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Improving mood versus slowing growth Capital markets bounced last week, supposedly because of Trump backing down on Chinese tariffs and Federal Reserve independence. We should be careful about these rationalisations. Greater liquidity led to a better mood in stocks and bonds, and...

Volatility drops but uncertainty remains Markets were calmer last week but there was no strong rebound. Falling government bond yields were welcome, after the previous week’s spike in US treasury yields. It now looks like markets once again see tariffs primarily as...

Ceasefire, not truce, in global trade war Last week had eye-watering ups and downs. US bond yields spiked, prompting Donald Trump to pause his “reciprocal” tariffs for 90 days on all countries except China, which faces a whopping 145% – although somewhat...

Trump’s Liberation Day turns into market routDonald Trump’s tariffs upset markets unprepared for their magnitude. The shockingly high “reciprocal” tariffs aren’t a response to “Tariffs charged to the U.S.A” as claimed, but a calculation based on regional trade deficits. This widely panned...

Tariff ‘stick’ to be followed by fiscal ‘carrot’?Markets have been fluctuating, initially with some positivity due to Trump’s planned phased and toned down tariff “Liberation Day” announcement. However, Trump’s unexpected permanent 25% tariffs on autos and threats of further tariffs swiftly reversed...

Bracing for tariff “Liberation Day” Capital markets were calmer last week. We said before that US investor sentiment had swung too far and could bounce back – and so it proved. This was helped by the Federal Reserve holding interest rates steady...

Just another growth scare, or more?The stock market sell-off has resumed and US equities are officially in correction (-10%). US inflation was lower than expected, which usually pushes down bond yields, but the opposite happened – demonstrating that capital is flowing out...

The return of regional divergence US stocks fell once again last week, while European and Chinese shares did well. The background to this was a spike in European bond yields and more political uncertainty from the Trump administration. European stocks jumped on...

Honeymoon ends early No meaningful recovery for US stocks last week – but a slight warming for European shares. Encouragingly, Keir Starmer’s charm offensive resulted in President Trump saying “tariffs wouldn’t be necessary” for the UK – but Emmanuel Macron’s earlier experience...

Global politics turn businessCapital markets ended last week on a slightly downbeat note. That was more about the US economy than its astounding shift in foreign policy – but here everyone is focussed on Donald Trump’s recasting of Russia as an ally...

Europe First? A dramatic week in global politics ended with Chinese and European stocks outperforming the US, the dollar falling back and gold prices soaring. This unusual constellation of trends points to economic sentiment re-evaluation – and perhaps declining confidence in in...

Up and down and on and off The week began with, potentially, a very distasteful pill to swallow. Trump announced another 10% of tariffs on China and new 25% tariffs on Mexico and Canada, the US’ closest and single largest trading partners....

Capital markets were a sea of green in Donald Trump’s first week back. US investors like his tax cut, deregulation agenda, but we have argued they might be underestimating the risks. Britons and Europeans might be biased though – as one survey...

Global stocks bounced back 2% last week and bond markets calmed. UK investors did not even have to rely on a weak pound to boost sterling-based returns. UK government bonds recovered from the previous sell-off, as we cover below. Lower-than-expected inflation data...

UK bond yield surge – more than meets the eye Bond markets took centre stage again last week. Globally, yields went up thanks to US economic strength – but UK media focussed on UK bond turmoil, as yields spiked more sharply than...

December’s market-moving events – most notably the Fed telling markets ‘bah humbug’ – didn’t spoil 2024’s year-long party in US equities; they just stopped it a little early. Investors have grown extremely confident about US growth since Trump’s election win, expecting tax...

Fed spoils the Christmas partyInvestors weren’t expecting the Federal Reserve’s hawkish forward guidance adjustment (fewer interest rate cuts to be expected in 2025) and sold off sharply on the news. That is a big change from last year’s unstoppable ‘Santa Rally’, but...

The Tatton Outlook 2025 – Overview Donald Trump is the ‘known unknown’ for 2025, and the range of possible market outcomes is wide. Markets are predicting US outperformance, thanks to pro-growth domestic policies and anti-global trade policies. Economists are less certain. ‘America...

Focus turns to Europe Global equity markets gained about 1% but, despite Europe’s political turbulence, both French and German equity markets are beating most of the rest; Sterling has gained against most currencies. Bonds marked time ahead of central bank rate decisions...

Equities and bonds go separate ways Markets tend to be quiet on the USA’s thanksgiving but, beforehand, trading was a little frenetic last week. French politics hurt its stocks, while Trump tariffs hurt emerging markets. Japanese stocks were volatile – and moved...