Asset Allocation Outlook May
April was a fairly calm month for financial markets. Equities climbed higher against a background of strong economic data and exceedingly robust earnings growth, with the S&P500 noting a new record high. Following the rapid increases of the preceding months, yields on US 10-year government bonds fell slightly, while those of their UK counterparts were in fact up slightly. Within commodities the oil price rose further, but what stood out most were the sharply higher prices of copper and the recovery in the gold price. Investors continue to focus on the risk of higher inflation, as well as capacity problems in the logistics chain and the manufacturing of microchips. We believe that, for the time being, strong economic growth and robust earnings growth are more than compensating for such concerns and therefore continue to be positive about equities.