Investors see healthy gains:
October has long been known as a challenging month in markets, mainly because it is the month that delivered some of history’s biggest crashes:
While October’s reputation for volatility is well known, the reality is that over the past 50 years, it actually tends to be one of the better months for equity returns. If we look at the US market, the average return in October is up just less than 1% which is stronger than September (usually negative) and not far off April or November — which are often the best months. (Source: Y Charts November 2025). Some investors think of October as the inflection point in the market year – the moment when we shake off the last of the summer glow and look ahead to the “Santa Rally.”
This year we saw a continuation of the cautious optimism that had begun to build in September, as global equities advanced on the back of easing inflation pressures, interest rate cuts, and another broadly positive corporate earnings season. Investor sentiment improved, but not without restraint – persistent geopolitical tensions, political uncertainty, and ongoing trade disputes kept volatility in play and reminded markets that the path forward remains uneven.
Source: Bloomberg
In the US, equities extended their winning streak, led once again by the technology-heavy Nasdaq, which climbed 6.7% in euro terms. The “Magnificent Seven” mega-cap stocks were at the forefront, delivering robust earnings that reassured investors about the resilience of U.S. corporate profitability. The broader S&P 500 followed suit, with a strong 4.3% gain.
Asian and emerging market equities also enjoyed a strong October, extending the positive momentum seen in recent month with gains of approximately 6%, reflecting a renewed sense of optimism across developing economies. China delivered modest gains, with the real growth coming from India and broader Emerging Asia – where markets were buoyed by a weaker U.S. dollar, positive trade talks between US and China, and an uptick in investor confidence.
Japan was another bright spot, with equities rallying strongly as the Nikkei reached a new record high. The appointment of Sanae Takaichi (known as “the Iron Lady” – yes, another one!) as Japan’s first female prime minister added a sense of political renewal and fuelled hopes for government stimulus packages and continued corporate reform. Japanese exporters were boosted by a weaker yen which enhances overseas earnings when converted back into local currency.
Within continental Europe, equities posted steadier gains, with gains of 2.2% over the month. Strength in autos and luxury goods provided much of the lift, helped by signs of improving demand from China and a modest pickup in global trade momentum. Political uncertainty held back French markets with their fifth prime ministerial appointment in two years. German economic growth was also underwhelming and inflation moving upwards caused some jitters.
In the UK, equity performance was mixed, with defensive sectors and energy names doing well while the continued weakness in the UK economy and stubbornly high inflation once again hitting domestically focused businesses.
Bond markets delivered broadly positive returns through the month, benefiting from interest rate cuts. Investors worried about government shutdown in the US as well as fears that future cuts may not be imminent.
Source: Bloomberg
In Europe, the main government bond markets posted modest gains as inflation continued to moderate, and growth concerns resurfaced. Bonds favour weaker economic news as this is more likely to lead to interest cuts in the future which boosts returns. UK gilts were the standout performers rallying 2.9% – their strongest monthly gain in almost two years.
Within corporate bond markets, returns were buoyed by positive company news and continued evidence of balance sheet strength.
As we approach year-end, the familiar themes continue to shape market sentiment: inflation continues to fall, global interest rates continuing downwards slowly, and the resilience of global growth amid persistent trade and geopolitical headwinds. October once again underscored how swiftly markets respond to encouraging economic news. We also saw that bouts of volatility are inevitable. At Fairstone, we remain committed to building well-diversified portfolios across regions and asset classes, working with the global leaders in fund management and investment research to deliver the very best client outcomes.
This publication was prepared by Bernard Walsh, Head of Investments for Fairstone Asset Management DAC trading as Fairstone & askpaul.
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 10/11/2025
September delivered solid returns across global equity markets, as optimism over lower interest rates, resilient economic data, and appetites for growth again reasserted themselves.
Source: Bloomberg
At a regional level, emerging market equities (shown in orange above) led performance in September, advancing 5.8% in euro terms. Asia Pacific ex-Japan (in yellow) followed closely with a 4.4% gain. Chinese has been a strong performing market this year but Taiwan was a major contributor in September. Emerging Markets typically benefit from a softer dollar, easing trade tensions, and a continued improvement in investor sentiment.
In the U.S., markets continued to grind higher, with the large-cap S&P 500 (shown in green) rising 3.25%, though still trailing the technology-heavy Nasdaq. Optimism over interest rate cuts provided a strong tailwind for mega-cap growth stocks, as the Federal Reserve delivered its first 0.25% interest rate reduction of 2025. Expectations of further cuts provided support to equities – particularly in rate-sensitive sectors. The renewed ‘lower-for-longer’ interest rate story reignited investor confidence, driving fresh capital back into stocks.
