Its Not Harry

Comment and opinion for retail investors in the UK

Politics

YAP – False optimism?

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Markets in the developed world seems to have taken the announced pause on the Liberation Day tariffs as suggesting that the more market friendly component of Trump’s acolytes has got the upper hand and the pro-tariff lobby has been banished to the broom cupboard (to paraphrase the FT).

I think it is perfectly normal for markets to react positively to good news, even if it is only a deferment of bad news. However, such rallies usually end when the researchers and strategists get round to looking at what risks still remain. And there is a really big one, one that is more a dinosaur than an elephant in the room.

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Deep Dive – May 2025

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Trump 2 – 100 days and a little more clarity

I would not normally expect to be writing this monthly piece as an ongoing running commentary on a single macro economic factor, but the impact of Trump’s presidency on the global economy and investment markets and therefore on our personal wealth is so dramatic and directly relevant that I expect that you would welcome a reasoned opinion on the implications of where we are now, just over 3 months into this global (insert expletive of your choice here).

After the first false dawn, when markets (especially in the USA) were assuming that reduced regulation and a more business climate friendly environment would allow already over valued equities to continue marching upwards, the reality of tariffs calculated by a methodology that was so primitive it was genuinely beyond belief, flip flopping on that and all the rest you know about, has all served to create a climate of uncertainty and what’s more, direct and immediate practical consequences including a supply shock for goods coming out of China. Trump’s 100 day speech, reported the day I publish this article, is said to be full of falsehoods and more of the same bombast.

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Deep Dive – April 2025

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Trump 2 – what we know so far and the implications for investors

My more diligent subscribers may have noticed a pause in my Your Attention Please (YAP) posts which was partly because I was on holiday (in England) for a week and partly because the current situation demands a more in-depth commentary.

I would not usually write this monthly longer missive as a commentary on recent market returns or the evolving ‘macro’ background, but my take on the current state of affairs is that the impact of the bizarre behaviour of the incumbent of the White House is so significant in terms of the ongoing assessment of the market valuation of investment assets, that a calm, logical, albeit personally biased review of what has happened so far could be very useful to my readers. I think readers pay me for an opinion and observations, not just to report data!

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YAP – Reaping what they sow

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Yesterday’s big market sell off was hardly a surprise. With an economic incompetent (to put it mildly) and his sycophants interfering big time in global trade and discharging the whole magazine of his revolver into the foot of the USA, it was eventually going to get through to investors, however MAGA they might be, that there coud well be a recession in the USA.

It has become fashionable to suggest that the markets are permanently propped up by the huge sums in index tracking ETFs and funds and also the personal wealth of the billionaire set. A further argument in favour of the market being a one way bet is that asset allocation decisions are more commonly made by algorithms than by humans these days. Those are valid arguments, in my opinion, but they have an extension: when entities (be they people or machines) are in control of very large amounts of money in the equity markets, if they are triggered to a negative inflection point, the sell off will be dramatic.

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