D-PIMS Weekly Market Update - Week of 25th November to 2nd December 2019
Today’s Monday Update:
Trade talks between the US and China featured heavily over the last week and now the events in Honk Kong are starting to play an integral part in this long running saga:
• On Monday, after months of sometimes violent unrest in Hong Kong, an election with record turnout handed a big victory for pro-democracy local district council candidates, posing a new conundrum for Beijing and adding pressure on the city’s leader.
A Chinese state-backed tabloid said on Monday that China and the United States were “very close” to an initial trade agreement, adding to optimism from the previous Friday, when the Presidents of both countries reiterated their desire for a deal. These reports prompted European shares to rise for the second straight session, while Louis Vuitton gained after signing a deal to buy U.S. jewellery chain Tiffany.
• Wednesday saw U.S. President Donald Trump sign into law congressional legislation which supported the Hong Kong protesters. This provoked China’s ire, threatening to derail an interim trade deal between Washington and Beijing.
• Following on from this, China warned the United States on Thursday that it would take “firm counter measures” in response to U.S. legislation backing anti-government protesters in Hong Kong, and said attempts to interfere in the Chinese-ruled city were doomed to fail. Markets were understandably unsettled by these developments.
Adding to unsettled sentiment was North Korea, who broke a month long lull in missile tests by firing two short range projectiles off its east coast. The test firing came as the clock ticks down on the year-end deadline that Pyongyang had given the United Stated to show flexibility in their stalled denuclearisation talks.
• Over the week the worlds Stockmarkets were mainly down (in Sterling terms) with UK Markets being the exception. The D-PIMS Portfolios gave a good positive showing over the week, especially the higher risk portfolios.
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The comments made above represent our interpretation of events and market views and are in no way a guarantee of future investment performance.