Please see below, Brooks Macdonald’s Daily Investment Bulletin which summarises the key issues currently affecting global investment markets. Received today – 23/04/2025
What has happened?
The last 24-hours has seen more Trump-news whiplash for markets, with the latest turn of events signalling a possible easing in US-China tensions as well as (after the US close yesterday) some relief for US Federal Reserve watchers. The better tariff hopes pushed the US S&P500 equity index up +2.51%, its strongest day’s performance in two weeks, and unwinding the previous day’s falls in the process. Over in Europe, given markets were closed on Monday, not having to claw back a previous day’s losses meant the gains yesterday were a bit more muted, with the pan-European STOXX600 equity index up +0.25% and the FTSE100 up +0.64%, all in local currency price return terms. Also notable yesterday was US megacap technology stock Tesla shares which rose in after-hours trading despite weaker results after its CEO Musk said he would step back “significantly” from the US Department of Government Efficiency.
Trump administration eases US-China tariff worries
There were welcome signs of an easing in tensions coming out from the US Trump administration yesterday. In a JPMorgan-hosted closed event on the sidelines of the IMF (International Monetary Fund) meetings in Washington DC yesterday, according to sources in the room, US Treasury Secretary Scott Bessent said that of the US and China, “neither side thinks the status quo [on the current tariff rates] is sustainable”. Following that, US President Trump separately said that he didn’t see the need to “play hardball” with China and planned to be “very nice”, adding that tariffs could drop “substantially, but it won’t be zero” if the two countries can reach a deal.
An independent Fed after all
After the past weekend’s headlines that suggested Trump was seeking to find ways to remove US Federal Reserve (Fed) Chair Jerome Powell from office (before Powell’s term is set to end next year, May 2026), yesterday was another welcome walk-back from US President Trump. Taking questions from the press yesterday, Trump said that he had no intention of firing Powell despite his frustration with the central bank not moving more quickly to cut interest rates: “Never did,” Trump told reporters yesterday, adding that “the press runs away with things. No, I have no intention of firing him, [but] I would like to see him be a little more active in terms of his idea to lower interest rates.”
What does Brooks Macdonald think?
It is hard to keep up with the almost daily U-turns in policy and views coming out from the US Trump administration at the moment – not surprisingly, markets are on edge and volatility is high. But making knee-jerk investment decisions in the heat of the moment, which can carry far-reaching longer-term performance consequences, is rarely a good idea. Instead, our focus continues to be on keeping a balanced and diversified approach, aiming to position our asset allocation choices to weather economic uncertainties effectively, and focused on a long-term investment strategy that is adaptable yet grounded in sound principles, aiming to position portfolios to effectively navigate the economic uncertainties that lie ahead.
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Alex Kitteringham
23rd April 2025