Monthly Market Commentary

Wealocity's perspective on market happenings Monthly Commentary Jun '17

Death of Paris Agreement Trump - Promise on track President Trump is on track of fulfilling his campaign promises to his voters. After many protectionist measures, the environment treaty brokered last year is trashed by the new US administration. This despite the developing economies like India, China, etc. are on a rampage to create new capacities in the renewable space. Not all across the US embraced their President's stand and started to do their own legislations in their cities, communities, etc. UK Election Results Dis'May'- Have the Millennials sought their revenge? That seems to be the case as more youth turned out to vote in favour of Corbyn's Labour party. Also, May could've relied on the very pollsters who predicted Bremain possibility as her 20% lead evaporated to a cut of 13 seats and most importantly pitting her into a minority government. For UK, a harsher Brexit could be a reality now. The 'Gulf' around Qatar When everyone thought the POTUS completed his first major tour of nations - the GCC, on a sane note, a major crisis emerged out and all the fingers lead to Trump. Isn't it a coincidence that the Qatar sanctions were announced just as his air force one took off. Rumours have it that Trump gave a thumbs up to stifle and wipe out Qatar, the pain point for Saudis and the new crown prince's plans. It's an irony for Saudis mention terrorism! The current crisis has the potential to spill beyond the region. Are we heading into a Kuwait situation? Interest Rate Divergence As reflation takes a breather, the approach to interest rates seems to diverge across the Atlantic. While the EU and the rest of the world maintain status quo, the US is looking to increase the interest rates. This FOMC meet this month, could sound on those lines. Though, the growth in employment staggered, the wage growth is eluding. Domestically, RBI is at loggerheads with the Finance Ministry though the former is in a wait-and-watch mode with monsoon season approaching and GST implementation as triggers for a rate cut. What's in it for you: Equity: With no major headwinds and continued fund flows, the equity market has not lost its steam. The near term market is still in the bullish phase and investments could be very opportunistic and staggered with a horizon of 3 years.  Debt: The interest rate dilemma hangs on for any directional change in the fixed income space. Small exposures to hybrid debt is recommended with a 3 year horizon. Commodities: As US ditched the Paris agreement, Crude seems to head nowhere despite the production cuts by OPEC, while the US rate hike could further bounce the greenback the safe heaven seems to lose it's sheen further. Copyright © Wealocity, All rights reserved. Our mailing address is: dreams@wealocity.com Disclaimer: All the views expressed are strictly personal and we recommend consulting your financial advisor for making any investment decisions based on your risk appetite, timelines and goals.