Category: Market Update
Market Update: Markets bask in the sunshine
Sunshine and all-time highs last week. US stocks started their 4th of July holiday in fine spirits. Encouragingly, smaller and mid-cap American companies have outperformed the ‘Magnificent Seven’ tech stocks over the last fortnight, and were buoyed again by Thursday’s strong jobs market report. It got lost in all the negative coverage of UK politics and bond troubles but, remarkably, our equity market set a new all-time high too.
Market Update: Markets recalibrate to Trump 2.0
What a week. No sooner had the US shocked the world by bombing Iran’s nuclear facilities than President Trump declared a ceasefire and subsequent end of the Israel-Iran war. More astonishing still was that the Israeli and Iranian governments obeyed, albeit only after their strikes made ‘the Donald’ lose his rag in the most unpresidential manner the White House lawn has ever witnessed in public.
Market Update: The risks are real – but priced in
We have, unsurprisingly, had a bit of a down week. The Israel-Iran war has pushed up oil prices about 4%, with a slight knock to equities. The ‘safe haven’ dollar has risen but only slightly, up 0.5% against a stable sterling. None of these moves were too sharp – barring perhaps oil’s gain – and it is fair to say that the market reaction has been more muted than the human one. Experience of the Russia-Ukraine should caution us against thinking this will be over quick or that markets will be insulated, but it does seem like many of the...
Market Update: Calm but not comfortable
Last week’s political events did not disturb markets until Israel’s military action on Iran on Friday morning. Even then, the reactions were relatively muted. In the days prior, Brent crude oil rose from $66 per barrel to $70 but other markets showed no discernible price reaction. Investors seem to be waiting for the actual event before deciding to move, as many past rumours have been nothing more, while much else can happen while one waits.
Market Update: Summer starts with less spring
Last week, a number of the world’s stock markets edged closer to all-time highs. Thursday’s Musk-Trump spat weighed on Tesla shares, though, and therefore the US’ S&P 500 (and the ‘Magnificent Seven’ tech stocks in particular). Fortunately, other than entertaining the general public and knocking Tesla’s share price, there seems to be limited investment impact.
Market Update: Complacency or checks and balances?
Last week’s pullback proved to be just a blip in the impressive stock market recovery. On tariffs, markets were buoyed in the early part of the week by the notion of the so-called “TACO trade” (Trump Always Chickens Out) and then, on Thursday, the US Court of International Trade’s ruling that the tariffs already imposed were illegal – though an appeals court quickly suspended the decision, allowing tariffs in the meantime. The trade court’s ruling made markets happy but Trump angry, as did the TACO epithet.
Market Update: Return of the bond vigilantes
After weeks of unimpeded recovery, last week’s pull back in global stock prices was probably to be expected. The story that Trump is back on the tariff war-path with the EU, planning to impose 50% levies (possibly before the “90-day” deadline) has pushed all developed markets as we write. After the period of playing nice, many investors expected some nastiness so the shock will be limited, and seen as a negotiating tactic. This story will unfold over the coming days.
Market Update: A rally that requires belief
A good week for US stocks has erased the year’s losses in dollar terms (in sterling terms, they are mildly negative). The tech-heavy NASDAQ index is officially in a bullish trend – passing the 20% up mark from April’s trough. The recovery from last month’s “Liberation Day” sell-off has been extraordinary for most major equity regions, many of whom are still beating the US year-to-date.
Market Update: Markets calm but trouble still bubbles
Despite the India-Pakistan hostilities, markets remained calm this week. Measured price volatility came down substantially although, due to global economic uncertainty, implied future volatility – the cost of insuring your assets against sudden losses – is still relatively high. But investors seem to feel that US trade wars will be sufficiently resolved and growth will resume.
Market Update: No news is good news…
It starts as a pretty good week for global markets. That is despite dire US GDP figures, mixed earnings reports from the biggest US tech companies and, for us, disappointing news that a US-UK trade deal is unlikely to come soon. Investors feel positive because they think the White House chaos has abated, and Trump might now support growth rather than hinder it.
