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Brooks Macdonald – Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.

What has happened

Markets yesterday proved once again that they are sensitive to the latest twists and turns in tariff news. With US President Trump late in the day yesterday saying that on tariffs he was “always open to talk”, that proved enough for markets in afternoon trading to edge higher. The US S&P500 equity index finished up +0.14% yesterday to close within 0.2% of last week’s record high, while closer to home the UK FTSE100 equity index gained +0.64% to notch up a fresh record high, all in local currency price return terms.

Mixing tariffs and geopolitics

US President Trump arguably broke new ground yesterday, mixing tariffs with geopolitical deadlines. Trump said yesterday that as well as resuming supplies of US-made Patriot air-defence missiles and other weapons to Ukraine, the US would impose “secondary tariffs” of 100% on countries doing business with Russia unless Russia agreed to a ceasefire within 50 days. While thin on details, it appears that the planned action by Trump would effectively represent additional levies on countries (such as India and China) that buy, amongst other things, oil from Russia.

Gauging Trump’s tariff impact

Today provides another opportunity to gauge what impact Trump’s tariffs are having on both the economy and corporate profits. Later today, we get the most recent monthly Consumer Price Index (CPI) reports from the US and Canada, as well as the calendar Q2 corporate earnings results season kicking off led by the biggest US bank JP Morgan’s results (JPM’s numbers are due out before today’s US market open). On the US inflation front specifically, if the US CPI print is higher than expected (Bloomberg’s consensus estimate is for a US annual all-items CPI rate of +2.6% and a core ex energy and food rate of +2.9%), that could derail US Federal Reserve (Fed) interest rate cut hopes – currently markets (implied from US Fed Funds Futures derivative contracts) are pricing in close to two lots of 25-basis-points of interest rate cuts by December.

What does Brooks Macdonald think

US President Trump yesterday showed that that he is willing to broaden his use of tariffs. Up until now, tariffs have been rationalised by Trump as a means to correct perceived trade unfairness and imbalances. Yesterday saw geopolitics added to the mix, with Trump threatening secondary tariffs on countries that buy from Russia. While this might force Russia to the negotiating table, in doing so it might further cement tariffs as a policy tool that Trump can use across a wide range of other policy ambitions that we have yet to see – as such, tariff policies and tariff uncertainty, even if just a negotiating tactic, could be something of a long-term feature of Trump’s presidency that investors will have to get used to.

Please check in again with us soon for further relevant content and market news.

Chloe

15/07/2025

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Brooks Macdonald Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which offers a global market update for your perusal.

What has happened

Markets had a good session yesterday, shrugging off August 1 tariff concerns. A tech-led rally pushed the S&P 500 (+0.61%) and NASDAQ (+0.94%) higher. The German DAX yesterday and the FTSE 100 this morning hit record highs. Notably, Nvidia (+1.80%) briefly topped a $4tn market cap, closing at $3.974tn. With everything else that is happening, AI remains the greatest hope for US exceptionalism to return. Falling bond yields eased fiscal worries, with the 10-year Treasury yield dropping -6.7 basis points after a strong auction, signalling robust investor confidence despite no clear catalyst.

Trump’s tariff developments

Yes, we have more tariff talks yesterday. President Trump unveiled a 50% tariff on copper imports starting 1 August, a big deal for industries relying on this metal. He also announced a 50% tariff on Brazilian goods, up from 10% on Liberation Day, escalating tensions with BRICS nations and weakening the Brazilian Real by -2.29%, its worst drop since early April. The Philippines got a 20% tariff, and other countries face varied rates, as Trump keeps the trade policy plot twisting.

Federal Reserve insights

The Fed’s June minutes, out yesterday, showed a split on policy and tariffs. A couple of officials hinted at a possible rate cut at the 29-30 July FOMC meeting if data supports it, while some see no cuts at all in 2025, noting the federal funds rate may be close to the neutral level. On inflation, some view tariffs as a one-off price bump, but most worry about longer term effects. This division echoes the ‘dot plot’ published last month: 10 of 19 officials expect two or more rate cuts this year, seven see none, and two predict one.

What does Brooks Macdonald think

The Fed meeting on 29-30 July, just before the 1 August tariff deadline, will see policymakers wrestling with trade levy uncertainties and their economic impact. With inflation’s path still unclear, the Fed is likely to hold steady on rates despite pressure from Trump for more aggressive rate cuts. In addition, oral arguments to the Court of Appeals on whether the International Emergency Economic Powers Act authorises the president to impose tariffs will be heard on 31 July, which adds another layer of complexity.

