To put events of last few days into perspective, for the year to date the S&P 500 is now down 1%. but when compared to the highs of January has clearly come off. 

In 2017 we saw improved economic and earnings growth, across the world, but we didn't see any particularly problematic signs of inflation. There has been some strength in commodity prices, but other than that inflation has remained subdued.

The US Fed has continued to raise rates and in 2018 we are going to approach the end of the period when central banks expand their balance sheets. European Central Bank (ECB) net buying is likely to be complete by the end of this year.  And the US Fed is running down their balance sheet slowly.

In our view, overall, we've got a better fundamental economic and earnings picture which should be supportive of international equities, boosted by US Fiscal policy including tax cuts. Of course, we are going to have to pay a higher price for those better fundamentals.


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