Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.
What has happened
May has got off to a good start for markets. Yesterday saw key equity indices extend their run of back-to-back daily gains, in part down to strong US megacap tech earnings from Microsoft and Meta the day before. While the latest tech results overnight from Amazon and Apple were a bit more mixed, this morning the broader risk-on mood has had a shot in the arm after China said it is evaluating trade talks with the US, with Asian equity markets reacting positively. Finally, in focus later today will be US ‘non-farm payrolls’ jobs data for April where markets are looking for an unchanged +4.2% unemployment rate.
Possible thawing in China-US trade tensions
Earlier today, China’s Commerce Ministry said in a statement that it had noted that “the US has recently sent messages to China through relevant parties, hoping to start talks with China” and that “China is currently evaluating this”. In terms of possible next steps, and as a condition to negotiations, the statement asked to the US to “show its sincerity and be prepared to correct its wrong practices” by scrapping the current reciprocal tariffs.
Key equity indices extend their run of gains
The US S&P500 equity index was up +0.63% yesterday, extending its run of gains to 8 days in a row – that is the longest winning streak since August last year, and leaves the index “only” -1.18% below its 2 April close after which US President Trump’s ‘Liberation Day’ tariffs were announced. Elsewhere, the pan-European STOXX600 and UK FTSE100 equity indices just managed to eke out by the thinnest of margins, another day’s gain (both edging higher by +0.02%). It was marginal though – for example, while the FTSE100 notched up a 14th daily gain in a row, a joint record since the index was formed back in 1984, looking at different indices, the MSCI UK equity index (owing to a different constituent index composition), was actually marginally down on the day. All in local currency, price return terms.
What does Brooks Macdonald think
This morning’s statement from China signals the strongest indication yet that the trade tariff stalemate between the world’s two-biggest economies could get resolved. For context, the positive reaction in markets this morning comes against US-China tariff rates on both sides that are so high currently that they effectively amount to a trade embargo in all but name. It is still very early days, and there are thorny trade issues for both sides to address, but China’s apparent willingness to enter trade negotiations is in itself welcome news.
Please check in again with us soon for further relevant content and market news.
Chloe
02/05/2025