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Chloe

10/07/2025

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Brooks Macdonald Daily Investment Bulletin

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.  

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Chloe

26/06/2025

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Brooks Macdonald Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which provides  a market update for your perusal.

What has happened

A degree of relative calm returned to markets yesterday, as fears of a worst-case Middle East conflagration eased. While Iran and Israel continue to trade attacks, there is a growing view that the latest conflict might yet be contained. Avoiding further escalation, Israel has not targeted Iranian oil production while Iran has not targeted US people or assets in the region – and crucially for the oil price, Iran has as yet shown no interest in blockading the Strait of Hormuz through which close to 30% of the world’s seaborne oil trade goes through.

Signs of Middle East de-escalation?

Rather than ratcheting up, it seems the conflict might even be de-escalating behind the public rhetoric. The Wall Street Journal said yesterday that Iran was signalling it wanted to end hostilities and restart nuclear talks, citing unnamed Middle Eastern and European sources, while a similar report by Reuters said that Iran conveyed that message through Qatar, Saudi Arabia and Oman. Separately, Iranian foreign minister Abbas Araghchi yesterday said that “the Islamic Republic of Iran has never left the negotiating table”. According to US news website Axios, there may be meeting this week between US Middle East envoy Steve Witkoff and the Iranian foreign minister to discuss a nuclear deal and an end to the Israel-Iran conflict.

Markets shift back to risk-on

Global equity markets rose, while US government bond, gold and oil prices all fell back yesterday. The US S&P500 equity index finished yesterday up +0.94%, recouping most of Friday’s -1.13% decline, while the pan-European STOXX600 equity index was up +0.36%, having dropped by -0.89% on Friday. Overnight in Asian equity markets, the Japanese Nikkei225 equity index has closed up +0.59% (all equity indices in local currency price return terms).

What does Brooks Macdonald think

Overnight the Bank of Japan has left interest rates unchanged and announced it is looking the slow the rate at which it reduces its bond purchases next year, both decisions widely expected. On the latter, the Bank is presumably hoping to take some of the heat off Japanese government bond yields which have risen this year. This is all market positive as it reduces the risk of ‘something breaking’, avoiding a redux of the market hiatus last August when the Bank hiked rates unexpectedly.

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Chloe

17/06/2025

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M&G Wealth Weekly Market Commentary

Please see below article received from M&G Wealth yesterday afternoon, which provides an insight into market movements and the broader economic landscape.

This week’s highlights

  • Markets rise despite mixed economic data: stocks and bonds gained over the week.
  • US-China trade talks offer optimism: S&P 500 now up 20% from April lows.
  • Tesla tumbles: a heated exchange between President Trump and Elon Musk unsettled investors.

Market review

Early in the week, US economic reports pointed to challenges in manufacturing and services sectors. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) fell, signalling contraction for the third consecutive month and ISM Services PMI had its first decline in nearly a year.

The US labour market showed mixed signals. Job openings exceeded expectations at 7.4 million. However, a recent employment report showed a slowdown, with only 37,000 new jobs added in May – the lowest since March 2023.

US President Trump and China’s President Xi held a phone conversation aiming to ease tensions. While details on trade negotiations remained unclear, markets responded positively, with the S&P 500 briefly entering a bull market – up 20% from April lows.

However, momentum slowed later in the week following an exchange of sharp words between President Trump and Tesla CEO Elon Musk. Their disagreements ranged from recent spending legislation, past political ties and concerns over government contracts. Tesla shares fell 14.26% on Thursday.

Outlook

The economic environment has been resilient so far. The recent stumbling blocks posed to tariff implementation on the scale initially laid out, have offered a temporary reprieve for world leaders and policymakers. We expect markets to remain volatile as the legality of Trump’s tariffs moves into the spotlight, meaning nations may pause or pivot on their efforts to strike trade deals with the US.

Chart of the week

ECB reduces interest rates The European Central Bank (ECB) has reduced interest rates again, bringing the deposit rate down from 2.25% to 2%. This marks a significant shift, as rates have now been cut by half since their peak in September 2023.

