Asset Allocation for February 2018

Uptrend acceleration in stock prices in January has surprised many experts. But the earnings season was not so perfect in US as it seemed to be.

In January traders stirred up buying power of tech and financial companies. Tech stocks grew on strong quarterly reports projections while banks shares showed gains on FED tightening monetary policy in 2018-2019 YY. Unfortunately the facts haven’t justified investors’ expectations: tech companies released weak financial statements and aggressive estimates of FED rate hikes in coming years caused a sharp drop in US treasuries.

Commodities showed a strong month. Weak dollar allowed gold, copper and oil prices to reach triennial heights.

REITs, utilities and energy stocks were among the worst performers in January as they always react badly on treasuries’ yields growth.

Threat and challenges in world markets:
- Monetary policy tightening by US FED
- Mifid II implementation by European banks

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