MWM Investment Newsletter – Winter 2019

Rising interest rates, trade wars, and a widespread slowing of economic growth caused markets to take fright in the last quarter of 2018 with global equities falling by 3.3% in Sterling terms.

Recent market falls follow a noticeable change in mood, and in particular how investors choose to interpret various economic data releases. In the past few years markets have chosen to place more weight on measures which appear supportive of economic growth, and have felt comfortable dismissing those which do not, as ultra low interest rates in developed markets drove asset allocation decisions towards equities. Since the US Federal Reserve has delivered on its forecasted rate rises, US treasuries have regained their attractiveness as an investment option for any investors troubled by signs of a growth slowdown.


The US drove growth prospects throughout 2018 leading to a divergence in fortunes across global stock markets. Despite positive personal spending data and a labour market which breeds consumer confidence and rising wages, concerns about the fading effects of tax cuts, export weakness caused in part by Dollar strength, and a rise in corporate borrowing costs have dominated sentiment. These factors when coupled with a White House which continues to jeopardise global trade and threaten the independence of the Federal Reserve have led to a shift to a much more bearish market sentiment.


In the ten years which have elapsed since the Global Financial Crisis, as well as near uniform ultra accommodative monetary policy, the world has relied on China to be the engine of economic growth. China’s growth has slowed in recent years and many leading indicators on Chinese growth, with the exception of housing construction, point to a continuing slowdown, but it is true that the Chinese authorities have both the fiscal fire power and the will to support growth.


Our Investment Committee agreed to maintain our cautious stance reflected by our neutral position in equities and overweight position in gold. Whilst recent market falls could be seen as a buying opportunity for equities, we remain vigilant to the possibility of continued volatility in markets as a variety of geopolitical and economic factors remain unresolved in the short term.


I hope you will find this newsletter interesting and relevant to you, and I would very much welcome any feedback you may have. Please do feel free to get in touch with your thoughts either by phone on 020 7063 4259, or by email on

Want to know more?