Newsletter dated January 26, 2017

Newsletter dated January 26, 2017

Global equities gained around the world. The Dow Jones Industrial Average topped 20,000 for the first time. Strong corporate earnings fueled investor optimism in economic growth.


Investors are also encouraged by early indications of U.S. President Donald Trump’s pro-growth policies including possible infrastructure projects, approving two oil pipelines and pushing American carmakers to building plants in the U.S. He promised a “very major” border tax, signed an executive orders to withdraw the U.S. from the Trans-Pacific Partnership trade deal and announced he’d seek to renegotiate the North American Free Trade Agreement.


The U.K. economy grew faster than economists forecast in the fourth quarter, continuing to defy expectations that the Brexit vote would derail the expansion. Prime Minister Theresa May plans to start formal talks on leaving the EU by the end of March. She has indicated that she wants to withdraw from the bloc’s single market for goods and services, an outcome that economists say will hurt trade. However, the Supreme Court has ruled that parliament must give its consent before the government can trigger article 50 and formally initiate Brexit. This allows for some extra time and influence to the rather pro-EU MPs.


Erwin Lasshofer and his INNOVATIS team see some pick-up in global economic growth. We also see some populistic and protectionistic dynamics that might attract followers and imitators. This supports inflation and (in a healthy economic environment) should lead to higher interest rates. We expect no straight way there and a recovery of volatility.

























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