The independent pensions and investment expert Broadstone has issued its latest Market Pulse.
Peter Dean, investment consulting director, says: “Global stock markets rose in May, an increase that was driven by strong returns in the US due to the country’s sustained economic improvement. However, the markets are anticipating an interest rate rise later in the year – this has the potential to negatively impact on emerging markets, which have suffered from slowing demand throughout May. “We expect continued volatility in the markets, due to political risks such as the Ukraine and the Middle East, which have increased over the past year.”
Highlights for May include: Global stock markets rose by 1.1 percent in Sterling terms, while S&P500 increased by 2 percent; UK gilts yields remained flat, with yields on 20 year gilts remaining at 2.53 percent p.a. Slowing retail sales in China saw the FTSE China index down 2.7 percent; Positive fundamentals in the commercial property market. Dean continued: “Greece’s continued debt negotiations have had a negative impact within the Eurozone; Greece defaulting on its debt is an ongoing possibility, and this remains a key risk for the Eurozone bond and equity markets although low oil prices, a weak Euro and easing austerity mean that growth prospects are still positive.
The UK financial markets surged following the Conservative Party’s majority win in the May election, despite concerns about the EU referendum and Scottish independence, and although inflation is likely to remain low for the rest of the year, this may not prevent an interest rate increase in late 2015, or early 2016.”