On Monday 6 May, a sell-off in Chinese stock market was triggered by two Tweets posted by Trump, who threatened that the US will impose an immediate tariff on Chinese goods as punitive measures. Shanghai Composite Index dropped 6.56% during Monday, the steepest fall in over three years.
On Wednesday 8 May, Iran announced that it had suspended two commitments in JCPOA, breaking its agreement to restrict the enrichment of uranium, which can be used for making nuclear weapons. This move was considered a response to the US decision to remove the wavier on Iranian oil sanction.
On Thursday 9 May, another round of US-China trade talks started in Washington. After the first meeting, the US announced an increase in tariffs from 10% to 25% on $200bn worth of Chinese exports to the US, impacting over 5,700 product categories. The tariff took effect at midnight Thursday. China responded stating that “necessary countermeasures” will be taken.
On Friday, the Q1 GDP estimates of the UK economy was released, showing an economic expansion of 0.5% for the first three months of 2019, improved from 0.2% growth in Q4 2018.
UK unemployment rate will be released on Tuesday 14 May and is expected at 3.9%.
Eurozone GDP growth will be released on Wednesday May 15, at an expected growth rate of 1.2% YoY.
-1.0 A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.
0.0 A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.
+1.0 A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.
*as at latest realignment 30/04/19
The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.