Analytics, Banks, Financial Services, Latvia

Start of the year was successful for American companies. S&P 500 companies delivered the best quarterly earnings growth since 2011 year. The earnings grew in all sectors except telecommunications. The biggest contributor was energy sector that recovered from previous year slump. Nevertheless, stock valuations are still significantly above historical averages. 

“April was characterized by a steady development of financial markets. Gradual FED’s monetary policy normalization, Trump heading for big struggle on reforms, quarterly corporate financial reports and fresh economic data failed to stir up financial markets”, say the RAM experts. 

“Oil prices declined as raising crude oil stock and production in the U.S. has soured investors’ sentiment. Moreover, slowdown in construction activity in China and disappointing Trump’s performance influenced industrial metals prospects. In the short-term commodities demand is tightly connected with developments in China”, note Rietumu Group specialists. 

“Despite geopolitical risks weighting on the world, stock market got close to the historically low volatility level at the end of April. If low volatility and raising corporate earnings prevail in the next quarters, high stock valuations will normalize. However, it seems that many investors undervalue possibility of a shock. As a result, the future may bring a wider spectrum of attractive investment opportunities”, finalized the experts. 

The overview of RAM and relevant commentaries of experts can be found here. 

Rietumu Asset Management (RAM) is part of Rietumu Bank, the leading private bank in Latvia. The company provides professional asset management services. RAM’s products and services are intended for a wide range of investors and are designed to meet the specific demands and needs of each customer. In the current market conditions, RAM’s specialists offer their customers the ability to reach an effective yield to risk ratio.