Market Outlook Report – January 2019

Market Overview

January 2019 

Markets buoyed by optimism over US-China trade talks 
The United States and China have bolstered market confidence that they will roll back their trade war after officials concluded three days of negotiations in sanguine spirits. 

During January, leading shares indices across Asia and Europe rose as brief but positive statements appeared to encourage investors. As American officials prepared to depart Beijing hopes were raised that the world's two largest economies could draw a line under their acrimonious dispute and reach a deal. 

Relevance/ Impact 

Britain's steady growth to beat Europe's big players
Britain will grow at lease as fast as its biggest eurozone neighbours over the next two years as a sharp economic slowdown in the single currency bloc drags on global growth, the International Monetary Fund has said. 

Relevance/ Impact 

The emerging markets set for global domination 
By 2050 these emerging markets will dominate global GDP rankings, according to PricewaterhouseCoopers (PWC), a professional services group. 

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Amazon takes title of world's biggest company for first time 
Amazon was crowned the world’s most valuable public company this week, a milestone reached only 25 years after Jeff Bezos had founded the ecommerce giant in his garage.

When the closing bell sounded in New York on Monday, Amazon’s market capitalisation was $797 billion, pushing it past Microsoft, the former No 1, which was worth $784 billion.

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Rate rises hang in the balance as inflation hits two- year low 
Inflation has tumbled to its lowest level in nearly two years and is now running a whisker above the Bank of England’s 2% target, putting further rises in interest rates in doubt.


Share yields jump as markets slide 
Yields on UK shares have risen to their highest level since the credit crunch after companies paid out record dividends as markets fell.  The total amount of dividends on the main London stock market paid out last year increased by 5 per cent to £99.8 billion, driven by a resurgent mining sector, according to Link Asset Services.

At the same time stock prices suffered their worst year in a decade amid concerns over Brexit and global growth, with a sharp sell-off of 11 per cent in the fourth quarter. 

The combined effect has been to send the prospective dividend yield for investors to an “exceptionally high” 4.8 per cent, a level not seen since March 2009.

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This article is in the opinion of Reeves Independent financial advisers only and is not intended as advice and no investment decisions. The information in this blog or any response to comments should not be regarded as final advice. Please remember that the value of your investment can go down as well as up, and may be worth less than you paid in. Information is based on our understanding at January 2019.