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Equity Quarterly Market review – Q1 2019

06744 CC Trader Talk V2

US equities rebounded from a weak end to 2018 to post significant gains in Q1. January was especially strong, as the Federal Reserve confirmed it would adjust planned interest rate hikes to compensate for deteriorating economic momentum and the US government shutdown ended.

The IT sector having suffered a difficult Q4 performed especially well. Healthcare generated more muted gains due to uncertainty over potential regulatory changes. Gains in financials were also hindered by the Fed’s comments on rate trajectory.

Eurozone equities enjoyed strong gains in the first quarter, rebounding from weakness at the end of 2018. Stock markets were supported by central banks stepping away from tighter monetary policy. The European Central Bank said rates would remain at current levels at least until the end of the year. Previously it had said rates would stay on hold until the end of this summer.

Economically-sensitive areas of the market such as industrials and information technology performed well, but the safe haven consumer staples and real estate sectors were also among the top performers. Banks initially drew support from reports of a new ECB programme to support lending; however, the details released in March disappointed some in the market, while ongoing low interest rates may continue to erode net interest margins.

UK equities rallied over the period in line with global equities, with almost all areas of the market bouncing back from a very poor Q4 2018. Against an increasingly uncertain outlook for the global economy, equities perceived to offer superior and defensible earnings growth outperformed. This was reflected in the strong relative performance of the UK’s (albeit relatively small) technology sector and select consumer goods companies, including the large-cap tobacco and beverage groups.

Asia ex Japan equities rebounded strongly from the sell-off in the previous quarter. The MSCI Asia ex Japan index posted double-digit gains though it slightly underperformed the MSCI World index. All markets in the region closed higher, helped in part by progress in US-China trade negotiations. The dovish shift by major central banks also boosted sentiment.

Some Stocks we like for Q2 2019


Airbus is a European aerospace corporation, registered in the Netherlands and trading shares in France, Germany and Spain. It designs, manufactures and sells civil and military aerospace products worldwide and manufactures in the European Union and various other countries. The company has three divisions: Commercial Aircraft, Defence and Space, and Helicopters, the third being the largest in its industry in terms of revenues and turbine helicopter deliveries.


ASML is a Dutch company and currently the largest supplier in the world of photolithography systems for the semiconductor industry. The company manufactures machines for the production of integrated circuits (ICs), such as CPUs, DRAM memory, flash memory. The company is a component of the Euro Stoxx 50 stock market index.


Kering S.A. is an international luxury group based in Paris, France. It owns luxury goods brands, including Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Bottega Veneta, Boucheron and Brioni, Pomellato.


AXA is a French multinational insurance firm headquartered in Paris and engages in global insurance, investment management, and other financial services.

The AXA Group operates primarily in Western Europe, North America, the Asia Pacific region, and the Middle East, with a presence also in Africa. AXA is a conglomerate of independently run businesses, operated according to the laws and regulations of many different countries. The company is a component of the Euro Stoxx 50 stock market index.


Alibaba Group is a global leader in online and mobile commerce. The company and its related companies operate leading wholesale and retail online market places as well as businesses in cloud computing, digital media and entertainment, innovation initiatives and others. Some major businesses of the company include Alibaba Cloud, AliExpress, Alibaba.com, and Alimama.

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