- European markets open higher, Japan surges on trade optimism
- US markets stage an intra-day rebound, volatility remains high
- Gold price rise after closing in on a four-week low
- Oil prices find a floor
- How investors should deal with volatility
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Investors are waking up to a positive sight for once, with markets opening higher across a broad range of European indices and the FTSE 100 up 0.9% at the open. However, this should hardly be seen as the end of the trouble, especially with President Trump showing no signs of easing his stance on perceived trade imbalances, having doubled down on China. Still, there is a glimmer of hope, as Japanese markets are up nearly 6% following news that trade talks will begin in a few days. The sooner deals are reached, the quicker companies and investors can gain some clarity on the lay of the land.
Yesterday was a wild ride for US markets, opening sharply down before staging an intra-day recovery, with the tech-heavy Nasdaq closing in the green. Futures indicate a positive open this morning, but volatility remains the only certainty at this point. Company earnings are just around the corner, which may provide a welcome distraction. However, management teams are facing a tough patch, with difficult decisions ahead on how to navigate the tariff storm. Expect a lot of cautiousness, and possibly even a lack of quarterly guidance in some cases, as uncertainty takes centre stage. In times like these, investors are reminded of the importance of diversification and maintaining a long-term perspective.
Gold is back in the good books again, after falling to a near four-week low in what looked like some profit-taking after its recent rally. The underlying demand drivers haven’t gone away, with investors looking to the rare metal as a way to shelter from some of the volatility plaguing equity markets.
Brent oil prices are up nearly 1% in early trading, finding some footing after a three-session selloff that pushed prices to their lowest in nearly four years. Despite some green this morning, downward pressure doesn’t look to be going away anytime soon.
During periods of volatility, it’s essential for investors to stay calm and maintain a focus on long-term goals. Instead of making impulsive decisions, it’s wise to regularly review your portfolio, keeping it well-diversified across various geographies and asset classes to effectively manage risk. History has shown time and again that markets reward those who keep a cool head and think with a long-term horizon, now is no different.“
