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Markets Uncut

Join Richard Carter, Liz Dhillon and Sebastian Scott as they debate the week ahead for investors and the outlook for oil markets in the wake of Qasem Soleimani’s assassination.

Market overview:
Alan McIntosh, Chief Investment Strategist

Tensions surrounding the assassination of Iranian military commander Qassem Soleimani intensified early last week, with retaliatory missile attacks on two US bases in Iraq. Thankfully, there were no casualties and President Trump downplayed the incident. With further escalation now averted, equity markets recovered and the oil price slipped back. Why the normally blustery US leader seemed so calm remains a bit of a mystery, but putting the US on a war footing in an election year was probably not a good idea.

Geopolitical tensions aside, it is always tempting to start the year by drawing a line in the sand behind the year just finished. However, in reality, what we see is a continuation, not a fresh start. Global interest rates remain low, and are likely to remain accommodative throughout 2020. Economic growth is pedestrian, but positive. This should allow a modest increase in corporate earnings after a year of stagnation. The signing of a Phase 1 trade deal between the US and China should prevent the situation deteriorating further. Stock markets performed extremely well last year and valuations look a lot fuller than they did twelve months ago. This leads us to believe that a modest return profile for investments this year is the most likely outcome.

Written by

Liz Dhillon
Equity Research Analyst
Alan McIntosh
Chief Investment Strategist
Richard Carter
Head of Fixed Interest Research

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