François Rimeu's take on this week's market
01 June 2017
Global market sentiment was balanced last week.
Investors’ focus seems to have shifted from US political uncertainty to strong macroeconomic fundamentals and a more constructive global growth forecast. US equities rallied to a new record high post FOMC minutes, EM markets rebounded strongly despite Moody's downgraded China's credit rating (from Aa3 to A1). Only European markets traded lower and core yields fell slightly.
The main focus this week were the OPEC meeting and the FOMC minutes in US.
As expected, OPEC members had agreed to extend oil production cuts for an additional 9 months through March 2018, but the market seems to be disappointed with oil prices dropping again below 50 USD.
FOMC minutes confirmed that the outlook justifies taking another step quite soon in the tightening of monetary conditions. A June rate hike remains on the table and is largely priced in by the market.
In Europe, all macro data continued to be very robust. PMI surveys indicate that the Eurozone growth remained very strong as Manufacturing PMI rose to 57.0 after reaching 56.7 for the previous month. Furthermore, IFO German business confidence rose to the highest level since 1991.
In the US, economic data published last week was rather mixed. The real estate market remained weak in April as both new home sales and existing home sales surprise significantly to the downside.
Markit flash composite PMI surveys showed few signs of improvement of business activity following the weak start of the year. The index rose for the second month to 53.9 in May.
Finally, US growth for the Q1 was revised upwards. GDP rose at +1.2% annualized rate, revised from +0.7% as consumption and business investment contributed more than expected.
That said, our investment themes are still the same with no significant change in the portfolio.
- La Française Allocation Share Class R
- La Française Allocation Share Class I
- La Française Allocation Share Class S
The information and material provided do not, by any means, represent advice, offers, solicitations or recommendations for investing in specific investments. All statements reflect the opinions of their authors at their publication date and do not constitute a contractual commitment on behalf of the management company. These assessments are subject to change without notice, within the prospectus’ limitations, which is the only legally binding document. La Française Group declines liability in any form for any direct or indirect damage resulting from the use of this publication or the information that it contains. This publication may not be reproduced in full or in part, disseminated or distributed to any third party without the prior written consent of La Française Group.
La Française Allocation is a French UCITS in regards to the 2009/65/CE Directive. The Fund received AMF authorization on July 15th 2003 and was launched on July 31st 2003. The strategy changed as of July 19th 2012. Management company : La Française Asset Management – Paris – approved by the “Autorité des Marchés Financiers” under N GP97076 on July 1st, 1997.
For more information regarding the French regulatory authority - Autorité des Marchés Financiers (AMF) – please visit www.amf-france.org.www.amf-france.org.