Asset Allocation for May 2017

In April investors kept an eye on the elections in France where pro-European candidate Emmanuel Macron has reached a confident victory over radical Marie Le Pen.

The results of the first tour of French elections showed the leading position of Macron over Le Pen before the second round of elections in early May. Investors finally realized that geopolitical risks in Europe whittle. It is a good sign for EUR to grow up in mid-term future.

Corporate earnings season in US showed strong performance. “New economy” companies are showing revenue and profit growth that moves their shares higher and higher away. We see only one essential investment risk in US and it is Donald Trump’s ability to implement promised reforms. We recommend picking up stocks very thoroughly at current level as the potential growth of traditional economy companies is restricted.

Threat and challenges in world markets:
-  BREXIT aftermath – EU disruption and political crisis
-  Monetary policy tightening by US FED

Read more