Asset Allocation for August 2017

Favorable macro fundamentals and strong corporate earnings season in US took S&P500 to fresh heights in July.

World economy showed uptrend performance. PMI’s in US and EU came to 53 and 57 points respectively, raw materials prices hike supported world inflation growth and IMF improved global economy growth forecast thanks to China and EU.

In addition Greece succeeded in raising money in the Eurobonds market and grains high volume harvest in Latin America supported Brazil and Argentina economies.

Corporate earnings season in US has been going well. Financial results for 1H2017 exceed analysts’ forecasts in EPS and revenue as well.

Among negative aspects the American dollar continued its swooping on currency market. Investors don’t believe in strong dollar any more as White House changes officials every week, more and more investigations open against Donald Trump about his ties with Russia or new geopolitical tensions are at hand in Asia.

Threat and challenges in world markets:
- Qatar crisis – escalation in Persian Gulf
- Monetary policy tightening by US FED
- Growing tensions between USA and North Korea

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