Weekly market commentary

Market review

It’s been a strong week for equity and bond markets, as positive comments from the US about their willingness to enter negotiations with China, in a bid to mitigate the effective trade embargo between the two economic powerhouses, has buoyed investor sentiment. This came as a welcome boost after a tough start to the week, with equity markets falling on Donald Trump challenging the independence of the Federal Reserve. The US President suggested he would look to fire Chairman Jerome Powell for not lowering interest rates quickly enough, before retracting that statement entirely as if he’d never mentioned it! 

The US President also said that he plans to be “very nice” to China in trade talks, which was supported by comments from Treasury Secretary Scott Bessent, who told an investor summit that the tariff stand-off with China is unsustainable and that he expects the situation to de-escalate, with the 3rd quarter of the year touted as an expected timeline for some form of resolution. However, the response from the Chinese authorities suggested that no talks were in place and no progress was being made on a deal, before demanding that the US revoke all unilateral tariffs currently in situ. 

The International Monetary Fund (IMF) met this week to provide its forecasts on the global macro landscape – painting a damning picture of the effects that global tariffs will have; with 0.5% cut from global growth in 2025 and US inflation expected to increase to 3%. The IMF put the chances of a US recession at 40%. Conversely, Bank of England policymaker Megan Greene was quoted this week as saying that the tariff impacts to the UK economy could in fact be disinflationary, due to the diversion of cheap Asian exports, a weaker US dollar and the softening of demand from slower growth. 

It was a big week for US earnings, with Tesla and Alphabet (Google) being the standout names in a list of 124 companies reporting. Alphabet’s earnings were strong, driven by its advertising search business. Despite Tesla reporting very poor revenue and operating income for Q1, their share price was up +4.6% on the announcement that CEO Elon Musk would be significantly cutting back on his government work to focus on Tesla, while he also flagged ambitious plans for the robotics and autonomous vehicles business.

Outlook

The economic environment has been resilient so far. The brief 90 day pause in targeted tariff implementation may give world leaders & policy makers temporary respite, despite broad 10% tariffs already being in effect. We expect markets to remain volatile as countries now pivot their efforts to negotiate with the US. The multi-asset portfolios are globally diversified investing across equities, fixed income and other asset classes, including Real Estate and Alternatives. Within equities regional differentiation may continue to be an important theme and aid in risk management during uncertainty.

Movers table