Japan has also continued to shine... The huge QE that continues to drive the economy seems to be having an effect as currency remains weaker and lower oil prices are expected to boost Japan’s profitability.
In contrast, the US has had a poor six months. The strong dollar, high market valuations and below-expectations economic data led investors to steer clear of the US market and favour the relatively cheaper Europe and Japanese markets. Concerns over if, and when, the US Federal Reserve will raise interest rates have continued to weigh on the region, as have corporate profits which have come in below expectations.
The surprise that caught out many investors has been the strength of the Chinese stockmarket. While the economy is growing at a slower rate and struggles to adjust to a consumer-based market, its stockmarket has been performing well. Valuations were low and there was an opportunity for the country to re-rate.
In all of this, the UK ploughed on. At the start of the year the country was focused on the tightest run election in history, the result of which came as a surprise to many and has, even in the short term, barely left a mark on the performance of the stockmarket.”
