Posts Tagged Global Markets

2025 is proving to be a case study for those who believe time in the market is more important than timing the market.

2025 has been a very noisy year so far. Important news has come thick and fast, be it related to trade tariffs, defence spending, artificial intelligence or other themes.

April 2025 was a historic month for stock markets, which declined rapidly upon President Trump’s announcement of huge international trade tariffs, then rose almost as quickly when he reined back on them.

The mood among institutional investors has deteriorated in recent weeks, due to US-centric concerns. Trade tariffs, sticky inflation and slowing growth are the dominant topics of conversation.

2025 has been a mixed year, so far. The winners of 2023 and 2024 are not currently faring so well, with US stocks lagging behind Europe and the UK as the “Magnificent 7” technology companies decline in value.

A Rollercoaster Start to the Year -
2025 has begun with the market’s focus flipping between different topics at a lightning pace. Firstly, government bond yields spiked higher and created alarm about budget deficits. However, lower inflation data made those fears subside and led to a strong rally...

We are at a point in time where US stocks are dominating all others, in terms of both their outright size and the strength of their returns. In 2024, the MSCI USA index gained 24.6%, almost double the 12.4% return achieved by the rest of the world (MSCI World ex-USA). However, 2025 does bring a mixed outlook for unemployment and inflation, in the US and elsewhere, therefore it will be interesting to see if investment returns can remain so strong in the coming year.

The re-election of Donald Trump to the US Presidency has caused another large rise in US stocks, which were already doing very well. Indeed, his “America first” ideology is reflected in the way US stocks have outperformed others recently.

The cost of borrowing has risen sharply in the past few weeks for the UK and US governments. This has caused stock markets to pause for breath after making strong gains.

Asia remains the centre of attention on the back of a major Chinese stimulus program which has triggered a sharp rally in its stocks. This comes after two months where Japan experienced significant currency volatility and a “flash crash” in its stocks.

2024 has been a very good year for investors so far, with stock markets in the UK, US and Europe all reaching record highs. Signs of weakness have emerged in recent weeks, as companies report their latest earnings: valuations in the US are high and some profit taking has occurred. The UK stock market appears cheaper, with an improving economy to boot. Many investors believe inflation is finally under control.

2024 always promised to be a busy year for elections, with one half of the world’s population heading to the polls. As far as financial markets are concerned, political surprises have now bubbled up in several countries within a short period of time. With much still to be decided by voters, there is greater uncertainty in the short-term investment outlook. However, inflation remains on a declining path in the UK, US and Europe, while economic growth appears strong.