April arrives after Easter Holiday

April arrives after Easter Holiday

April arrives after Easter Holiday 375 232 AMA Team

Eggs_EasterHappy Easter! For those still enjoying the long weekend around the globe, we hope it’s been a good break, whilst for those in China, we’re looking forward to our break and the short week with the Qing Ming Festival from 4th-6th April. So let’s get right to it….
The global markets for the most part ended up on the week, with the S&P 500 reaching a new record high! This is the second US index to break through new ground this year and again has investors talking about how far this will go. There are certainly some concerns around global recovery and this is highlighted when situations in Europe arise or when weak data numbers are printed, but thus far everything seems in line with expectations and investors are willing this growth to continue.
Screen_Shot_2013_04_01_at_4.00.59_PMFundamentally, considering the amount of money that has been pumped into the markets through QE and bond purchases, China’s PMI’s we should be at much higher values. But it will continue to take time for investor confidence to fully return before this is translated and investors should be more diligent with their investment strategies. Considering the changes within the markets that have been seen over the past few years, this slow and steady growth is therefore a good thing in our opinion, but that’s just our opinion! This past week has also seen a reversal in China’s PMI numbers as they return back to higher levels, which was mentioned in last week’s Money Matters in that investors were hoping for China to return back to higher production levels after last month’s lower than expected reports.
Screen_Shot_2013_04_01_at_3.56.12_PMStaying with the emerging markets, China and Brazil have signed a currency swap deal which is one of the many indicators that emerging markets are looking for more sustainability amongst one another. Could this be seen as part of the leadership changes in China? Perhaps, but regardless of how it may be perceived, strengthening the ties between these two economies is beneficial as China remains Brazil’s largest trading partner. Looking at the common annual economic growth in 2012 for the BRICs (Brazil, Russia, India, China), these countries averaged around 4% growth vs. the 0.7% seen out of the G-7 so we can hopefully all see the potential these figures have on market performance.
The positive rebounds we’ve seen in the markets recently have yet to spill over to the commodity sector as energy, gold, BRIC CountriesScreen_Shot_2013_04_01_at_4.00.59_PMand industrial metals remain quite flat in comparison to equities. However, with them being tangible goods and necessary materials it should be only a matter of time before they do bounce back with interest. Bonds and Fixed interest holdings focused on emerging countries and high yield areas continue to perform well and we expect that to remain for the time being. Once again, and most importantly, we still urge investors to hold a balanced portfolio at this time.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more updates on the world financial news please visit our Weekly Global Economic Outlook.
Co-Head of Portfolio Management,
Darren Cox
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com

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