i-Wire: Market Update 14th April

i-Wire: Market Update 14th April Equity markets have recovered strongly in the last two weeks We are concerned that this bounce may be too optimistic and do not think that a floor has yet been established by markets with any level of confidence Economic growth and corporate earnings estimates have been slashed with falls of up to 30% on an annualised basis in both growth and earnings now increasingly being ‘guesstimated’ Government Bond Yields have collapsed and offer minimal value but we see opportunity in investment grade corporate bonds where spreads have widened significantly but default risk should still be low. UK dividends could be cut by up to 40% this year, though this should be seen in the context of very few alternative income sources with interest rates so low. We have been making/advising a number of changes to portfolios to improve their quality and robustness. In this note we will look at How markets have performed during the crisis What next for the markets The longer term outlook for markets UK Dividend cuts What we are doing on portfolios Conclusion These are the strangest days. I’m writing this note on Sunday afternoon, sitting in the sun, accompanied by [...]