This period spans the year-end and the major international equity markets have all improved further by around 3%, though Japanese stocks stand-out with a near 6% gain.

The ‘reflation’ or ‘rotation to value’ trade has gained momentum with strength in the Consumer Discretionary, Energy, Financial, Industrial and Mining sectors v. dull performance from the Consumer Staples, Pharmaceuticals and Telco sectors.

Consumer Discretionary featured strength in Panasonic (reports that Tesla is buying batteries from them), and further gains for Sony and, still in Japan, Toyota Motor jumped 10% after positive reports on its latest hydrogen-powered car. Honda Motor went against the trend with a 6% fall. And then there was Tesla, which entered the S&P 500 Index during the period, and continues to defy gravity, gaining a further 33% over this period. The oil production companies were led higher again by Exxon and BP, both ahead by around 13% in the wake of a further recovery in the oil price.

The financial sectors were all ahead, led by a leap in the US banks. Goldman Sachs rose by more than a quarter as expectations rose for its trading results in the wake of capital markets strength, Citigroup and Morgan Stanley were close behind. Industrials were generally a good market, in Switzerland, ABB moved up 12% while in France, Saint-Gobain rose 10% after posting estimate-topping Q4 sales and Schneider Electric by a similar amount. US industrials saw a 10% gain for Caterpillar and 14% for Johnson Controls, after settling a Wisconsin class action lawsuit. The Mining & Materials sectors featured a near 30% jump in Dupont, largely on cyclical recommendations for the new year and further gains for the mining companies.

Consumer Staples stocks were close to universally dull, Coca-Cola sank 6% after a number of recommendation downgrades, PepsiCo was down 3% in sympathy. The only real positive feature came from Japan, where the convenience store operator Seven and i Holdings rose 14%. A shade unfortunately, the two really weak features in Pharmaceuticals were Pfizer and AstraZeneca; Pfizer slipped after vague concerns over allergic reactions to their vaccine and worries about dry-ice supplies, AstraZeneca is still suffering the backwash from their bid for Alexion Pharmaceuticals. Elsewhere, the sector was taking on a better tone with a recovery in Bayer and gains for Bristol Myers, Johnson & Johnson and Roche.

Technology presented quite a mixed picture. The move in Samsung Electronics gathered pace with their stock up by more than a quarter over this period, while Intel managed a 5% recovery, they have just announced a series of new processors, hoping to halt their decline. Microsoft was flat while Alphabet and Amazon both weakened (the latter two not strictly ‘tech’ stocks, but…), Apple gained with the overall market.

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