Market Update: Markets Bounce
Capital markets bounced last week and the mood notably improved. Media commentary put this down to Donald Trump’s softer rhetoric on Chinese tariffs, and his affirmation of the US central bank’s (the Federal Reserve’s) independence. Equities and bonds were positively impacted, not just in the US but across developed markets.
Market Update: Volatility drops but uncertainty remains
We head into the long Easter weekend with calmer markets than a week ago – but without any strong rebound. Time off from the tariff drama has helped the mood and eased last week’s liquidity concerns, but there still is not much to get excited about. Better than expected profits from microchip manufacturer TSMC boosted tech stocks, though that was counterbalanced by the earlier news that the US will effectively ban sales of Nvidia’s H20 chips to China.
Market Update: Ceasefire, not truce, in global trade war
After a week of eye-watering ups and downs, stock markets are roughly where they started but still well below where they were before Trump’s April 2nd ‘Liberation Day’. For bond holders, it has been equally volatile but prices are more than slightly down.
Market Update: Trump’s Liberation Day turns into market clear out
Donald Trump’s tariffs upset markets, which were unprepared for their magnitude. The US imposed a 10% tariff on most imports, and additional “reciprocal” tariffs on major trading partners. Unsurprisingly, this was followed by China’s 34% retaliatory tariff this morning. Global stocks sold off, as investors digest the prospect of a full-blown global trade war. Sharply lower bond yields reflect markets’ downgraded global growth expectations. Just like past growth scares, these are trying times for investors, but we must stay level-headed. Markets often overcorrect to shocks and, as a result, the ensuing recovery is often swift. If you sell risk assets...
Market Update: Tariff ‘stick’ to be followed by ‘fiscal’ carrot?
As most of us are aware, markets have recently been taking one step forward, one step back and this week was no different. Equity markets started with a bit of positivity amid talk that Trump’s April 2nd tariff “Liberation Day” was going to be calibrated and phased. Trump’s unexpected announcement on Thursday of permanent 25% tariffs on autos together with threats of further tariffs should trading partners counter them with retaliatory measures, was directly at odds with the markets’ latest expectations, and so down things came.
Market Update: Bracing for tariff “Liberation Day”
Capital markets were calmer for most of the week, with a little turbulence into the end. Up until Thursday close, stock prices moved higher and measures of intraday volatility fell somewhat, largely thanks to fewer signs of policy upheaval from the US government. The week’s biggest policy event – a meeting of the US Federal Reserve – gave little information that we did not already know or expect. American investors took this as a decent sign and, for the first time in a few weeks, the US was one of the better performers.
Market Update: The return of regional divergence
Once again, the aggregate picture hides a great deal of variation. US stocks have had another down week, while European stocks – mainly defence companies – have performed well, alongside Chinese shares. The background to this was an historic increase in European defence spending, sharply higher bond yields, and continued political volatility from the Trump administration. We are in a period of deep uncertainty – where the market outlook can turn rapidly. In this environment, holding diversified investments is proving crucial once again.
Market Update: Honeymoon ends early
There was no meaningful recovery for US stocks last week, following their cold shower last Friday. By contrast, Europe actually managed to warm a little through last week. Investors’ shift away from the US continues, and markets are no longer enamoured by Donald Trump. We can be pretty confident that the president will react to this, but how – and what effect that might have on global investments – is not clear.
Market Update: Global politics turn business
We start the week on a slightly downbeat note, not borne out of the astounding shifts in US foreign policy, but because US domestic service sector sentiment seems to have sagged. The US 10-year bond yield has dropped back to below 4.5% after a midweek push to 4.6%...
Market Update: Europe First?
Another dramatic week in global politics had rare and fascinating effects on capital markets. The Trump administration’s apparent plan to negotiate a Ukraine peace deal without European input, but leave European nations to foot the bill and bear the political consequences, is considered a nightmare scenario by many politicians on the continent. And yet, European stocks rallied while the US faltered. For the first time in a while, global investors seem more positive about equities outside the world’s largest economy – including booming Chinese tech stocks – than in it.