15th April – 21st April 2019


Front and centre of our thoughts this week include

For most people it seems Game of Thrones returning is the highlight of this week, however for a non-watcher I will be focusing my attention instead on the economic data released that could shape where markets move next. Considering the strength of equity markets this year (albeit following a severe fourth-quarter sell-off last year) alongside weakening economic data, we are surely going to have to see data start to improve significantly to lead markets higher. Having said that, a strong corporate earnings season will go some way to help equities march even higher – the earliest signs are positive, which are discussed below in the corporate section.

Arguably the most important piece of data to be released this week is China’s first-quarter GDP growth on Wednesday. Economic growth has been on a steadily decelerating trend over the past seven years as the world’s second largest economy transitions from a manufacturing-led economy to a services-led one. Indeed, it is expected to drop a further gear, down from the annualised rate of 6.6% in the fourth-quarter of last year to 6.3%. China has implemented a huge amount of stimulus into the economy more recently to deal with the impact of trade wars and a general synchronised slowdown. We are starting to see the positive signs of this stimulus showing up in some of the country’s soft data series – if the hard data, such as GDP growth, doesn’t follow this same path and in fact undershoots expectations, we would expect volatility (i.e. fear) to increase in financial markets.

Shifting now over to the world’s largest economy, who China remain in deep discussions over trade with, where the highlight for the US will be the release of retail sales for March. Expectations are high, with economists forecasting a 1.0% rise in March, rebounding from -0.2% seen in February. Considering the strong credit card sales reported by JPMorgan Chase (see below in the corporate section) for the first-quarter, our view is that it’s likely we will avoid a nasty surprise for the retail sales figure.

Wednesday we receive trade data from the US as well. Their trade deficit has been widening substantially over the past few years. However, last month we did see it narrowing, indicating Trump’s trade tactics could be starting to take effect – exports rebounded largely due to soybeans and motor vehicles.

Finally, it’s worth noting that Parliament is on an Easter break this week – as a result, we should receive a much-needed break ourselves from the Brexit rollercoaster.

Going on in the engine of Brexit

Theresa May managed to get the extension she wanted, but rather than her proposed June 30th deadline we will have a Brexit-themed Halloween with an October 31st deadline instead. This of course means that Britain will be participating in the European elections in May, unless the unlikely scenario of a deal being agreed is done prior to that.

Brexit uncertainty continues to weigh on investor sentiment towards the UK, as we have witnessed substantial outflows from UK equity funds since the 2016 referendum. According to the FT, nearly $25 billion has been withdrawn since the referendum, with the UK consistently sitting as one of the most underweight asset classes among fund managers.

In the rear view mirror of last week we saw

The UK economy grew more than expected in the three months to February – at a rate of 0.3% – as the manufacturing sector continued to recover. In fact, output in manufacturing at its highest level since April 2008. It’s tough to read too much into this, however, as it’s believed stockpiling by manufacturers ahead of Brexit has been the cause of this.

Mario Draghi, European Central Bank (ECB) President, indicated a willingness to act should the Euro area’s economy deteriorate at the ECB’s latest monetary policy meeting on Wednesday. Striking a cautious tone, the central bank left interest rates on hold again, while reiterating that it doesn’t expect to raise them before next year.

China’s trade data on Friday was mixed. Exports, as expected, returned to growth but actually bounced back much stronger than predicted as they jumped 14.2% over the year to March. Following weak export order numbers in China we would, however, expect exports for proceeding months to not be so strong. Imports continued to fall, contracting for the fourth consecutive month.

In the side view mirrors of corporate activity we notice

Corporate earnings season in the US was kicked off in a positive fashion on Friday with positive updates from banking giants JPMorgan Chase and Wells Fargo. Reassuringly for the wider economy, JPMorgan Chase’s credit card business saw sales volumes rise 10%, alleviating fears over consumer health.

With Lyft’s recent IPO, their main rival Uber has set out plans for what is tipped as the most anticipated IPO since Facebook’s. The ride-hailing company did not list a target price for the shares, however it’s rumoured they value the firm at around $100 billion – an astonishing number considering they posted $3 billion in operating losses in 2018. What’s more, top-line revenue growth actually declined from third-quarter to the fourth-quarter last year.

Source: Bloomberg. Figures are for the period 8th April to 12th April 2019.
Where the index is in a foreign currency, we have provided the local currency return.


The above chart provides the performance for the three developed market geographies where the TMWM MPS portfolios maintain their largest exposure. All investments and indexes can go down as well as up. Past performance is not a reliable indicator of future performance.

Opinions, interpretations and conclusions expressed in this document represent our judgement as of this date and are subject to change. Furthermore, the content is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or a solicitation to buy or sell any securities or to adopt any investment strategy. This note has been issued by Thomas Miller Wealth Management Limited which is authorised and regulated by the Financial Conduct Authority (Financial Services Register Number 594155). It is a company registered in England, number 08284862.


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The value of your investment can go down as well as up, and you can get back less than you originally invested. Past performance or any yields quoted should not be considered reliable indicators of future returns. Prevailing tax rates and relief are dependent on individual circumstances and are subject to change.

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