The decision comes in response to declining inflation in the eurozone, which fell to 1.9% last month – below the ECB’s 2% target. Additionally, the central bank adjusted its inflation forecasts, lowering projections for 2025 and 2026 to 2% and 1.6%, respectively.

ECB President Christine Lagarde highlighted concerns about ongoing tariff uncertainty and its potential impact on economic growth, reinforcing the need for rate cuts. However, she also suggested that the ECB is nearing the end of its rate-cutting cycle.

What this means for you

Varying inflation levels and trade tariff uncertainty continues to influence market performance across the globe, strengthening the importance of maintaining a well-diversified long-term investment approach, rather than reacting to short-term market swings. By staying committed to carefully considered plans, investors can navigate through periods of volatility and uncertainty.

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Chloe

10/06/2025

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Brooks Macdonald Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.

What has happened

Markets had a mixed first-trading day of the new month yesterday. The US S&P500 equity index rallied late in the day to finish up +0.41%, as strength in semiconductor stocks led the market higher despite weaker manufacturing survey data. Elsewhere, the pan-European STOXX600 equity index closed marginally lower at -0.14%, closing before that late US intraday rally had kicked in, while Asian equity markets overnight are mostly higher (all in local currency price return terms). Finally – breaking news this morning that the Dutch government has collapsed after the far-right Freedom party quit the governing coalition citing disagreement over migration and border control policy – if a new coalition cannot be formed, it is expected to trigger a snap general election – the timing is unfortunate given the Netherlands is due to host world leaders for a NATO (North Atlantic Treaty Organization) summit later this month.

US manufacturing data underwhelms

The latest US Institute for Supply Management (ISM) manufacturing survey for May was released yesterday. In it, the headline print was 48.5, a six-month low; it was down month-on-month from April’s 48.7, below 49.5 expected, and below the 50-midway point that divides between month-on-month surveyed economic activity contraction versus expansion. Of particular note, within the data, the imports index sub-component fell to 39.9, from 47.1 in April, below its low point during the Covid pandemic and at a level last seen back in May 2009 when the US economy was coming out of the 2008 Global Financial Crisis.

China manufacturing data weaker

Earlier this morning, China has released its own latest manufacturing survey activity data for May. The Caixin/S&P headline print was 48.3, below 50.7 expected, down from 50.4 in April, marking the lowest reading since September 2022, and the first sub-50 reading since September last year. The weaker print in part reflects a drop in the new export orders sub-component, which fell for the second month in a row and was at the lowest level since July 2023.

What does Brooks Macdonald think Tariff uncertainty between the US and China, triggered by US President Trump’s 2 April “Liberation Day” announcement, is already starting to show up in the data – as evidenced by weaker China export and US import data, respectively. Given the recent 90-day pauses in the most extreme parts of Trump’s tariffs, it will be interesting to see whether there might be a subsequent bounce-back in these export and import readings in the coming months. However, it suggests that even if this is the case, there will still be a high level of uncertainty around the range of economic forecasts, and which will likely keep markets on edge for the time being.

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Chloe

03/06/2025

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Tatton Monday Digest – Return of the bond vigilantes

Please see below article received from Tatton Investment Management this morning, which provides a global market update for your perusal.

We probably should have expected some stock market pullback, after weeks of recovery. We certainly should have expected that Trump wasn’t done with tariff threats – his, now delayed until 9 July, 50% EU tariff threat hit markets on Friday – but stocks were falling even before that, thanks to higher government bond yields (resulting from planned US tax cuts and the resulting fiscal instability). 

This has echoes of 2022, when higher yields put a ceiling on equity returns. Our equity valuation model is sensitive to long-term real rates, which are themselves sensitive to measures of government fiscal risk. That risk isn’t just a US problem: deterioration in the world’s largest bond market would push up yields everywhere – much more than the UK’s budget fiasco of 2022. 

Trump’s tax cut plans will reportedly cost $3.3tn in lost revenue over 10 years. Bond buyers hope that tariff revenues will make up much of the shortfall – the inevitable conclusion being that the president can’t afford to lower tariffs any further, which may even explain the EU threat. But lower tariffs are what excited US stock markets over the last month. It’s a rock and hard place: stocks tantrum when tariffs go up; bonds will tantrum if they go down. 

This suggests that US stocks and bonds are competing for the same capital. In the past, capital inflows to the US meant they didn’t have to. But with America’s safe haven status under threat, US underperformance is becoming a trend that will be hard to reverse. Higher bond yields have room to come down, for example, but that requires policy stability – which has already deteriorated. 

