Eyes Wide Open

Dear Client

We at Just Service Global ensure we give regular market updates to all those holding financial products from a range of companies to ensure they are always well informed on both the investment markets as well as the status of their holdings in savings, investment or pension products.

We are currently in uncharted territory within the investment markets of the world. Whilst by every historic measure, markets are overpriced and too high, there are very strong stories for some sectors, in particular technology and healthcare.

With the exception of financial products where you invest on a regular basis and where you have a time horizon of over five years - we now advise every client of the Just Service Global Group (includes all advisory firms within our network) to complete the attached risk profile (see below and attached) and send it back to your adviser. We can then ensure that your current risk profile matches whatever financial products you hold. 

If you have completed or otherwise updated your risk profile in recent months and please ask your adviser to once again check your savings/investment/pension portfolios are consistent with your latest risk profile.

We ask you to forward the completed questionnaire to your adviser or to admin@justserviceglobal.com

This risk profile questionnaire serves as a discussion basis between you and your Financial Adviser on setting investment objective(s) and either, selecting investment product(s) appropriate for you, or reviewing your existing savings, investment or pension portfolios. It is considered as a reference when you make an investment decision. It is recommended that you fully understand the risks associated with individual investments before making any investment decisions. You should not purchase an investment product unless you understand it and it has been explained to you how it is suitable to you. The final decision is yours.

Market Commentary Mid September 2020

Monthly asset allocation September 2020:

Source: Pictet Asset Management

Our business cycle scores offer some grounds for optimism – brighter prospects for the developed economies have enabled us to upgrade the outlook for the world as a whole to neutral from marginally negative. One key positive development has been Europe’s newly agreed EUR750 billion recovery fund. Encouragingly, 70 per cent of it is expected to be spent over the next two years. China remains ahead in terms of the extent of its recovery, which, along with a weaker dollar, should be supportive for emerging markets and for the materials sector. Whether the vantage point is the economy, the political landscape or Covid-19, Europe appears to be in better shape than the US. Which is why we retain an overweight position in European stocks. EU member states’ endorsement of the Franco-German led EUR750 billion recovery fund last month and the ECB’s continued monetary stimulus put the European economy on a much firmer footing; we have consequently raised our forecast for the region’s GDP growth for 2021 by 1 percentage point to 7 per cent. Crucially for investors, Europe’s stock markets do not yet discount the region’s improving economic prospects. Particularly when compared to their US counterparts.  US stocks are already very expensive in any case. For US equities to maintain their current price-earnings multiple of around 24, corporate profit margins would have to remain stable. That is a stretch, particularly when factoring in the US’s continued failure to contain Covid-19, the growing regulatory backlash against Silicon Valley and uncertainty surrounding the outcome of the November Presidential election. Mindful of these risks, we remain neutral US stocks. With an increase in consumer spending a feature of the recovery taking hold in parts of the world, we are attracted to consumer staples stocks.  To maintain a defensive tilt in our equity allocation, we have reduced our weighting in financials to underweight. Although banks’ bad debt provisions resulting from pandemic-induced lockdowns have been largely in line with expectations, they remain acutely vulnerable to any setback to the smooth reopening of economies. Moreover, dividend payments are unlikely to recover for the foreseeable future. Regulators across the world– including the ECB, the Fed and the UK’s Prudential Regulatory Authority – have moved aggressively to either cap bank dividend payments or temporarily suspend them. This greatly reduces the investment appeal of financial stocks. As always, if you would like more information please contact your adviser within the Just Service Global network. For all enquiries email info@justserviceglobal.com

Regards

The Just Service Client Service Team

All content provided is for informational purposes only. Just Service makes no representations as to the accuracy or completeness of any information contained or found by following any link. Just Service will not be liable for any errors or omissions in this information nor the availability of it. Just Service will not be liable for any losses, injuries, or damages from the display or use of this information. This policy is subject to change at any time.

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Reasons to be cheerful and fearful: Cautious optimism is the way forward

Investment Market update to Friday 21st August:

(Source: Dominion Funds)

Equity markets last week continued their upward trend, with the Nasdaq powering ahead to new all-time highs and the S&P 500 showing solid gains. Economic data continuing to suggest a bounce back in major economies from lockdown lows, supportive monetary and fiscal policy and continued progress on developing treatments and vaccines for COVID-19, are all supporting the positive sentiment in equity markets. There is a growing feeling that we are past the worst of this crisis. Evidence indicates that COVID-19 spreads seasonally, indicating that Northern Hemisphere countries (the bulk of the world economy) could face a ‘second wave’ in the winter. Despite great strides being made in fighting the pandemic, we are still some way off beating this disease. This risk remains high and something that should temper investor optimism. An economic bounce-back… of sorts: what is the data saying? US retail sales were up 1.2%, month-on-month (MoM) in July, missing the market’s expectation for an increase of 1.9%. However, retail figures for both June and July were up 1.9% year-on-year (YoY). This marks three straight months of improvement for US retail, and the emergence of a more normalised picture. Meanwhile, the University of Michigan’s Consumer Sentiment Index edged up to 72.8 in August 2020 from 72.5 in July, narrowly beating estimates of 72. In other US data, industrial production rose 3% MoM in July. This followed a 5.7% rise in June and was in-line with expectations. Manufacturing output rose 3.4%, beating forecasts, with the largest gain coming from motor vehicles and parts, which increased by 28.3%. Building permits jumped 18.8% in July to a seasonally adjusted rate of almost 1.5 million – well above expectations and the highest since January. The Eurozone’s trade surplus widened to €21 billion in June – much more than the market was expecting – but imports and exports both dropped (by 12.2% and 10%, respectively). While it looks like the worst is behind us in Europe, there is still no sign of a spectacular turnaround. However, the Bundesbank suggests that we will see a rapid and broad-based recovery in the German economy this year, as lockdown restrictions have been lifted. In China, recent data has been mixed. The country’s retail trade declined by 1.1% YoY in July – the seventh straight month of contraction. On the other hand, Chinese industrial output rose by 4.8% in July, while average new home prices rose at the slowest pace since May 2018 (4.8%) and real estate investments increased. China’s recovery is moving forward – and this is a clear and encouraging trend – but it’s not moving as fast as some commentators predicted.    As always talk to your adviser within the Just Service network if you would like information or otherwise review your savings, investment or pension plans. For all enquiries email info@justserviceglobal.com

Regards

The Just Service Client Service Team

All content provided is for informational purposes only. Just Service makes no representations as to the accuracy or completeness of any information contained or found by following any link. Just Service will not be liable for any errors or omissions in this information nor the availability of it. Just Service will not be liable for any losses, injuries, or damages from the display or use of this information. This policy is subject to change at any time.

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