacturing numbers, although with the recent jump in import and export data we’ll have to see if this is just the Chinese New Year holiday having some impact or whether this could be something more prolonged, and here to stay. We would prefer to look at it as a cheaper opportunity to increase exposure to Asia as we’re still bullish on the region, but shouldn’t ignore that the hurdles and obstacles remain. In saying that, hurdles and obstacles are prevalent in many areas around the globe, so perhaps the value in Asia looks more attractive than some of the higher priced assets in the developed markets at this time.
With that said, we still encourage a well balanced and diversified portfolio as we continue through the year, and to spread exposure across a variety of asset classes.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Austen Morris Associates Wealth Management & Investment Team
Darren Cox
Co-Head of Portfolio Management
