Thomas Miller Investment: View from the Front - 1st April

Front and centre of our thoughts this week include

Welcome to April Fools' Day where, at least in the recent past, truth has felt stranger than fiction. After an incredibly strong first quarter of 2019 for asset prices, we also wish a warm welcome to Q2 where markets have already got off to a strong start. Statistics show that Q4 of 2018 was the worst quarter for equity markets in seven years, fast forward to the next quarter to Q1 of 2019 and we arrive at what was the best quarter for equity markets in seven years. To describe this part of the economic cycle as volatile would be an understatement. It also shows the huge importance of looking through the short-term noise in markets as part of the investment decision-making process. Now back to our regular scheduling.

The start of a new month brings a slew of April PMI data which helps to understand the short-term views of business, both manufacturing and non-manufacturing. Over the weekend we saw the release in China which was far stronger than expected, this after a period in which Chinese data had begun to materially weaken. The forward-looking sub components of both the manufacturing and non-manufacturing indices rose to their highest levels in six months, a sign that some of the fiscal stimulus from earlier in the year is starting to have a positive impact.

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Jordan Sriharan

Head of Collectives Research and Senior Portfolio Manager