Adverse political developments in the form of president Trump’s policies and Brexit tempered the “solid gains” made by equity markets.
Even though US equities rallied off the back of Trump’s victory and the UK economy displayed surprising resilience post-Brexit, positive political developments and stronger economic data in Europe gave its equity markets the upper hand.
Gains made in America and Britain also paled in comparison to strides made by emerging markets, which alongside Chinese shares, generated the highest returns of any asset class.
Between the US and the UK, however, Brooks Macdonald held out higher hopes for the Americans over the Brits.
One of the main reasons for this was the disparity in consumer and business investment confidence.
Consumer confidence in the US has surged to a level not seen since 2000, the firm noted, as wage growth accelerates and corporates remain optimistic about Trump’s pro-business agenda.
The UK, on the other hand, generally struggled in the first quarter under the weight of Brexit-related uncertainty.
“Although consumer confidence bounced back in the following months as the UK’s political situation improved, it has declined again as workers are increasingly concerned about job security and consumers are facing higher prices as a result of sterling’s decline,” the investment group said.
