Earlier this week, we experienced a degree of buoyancy across equity markets which has given a much-needed fillip to investors. Trump has come under pressure to temper his rhetoric after pressure was exerted by the US business community and there were indications that the tariff war with China was looking less attritional. Instead, the focus seems to have switched back to Ukraine, and it’s Zelensky’s turn to be in the spotlight once again.
The question in most investors’ minds is, can this rally last?
There are clearly concerns about the economy and hence Trump’s verbal attack on the Federal Reserve (Fed) Chairman, Jerome Powell. The markets didn’t like this conflict and reacted accordingly. Earlier this week, Trump rowed back on his damnation and stated that he didn’t want Powell to leave his post after all.
Trump dominating the headlines is becoming very tiresome, but he’s difficult to ignore and whilst such uncertainty exists, it’s very difficult to see a clear pathway ahead. Eventually, the mist will clear, as will the turbulence, but quite what the landscape will look like remains to be seen.
Companies want to make profits, as do investors, and central banks and governments want stability. There are a lot of people with vested interests in creating a healthy business and economic environment. It will happen, we just don’t know when.
On this week’s agenda:
- Trump’s cabinet and advisers move markets
- Trump told to back off
- Trump’s attacks on Powell threaten the Treasury market
- Can the markets stage a sustainable rally?
- The only sale where there isn’t a queue
- Summary
Trump’s cabinet and advisers move markets
Take a look at this graph below, which appeared in an article from Bloomberg, and it leaves one in no doubt how things have changed since Trump came back on the scene.
In the article, Marko Papic, BCA Research Chief Strategist, said, “Markets are basically trading off tweets”.
The references to Lutnick, Bessant and Navarro are all people in Trump’s inner circle.
Continues…
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