Euro-risk has been significantly reduced with the outcome of the French election as it appears that the centrist candidate will become the next president. The French appear to have found the middle ground. What an idea!
So now focus will turn to Washington to see what will transpire with the budget, the wall, health care and tax reform, which is supposed to be announced this week. Also, avoiding a government shutdown (before Saturday) is on the agenda. We must also keep an eye on developments with North Korea, Russia, Syria and Afghanistan.
Behind the headlines:
Central banks (the Bank of Japan and the European Central Bank meet this week to announce their latest policy decisions) will be focused on the latest developments in inflation, which for March saw some significant set-backs in the move towards their 2% targets.
In China, regulators have been trying to curb speculation by tightening rules on leverage trading. Chinese markets have dropped significantly in recent days as a result.
At the same time, Emerging Market corporate debt in $US continues to pile up, which leaves another set of global economic vulnerabilities if interest rates rise and economic growth falters:
There is plenty of risk still to monitor and equity market prices that remain approximately 20% above their 10 year averages.
We shall discuss all of this and lots of other global economic, financial market and wealth management issues with our clients on our weekly webinar tomorrow. You can tune in to the recorded version at this link: High Rock Private Client Weekly Webinar at or about 5pm tomorrow.
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist