Market Review – March/April 2019

It was apparent at the end of Q1 that there had been a major recovery in asset markets after the challenges of the final quarter of 2018.

Global

• Global equity markets saw their largest quarterly gains since 2010.
• Hopes for progress in US-China trade talks and optimism around US interest rates bolstered returns.
• Markets climbed despite concerns over the health of the global economy.

UK

• The UK equity market provided a positive return during March, which continued the upward trend following the first two months of the year.
• Brexit continued to dominate headlines as we approached the UK’s original exit date of 29 March 2019.
• The Chancellor’s Spring statement highlighted the UK’s “robust” economy despite political uncertainty.

US

• By the end of March, the US equity market capped the best quarter since 2009.
• Hopes for a trade deal between the world’s two largest economies drove the US equity market higher.
• Optimism around the Fed’s decision not to raise interest rates this year provided a further boost to markets.

Europe

• European equity markets rallied for the third consecutive month.
• Eurozone Composite PMI (Purchasing Managers Index – which measures the productivity and therefore health of the economy) for March dropped, raising doubts of a recovery.
• Germany’s 10-year Bund yield fell below 0% for the first time since 2016

Asia

• Asian equity markets ended March higher on US-China trade talks.
• Indian equities enjoy a pre-election rally, reversing earlier performance.
• China continued positive momentum on trade, improving the macroeconomic outlook.

Emerging Markets

• Asia, led by India, drove performance in emerging markets.
• Turkey was the weakest performer due to political concerns ahead of the local elections.
• Brazil was held back by weak economic activity data.

Fixed Interest

• Corporate bonds delivered another month of strong performance.
• The European Central Bank announced measures designed to stimulate the eurozone economy.
• The US Federal Reserve and European Central Bank continued their pivot toward more accommodative policy to encourage economic growth.