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The unpredictability of the US President means that taking a view on the near-term prospects for asset valuations in the main global stock markets is a mug’s game, but there are some aspects now worthy of note (in no particular order):

• Elon Musk is slowly being pushed out of influence in the administration and sucked back into paying attention to his business interests.
• It is widely accepted that the US has lost the game of brinkmanship with China and whatever is touted as the next stage by the President’s amusingly loyal (or plain stupid) media relations team, it is China that will expecting the US to come calling.
• The Russians have accepted that they have no hope of overrunning Ukraine and serious economic damage is now beginning to tell at home, so they are, I am sure, looking for a peace deal that they can claim is a victory. I doubt that they will get to keep even all the land they currently hold, but I would expect meaningful peace talks sooner than could have been expected until recently. I should say that where I live, there remains strong opinion that Putin will still look at other targets for restoring the glory of the USSR.
• The markets in the USA, both equity and fixed income, plus the value of the US Dollar relative to the global currency mix, vary pretty much directly in line with the Truth Social posts of Agent Orange. Actually, that is not strictly true: markets go down as a rule when he posts and go up when he says nothing. Posts equals bad, silence equals good! Trump playing golf is actually a positive for our personal wealth!
• It is so widely understood, by every rational or intelligent person or organsisation, that the Trump tariffs policy will severly dent global growth and hurt the USA more than any other economy of size, that we can take it as inevitable that the policy will continue to be redrawn, largely eliminated as a universal and crude approach (the Liberation Day chart), and probably refined into focused tariffs and trade deals. That could happen very quickly.

All the above is probably at least a hint that the worst is over, but for obvious reasons, I would not yet be brave enough to to call the bottom of the 2025 markets ‘set back’. Certainly we can deduce that the perception of investors has changed in a way that will establish the next asset allocation cycle. In simple terms, investing anywhere except the USA looks like the easy call for the next 3 years. A new Mag 7 might will be European or Asian!

Trump’s tariff announcement is one of the most significant (if not THE most significant) major political act by a ‘democratic’ leader with global economic consequences that we may ever experience. As a French professor working at Aston University in the UK described the announcement (more or less): “the most economically illiterate speech I have ever heard – full of lies”.

You will see much commentary in the general news media, but I would suggest that the real implications will be easier to see AFTER other countries have reacted and maybe after yet further retaliations from the White House vandal. This is in truth not a policy about global trade, but about raising taxes from anywhere except in the USA to allow the USA to tax its own citizens less. Global bullying and extortion, in short.

No-one will be surprised if global stock markets sell off sharply. The Dollar will likely depreciate too, so not good for UK investors with North American holdings.

I will comment in more detail in a video after a few days gap to allow (I hope) some sort of settled outcome to emerge.

I just took off my Skechers shoes, made in Vietnam and marketed in Europe by a US brand. Already sold at a what is locally a premium price, post tariffs, they likely will not sell at all. What a great opportunity for the Vietnamese to develop their own brands and sell direct into Europe. I already have more than a gut feeling that Trump has pushed Emerging Markets investments right back up to the top of the “Watchlist” selection tree!

The Chinese have been upset about US ‘hegemony’ for years. Trump likely just ended it.

MAGA – make America go away.

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.

A few news items from this week:

Here is some news that will interest those readers who filter their fund selections with sustainability as a key factor. Of course, this is not a recommendation and all the usual research would be sensible if you like the idea. I paste below what was in one of my trade papers and is likely a press release text.

“EdenTree Investment Management’s Global Impact Bond fund has become the first fixed income strategy to publicly disclose it will be adopting the ‘Sustainability Impact’ label under the Financial Conduct Authority’s Sustainability Disclosure Requirements (SDR).

The label will be adopted from 3 February 2025, making the portfolio the third fund in EdenTree’s suite to adopt a label, after the EdenTree Green Future and EdenTree Green Infrastructure mandates recently revealed they will be using the Sustainability Impact label as well. 

This means that EdenTree has now adopted an SDR label across three major asset classes: equities, listed infrastructure and fixed income. “

Here are some thoughts about where we are on getting useful information about funds with sustainability objectives in the UK

https://youtu.be/IuF8sDJ55YU