After a very challenging end to 2018, January saw a strong relief rally in markets, as major equity indices rallied high single digits globally, despite a relatively mixed economic backdrop.
In the U.K., Brexit continues to dominate local political and economic debates. With around two months to go until the deadline for the U.K. to leave the European Union, there is little clarity around what the roadmap looks like, particularly in light of PM Theresa May’s recent plan being voted down in Parliament.
Notably, markets seemed to ignore the partial U.S. government shutdown that was in effect for much of January and instead focused on a more cautious tone from the Federal Reserve, as it related to additional interest rate hikes in 2019, which sparked the rally in risk markets and eased market concerns around a more aggressive path to rate hikes
Congressional leaders in the U.S. agreed to a temporary agreement to fund the government through February 15th, and despite the possibility of another shutdown, many market observers have shrugged off the possibility of a repeat scenario
Similarly, though rhetoric has cooled between the U.S. and China and there are still significant economic challenges created by the continuing trade war between the two nations, markets have been very forgiving to start the year.
January 2019 Model Portfolio Returns
Source: Reuters Eikon as of January 31 2019. Please note that performance shown are for Wahed model portfolios. Actual client performance will depend on the timing of funding and intra-quarter drift from targets. Past performance is not indicative of future results
Please note that the content of this article may not be applicable to all jurisdictions Wahed is live in.