Comment and opinion for retail investors in the UK
The last few weeks have certainly been tumultuous in terms of utterances from the USA’s leadership and global reaction to that.
One thing that I have noticed is that the announcements from the Trump camp seem to have achieved something quite unexpected (although perhaps not so surprising with hindsight). There has been a complete rotation, still ongoing, in investors’ valuations of global stock markets by region. Look at this data:
A discussion with a subscriber recently prompted me to think that investors ought to be thinking now about the real long-term implications of the release into general use of what is loosely called generative AI – software like Chat GPT, Apple Intelligence, Gemini and DeepSeek.
The shorthand AI is actually unhelpful because the word intelligence has always been the subject of controversy and debate and even Wikipedia’s opening lines under the heading of Intelligence point out that the definition is wide and has for over a century been a subject of professional debate amongst psychologists rather than philologists.
I hope readers are not expecting me to know what portfolio revisions are appropriate now that Donald Trump and Elon Musk are running the USA. As I am sure everyone is aware, their actions are so unpredictable that knowing what bizarre or potentially hugely consequential announcement, threat, cancellation of action, or other disruption of global norms are coming from the dynamic duo is quite impossible.
Perhaps the only conclusion I have come to is more from philosophy than economics, which is that what we are experiencing is not in itself unusual, just that the Western world has had a break from these sort of behaviours for a few decades.