Knowledge and Insight - Economy

Since our last video, all markets have cared about is trade policy. But there is much more to investing than that: here we explain why it’s so important to keep focussed on the long-term resilience of the markets. Before we get to that, it’s worth noting there has been a small de-escalation of the trade war.

Watch Ed's video update below.

Markets are tumbling fast in response to US tariffs that will upend global trade. Perhaps more dangerous than the policy itself is just how silly it makes the administration look.

Stock markets have reacted badly to the worse than expected news on US trade policy. We favour a more conservative asset allocation in response – but it’s possible to be too gloomy.

The US government plans to slap tariffs on virtually all imports to the US as part of ‘Liberation Day’. The details are yet to be revealed, but the most immediate effect is already apparent: higher prices.

When it comes to managing wealth, there is a big difference between the concepts of “risk” and “uncertainty”. Risk is deemed to be quantifiable in some way, allowing managers to construct portfolios with the right balance between assets and the right mix within those asset classes. At least then we might have some idea of the potential gains and losses to which clients are exposed.

The government is poised to cut public spending. Will its Spring Forecast also tinker with taxes and borrowing? If so, UK government bonds could bear the brunt.

After a good start to the year, an onslaught of policy announcements from the White House has since sent US equities into retreat. But falls of this magnitude are a normal part of investing, and the importance of politicians shouldn’t be overrated.

Watch Ed's video update below.

American stocks have taken a jolt downward, rattled by an escalating trade war and an unpredictable President. It’s not a time to panic. 

American threats to hit Europe with tariffs and abandon NATO have may have spurred the EU to loosen the purse strings and invest heavily in infrastructure and its own defence. Continental stocks are rising rapidly in anticipation of a sea change for Europe.

Seismic geopolitical changes are wrenching the post-war global order, straining the transatlantic partnership and upending supply chains. Investors are recalculating furiously, putting financial markets in flux as well.

The anticipation of Trump 2.0 has driven stock market excitement and household confidence in the months since his election. Now he’s in office, is the reality starting to subdue that optimism? 

Gold hit an all-time high last week, just in time for Valentine’s Day. But it’s not lovers who are doing all the buying.