We’ve warned before about US companies facing high debt costs, which are increased by higher ‘risk free’ government yields. For mid and large-cap borrowers, this hurts their refinancing costs and stock valuations. This isn’t recession point, but higher bond yields mean the risk isn’t negligible. 

UK inflation unease


UK inflation was 3.5% in April – above expectations and the highest figure since January 2024. Most coverage focussed on tax impacts and Ofgem’s higher energy price cap, but planned one-offs typically don’t raise long-term inflation. More worrying for the Bank of England was surprisingly strong airfares and service prices, suggesting strong consumer demand and wages. They scuppered any remaining hopes of an interest rate cut next month. Even before the report, BoE chief economist Huw Pill argued that rate cuts to now had been too quick. 

April’s surprise challenges our previous hunch that UK inflation would be weak, but the underlying numbers aren’t as clear cut. Core goods came in below forecast, for example, while the BoE’s own measure of service prices decelerated from March. Opinions on where UK inflation will be at the end of 2025 are mixed, and it’s worth bearing in mind that, prior to last month, UK price levels were growing at a similar rate to Europe and below the US. Bearing in mind one-offs and seasonal factors (like financial year-end rises indexed to past inflation) we would expect inflation to fall in the near-term. 

Bond markets are unsure how much it could fall, though, which is why long-term government bonds sold off and, hence, yields rose sharply. But UK yields are still closely correlated with the US and the difference between the two is narrower than two months ago. Basically, the inflation surprise forced a bond adjustment, but not a panic. 

We should also remember that inflation and growth are two sides of the same coin – and Britain’s stronger-than-expected Q1 growth would have contributed to price rises, particularly for wage-sensitive services. That’s why UK stocks didn’t move much in response. Even if inflation means higher than expected rates and yields, the resulting growth should support profits. 

UK-EU trade deal a positive for investment


Economically, both the benefits and concessions of Britain’s “reset” deal with the EU have been overstated by politicians. Fisheries are a tiny fraction of the UK economy so, in pure trade terms, the agriculture and energy benefits outweigh the cost of giving Europeans access to our waters. But the long-term economic benefit is still miniscule compared to the estimated costs of Brexit – which is why both sides painted the deal as a starting point, rather than job done. 

The real prize for the UK would be the ability to sell financial services into the EU – and Europe would benefit too. The UK has a highly developed capital markets framework, which the EU lacks. Both regions suffer from underinvestment problems: Europeans save too much, while UK investors – particularly pension funds – simply don’t buy enough UK stocks. This is arguably one of the reasons the UK and Europe have underperformed the US for so long. 

The UK is trying to address this problem with its “Mansion House Accord”, through which pension providers agreed to invest £50bn in UK businesses. There are rumours of something similar in the EU.

British and European regulators would do well to act now – as both regions have benefitted from Trump-spooked investors moving money out of the US this year. Those flows have already dried up somewhat, after the US president backed down on tariffs. If policymakers want the short-term investment flows to turn into something more, structural changes are needed. 
Not only would this boost stock values, it would mean more money for smaller riskier ventures. That means investment in innovation, like AI. Indeed, the US’ strong investment impulse is one of the reasons for its economic and financial outperformance. In a Trump-shocked world, we suspect Britain and Europe’s political will to make these structural changes will be strong. 

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Chloe

27/05/2025

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Brooks Macdonald Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.

What has happened

US megacap technology shares had another good day yesterday. Nvidia was up +4.16%, pushing the ‘Magnificent Seven’ technology group of companies’ share prices (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla), up +1.75%. Elsewhere however, there was some investor buying fatigue creeping into markets after the rally over the past few weeks, with the equal-market-capitalisation-weighted version of the US S&P500 equity index down -0.62%. Over in Europe, without megacap tech to fall back on, the pan-European STOXX600 equity index was down -0.24%, while overnight Asian equity markets are a touch lower also (all in local currency price return terms).

