Monthly Investment Review
Equity markets overall were flat again in April with a stronger euro currency negating local gains in a number of markets.
The US market treaded water as investors closely watched the new US administration’s attempts to push ahead with policy action, especially in relation to proposed corporation tax cuts. Strategists have yet to revise up earnings per share (eps) estimates for the US market on the back the proposed cuts.
European equities made good gains, especially France, supported by stronger economic data, a good earnings results season and the reduction of political risk following the first round of the French presidential election, with the French National Front Party losing momentum. Equities remain well valued on a relative basis compared to bonds and cash, although they have become more expensive on an absolute (P/E ratio) basis. Eurozone government bonds offer little long term value and have come under some pressure in the last nine months.
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