In April, the UK and EU agreed a six-month extension to the Brexit process and the new deadline for leaving the EU was officially set for 31 October. But, there’s still a possibility for an agreement to be made and executed before then.
Economic data released in April showed that the UK has continued to perform well, particularly the labour market with unemployment declining to 3.9% - the lowest since 1975. Also reflecting a continued labour market tightening was the highest wage growth since June 2008 at 3.5%. Retail sales (excluding volatile fuel) also increased at the second fastest rate since 2004, although Brexit uncertainty continues to cast shadow over this positive economic situation.
The US also saw a firmer labour market, with monthly unemployment figures falling to 3.6% in April from 3.8% the previous month. This was the lowest rate since 1969. The impact of this was tempered by weaker than expected wage growth at 3.2% year on year. With moderate economic growth, and still nonthreatening inflation, this (for now) reinforces the continuation of the aptly named Goldilocks economy, as the environment are not too hot (strong) and not too cold (weak).
The Eurozone economic picture continues to show contrasting fortunes. The manufacturing sector, Germany in particular, continues to weaken. But, the service sector, a much larger economic contributor, remains robust. This is undoubtedly providing a supportive environment, helping drive unemployment to the lowest level since 2008 at 7.7%.
April was another good month for shares, with major stock markets producing positive returns. Stock markets were generally supported by continued labour market strength and a lack of concern about future inflationary pressures driving interest rate higher. Japanese shares led the way, ending the month notably strong (+4.97%) as did Europe (+4.48%) with both regions’ export sensitive stocks boosted by stronger Chinese economic data. US markets had an encouraging month (+4.05%), with many of the large tech companies providing strong earnings reports. The UK’s FTSE 100, despite continued Brexit uncertainty, rose (+2.33%), albeit less than global markets and Emerging Markets were up (+2.45%). Not doing as well in April was Alphabet, Google’s parent company, as they posted weaker revenue than anticipated driving the stock to its largest one-day decline (-7.50%) since 2012.
Not much changed with the British Pound’s performance against major global currencies. The Pound rose against the Japanese Yen (+0.48%) and was essentially flat against the US Dollar (-0.02%), and the Euro (-0.01%).
Investment type performance breakdown
Performance among the investment types in your Plan throughout April was mostly positive, with shares up (+3.27%), global property and commodities both fell (-1.22%), and bonds also finished the month down (-0.68%).
Summary with Plan details
April’s Plans were mixed. Our lowest risk Investment Plan that hold a greater amount of bonds finished the month slightly lower. But all of our other Investment Plans with a higher proportion of shares and commodities, ended the month in positive figures.
Our Investment Team always remain focused on keeping your Investment Plan on track and will be ready to act as opportunities arise.
The figures shown are based on a medium-risk (Confident) investment Plan.
Please remember the value of your investments can go down as well as up, and you could get back less than invested. Past performance is not a reliable indicator of future returns.