F&C's Paul Niven: The main risk to equity markets this year

Stretched valuations

The exceptional return from global equities in 2017 was accompanied by an unusual sense of calm in markets.

In mid-January 2018, the S&P 500 had enjoyed the longest period without a correction of 5% or more since records began in 1957.  Since then, we have seen an equity correction of a little over 10%. The most widely followed measure of market volatility, the VIX, spiked dramatically during the correction and although it has fallen since and equities are above their lows, volatility remains elevated. President Trump's announcement of 25% tariffs on imported steel and 10% on aluminium have added to nervousness, not because their macro effects are likely to be substantial, but on fears that...