Syrian missile strike shakes markets
The decision by Trump to carry out the air strike raises questions about his wider foreign policy intentions. He has previously signalled a desire to pull out of conflicts in the middle east.
However, market fears subsided quickly, and turned their attention to the US economy. At first glance the US employment report appeared disappointing falling far short of expectations.
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Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 12 Apr 17
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The decision by Trump to carry out the air strike raises questions about his wider foreign policy intentions. He has previously signalled a desire to pull out of conflicts in the middle east.
However, market fears subsided quickly, and turned their attention to the US economy. At first glance the US employment report appeared disappointing falling far short of expectations.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
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However, market fears subsided quickly, and turned their attention to the US economy. At first glance the US employment report appeared disappointing falling far short of expectations.
Personally, I am not too concerned about the health of the US labour market. Employment gains in recent months have been strong due to unusually mild weather. Temperatures have now normalised and snowstorms hit parts of the US. A pullback in the number employed was not a disaster.
Further, the employment report showed that the US jobless rate has edged down to 4.5 per cent. This is the lowest level in almost 10 years and it is now below what is considered full employment in the US.
I believe a US interest rate rise remains on the table for June even with the weaker than expected jobs report.
Interestingly, US stock funds experienced their largest withdrawals in more than 18 months as investors extended their rotation into cheaper valued European equities.
Investors have embraced Europe’s growth prospects, as well as the lower stock valuations. They are also looking past risks posed by the French elections and Brexit.
Surprisingly, in an increasing interest rate environment, investors are still investing into global bond funds.
The Syrian missile strikes also had an impact on the oil market last week, with OIL jumping as investors worried about supply disruptions.
During the last couple of weeks, oil prices have been rebounding after slumping by about 10 per cent at the start of March. The earlier weakness was driven by investor concerns that the OPEC deal to cut production would not be enough to bring oil inventories back down to their five-year average.
Economic news out of China and Europe has helped boost estimates for growth in oil demand this year. In my view, strong growth in demand should rebalance the market. The risk is that US shale production continues to grow strongly due to higher prices and increases supply faster than demand.