UK economy stronger than expected in Q1

UK Gross Domestic Product (GDP) data for calendar Q1 is out this morning – the data shows the UK economy has been doing better than expected, growing at +0.7% in Q1 2025 versus Q4 2024. That is an acceleration from the +0.1% GDP growth rate in Q4 2024 versus Q3 2024 and was above forecasts looking for +0.6% in Q1 2025. Furthermore Q1 2025 was the strongest quarter-on-quarter growth rate since Q1 2024. That said, keep in mind that while GDP numbers are always backward-looking, perhaps this is even more the case currently given how US President Trump’s 2 April tariffs are reshaping the global economy more broadly.

Middle East geopolitics

There are news reports overnight that Iran is willing to sign an agreement around concessions for its plans for making nuclear weapons in return for a lifting of US economic sanctions. Specifically, Ali Shamkhani (an adviser to Iranian Supreme Leader Ayatollah Ali Khamenei) has confirmed that Iran would conditionally agree to limit future uranium enrichment to lower (sub-weapons grade) levels consistent with civilian energy generation use. That better geopolitical outlook is helping to push back on Brent crude oil prices, down -3% today currently at around US$64 per barrel – for context, those oil prices are well off their $80+ per barrel 2025-year-to-date highs back in January (as an aside, as we have written about before in our Daily Investment Bulletins, keep in mind that lower oil prices, if sustained, can have a material dampening impact on any inflation pressures elsewhere).

What does Brooks Macdonald think

This morning’s UK GDP data is more difficult than usual to extrapolate. Aside Trump’s 2 April tariff plans where the recent UK-US trade deal leaves 10% universal tariffs largely in place, the domestic UK economic picture is somewhat tougher now given the hike in employer National Insurance costs that came into effect last month. The Bank of England’s latest economic projections arguably reflect that picture, with UK GDP growth expected to effectively stall in calendar Q2, with an estimated growth rate of just +0.1%.

Please check in again with us soon for further relevant content and market news.

Chloe

15/05/2025

Team No Comments

Brooks Macdonald Daily Investment Bulletin

Please see below article received from Brooks Macdonald this morning, which provides a global market update for your perusal.

What has happened

The past 24-hours have seen more tariff trade war swings for investor sentiment. On the positives, it was confirmed late yesterday that US Treasury Secretary Bessent and US Trade Representative Greer will be heading tomorrow to Switzerland to hold trade talks with China’s Vice Premier He – that and separately, US President Trump yesterday promised an announcement that will be “as big as it gets” later this week, while Bessent said some “very good” offers had been made in trade negotiations by other countries. On the negatives, there are reports that the European Union (EU) are making detailed plans to hit US goods with tariffs if US-EU trade talks fail, while Trump yesterday said that “We don’t have to sign deals, they have to sign deals with us. They want a piece of our market. We don’t want a piece of their market.”

Oil prices

Oil price weakness has been something of a theme so far this year, notwithstanding a small bounce this week, in part as tariff-led economic growth fears have risen. Adding to downside risks, the Organization of the Petroleum Exporting Countries (OPEC) plus certain non-OPEC members including Russia (OPEC+) in their latest meeting last weekend agreed to accelerate oil production hikes. These increases in supply are designed to ultimately unwind post-COVID production curbs that were put in place to protect prices, but which have cost OPEC+ producers global market share. However, OPEC+’s latest production hike raises concern that such additional supply could lead to a global glut just as a global tariff trade war threatens broader economic growth.

China cuts a key policy interest rate

China’s central bank, the People’s Bank of China (PBOC) earlier today announced that it will be cutting a key policy interest rate, its 7-day reverse repurchase agreement (reverse repo) rate to 1.4% from 1.5% as well as separately lowering the reserve requirement ratio for banks. The measures announced should guide borrowing costs from the banks lower and release some extra monetary liquidity into the economy. This is because by cutting the reverse repo rate, the PBOC can boost monetary liquidity by making it less attractive for banks to deposit excess funds with the central bank – as a result, this encourages banks to instead lend more of those excess funds into the economy, increasing the overall money supply and promoting economic growth.

What does Brooks Macdonald think

Oil price weakness so far this year might be unwelcome news for energy producers, but it might be much better news for central banks. Oil prices can at times be a significant swing factor for the broader inflation outlook. At a time when tariff trade wars are risking higher price pressures as a result of increased trade friction in international trade, lower oil prices might help to keep a lid on inflation, and in turn might offer central banks some room for manoeuvre in being able to cut rates should economic growth falter.

Please check in again with us soon for further relevant content and market news.

Chloe

07/05/2025

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Brooks Macdonald Daily Investment Bulletin

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