Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.
What has happened
One-day equity market performance was largely flat to small down yesterday, though a bright spot was US megacap tech stock NVIDIA which notched up a fresh all-time record high. For the most part though, despite Middle East risk moving into the rear-view mirror, investors appeared to be having a hard time finding new reasons to buy stocks. One benefit of the smaller moves yesterday was the market’s “fear-gauge” VIX volatility index (which reflects option-pricing derived annualised 30-day forward-looking implied volatility of the US S&P500 equity index) – that closed on Wednesday at a 4-month low of 16.76 index points – for context, the longer-term VIX average sits at just under 20.
Tax cuts and tariffs centre stage again
With the Israel-Iran ceasefire continuing to hold, markets are focusing back on other things near-term, and top of the list are tax cuts and tariffs. First up, is US President Trump’s tax and spending cut bill currently working its way through Congress, which Trump is pushing to get signed before the 4 July US holiday. Second, the 90-day reciprocal trade tariff pause that Trump put in place back in April with most countries apart from China is due to end on 9 July, less than two weeks away now – Trump’s National Economic Council director, Kevin Hassett, said earlier this week that “we’re very close to a few countries and are waiting to announce after we get [Trump’s tax and spending cut] Big Beautiful Bill closed”.
A new Fed Chair in the wings?
The Wall Street Journal reported yesterday that US President Trump might announce US Federal Reserve (Fed) Chair Jerome Powell’s replacement by September or October this year. If that proves to be the case, it would mark an unusually early appointment (Powell’s term doesn’t end until May next year). Adding to the rumour mill, Trump said yesterday that he had 3 or 4 people in mind as potential replacements.
What does Brooks Macdonald think
US President Trump has made no secret of his desire to see US interest rates lower, characterising Fed Chair Powell as “Too Late Powell”. The risk of an early announcement, however, is that it could effectively create a shadow Fed chair with the power to influence market sentiment and undermine Powell’s authority. Further, just because US interest rates could be cut more easily under a new Trump-friendly Fed chair, it doesn’t necessarily follow that bond markets would play ball, especially in terms of longer-term bond yield interest rates which the Fed has much less control over.
Please check in again with us soon for further relevant content and market news.
Chloe
26/06/2025