Spring is just around the corner

With a budget just around the corner, the direction the Trump administration is likely to take still far from clear and more doubt over the Brexit negotiations as the House of Lords debates the Article 50 bill.

It is little wonder shares have failed to make much progress recently. Markets do remain close to all time highs, though, and even the pound has received a fillip from better than expected economic news.

A buoyant January for tax receipts as self assessment payments flowed in, coupled with an encouraging survey from the Confederation of British Industry, have combined to suggest the Budget might not contain too many nasty surprises. Certainly, despite expectations to the contrary, our economy seems in good shape. Indeed, the Bank of England has upped its forecast for growth this year. With inflation also rising, perhaps an interest rate increase could be on the cards for later in the year – something that would also help sterling.

The outlook for investors will depend to some extent on whether the new US President is able to deliver on his promise of economic prosperity. There do seem to be signs of a modest pickup on the global economic front, which is hopeful. Meanwhile, the flow of corporate news continues, which in turn will impinge upon market sentiment, although so far this market driver has not created too many problems.

There have been some disappointments, though. HSBC’s profits slump came as something of a shock to markets. While the write off in its Swiss private banking arm was greater than expected, and the loss on the sale of its Brazilian operations more, sentiment overall was not damaged as much as might have been the case. Even the confirmation that as many as a thousand jobs may have to move to Paris from London made little impact, though it hardly encouraged buyers for the bank’s shares.

But, let’s face it, the outlook appears far less threatening than it did in the immediate aftermath of the referendum vote. Indeed, Kraft’s now aborted approach for Unilever served as a reminder that weaker sterling could make UK companies vulnerable to overseas buyers. With economic activity still fairly robust, a business friendly administration in Washington and a rather better global outlook than had been feared, we could be in for a spring of pleasant surprises.

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