Positive corporate earnings reports also underpinned equity market optimism, with many companies continuing to surpass forecasts. Readers may have expected trade wars and tariffs to hold back share prices. Positive company results helped reassure investors that, despite ongoing global tariff concerns, corporate performance remains resilient – easing fears that slowing economic momentum might threaten stock valuations.
Across Europe and the UK, equity markets showed resilience though gains were capped by lingering political risks and growth concerns. In continental Europe, the MSCI Europe ex UK index advanced 1.5%, buoyed by strength in technology, healthcare, and industrial sectors.
In the UK, equity markets were more subdued. The FTSE 100 showed limited upside, reflecting the headwinds from a weak domestic economy and sterling volatility. The FTSE 250, which has greater exposure to UK-centric businesses, underperformed, weighed down by lingering concerns about demand, inflation, and policy direction.
Bond returns were mixed but generally positive and heavily influenced by positioning in short or long-dated assets. Early in the month, interest rate cuts in the US and other markets boosted bond prices. As we went through September, In several regions, stronger-than-expected inflation (negative for bonds) pushed yields on shorter-dated bonds higher (reduced prices), while longer maturities fared better.
Source: Bloomberg
Credit markets (corporate bonds) fared comparatively better than sovereigns (government bonds), with investment-grade bonds (higher quality) supported by solid corporate earnings and strong balance sheets.
In the commodity space, gold continues to shine (excuse the pun), up another 9% in September driven by continuing concerns about government debt and trade disputes. Oil, on the other hand, was down 6.6% for the month as producers continue to expand supply.
Looking ahead, one of the biggest risks is that inflation could turn out higher than expected, which would likely push interest rate expectations back up. In September, inflation across the eurozone rose to 2.2%, from 2.0% in August, with Germany running even hotter at 2.4%. In response, the European Central Bank kept its main rate unchanged at 2.00%, acknowledging the uncertainty around tariffs and future price pressures, but repeating its commitment to bring inflation back under control over time.
At the same time, ongoing trade disputes remain a worry for businesses and investors alike. Many companies are now feeling the impact of earlier tariff measures, either absorbing higher costs themselves or passing them on to consumers. For investors, this mix of sticky inflation and trade uncertainty reinforces why central banks are cautious about cutting rates too quickly, and why markets may remain volatile in the months ahead.
Taken together, September’s economic landscape is one of mixed signals: growth is holding up better than many feared, but inflation remains stubborn and trade policy uncertainty hasn’t gone away. For markets, this has translated into a supportive environment for equities. We will watch the announcements on earnings for Q3 very carefully for insights from corporates on performance and future profitability. Market watchers will be particularly interested to see if the Magnificent Seven technology shares can continue to deliver on market expectations. Bonds will react to any signs of inflation emerging and will watch carefully for signals regarding future US interest rate cuts.
At Fairstone, we remain committed to building well-diversified portfolios across regions and asset classes, with a focus on delivering long-term growth, accepting the inevitable ups and downs on the journey to delivering positive client outcomes aligned to their attitude to risk.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 03/10/2025
We saw positive movements in global financial markets through August, reflecting a degree of renewed optimism, as equities across most regions delivered gains, while bond investors found some relief with central banks signalling interest rate cuts ahead. Movements in currency markets, however, saw a strengthening of the euro versus most major currencies, reducing gains for euro investors.
Across developed markets, Japan stood out as the month’s strongest performer, with the MCI Japan index (above in blue) gaining 4.5%, in EUR terms, advancing on the back of improving economic momentum and a positive trade agreement with the United States. Domestic data news was encouraging, particularly regarding economic growth and manufacturing activity.
Elsewhere, European equities reacted well to improving business activity and posted modestly positive returns, with the MSCI Europe index (in purple) up just over 1%. Political turbulence in France, following the announcement of a vote of no confidence in the government, pulled back French markets.
In the UK, the FTSE 100 advanced 0.3% in August, supported by its global exposure, while more domestically UK shares declined, reflecting ongoing concerns about the UK’s economy. The Bank of England cut interest rates by 25 basis points in August, but the effect was offset by stronger-than-expected inflation data later in the month. While employment weakened, inflation pressures remain, suggesting that fewer interest cuts were likely over the remainder of the year.
U.S. equity returns were slightly negative, with the S&P 500 (shown in green) down 0.5% in August. While US markets benefited from strong corporate earnings and solid momentum in both manufacturing and services – a weaker U.S. dollar over the month eroded gains once translated into euros.
Across Asia and emerging markets, equities advanced, supported by the temporary extension of the U.S. – China trade truce, which offered welcome relief to regional exporters. Chinese technology stocks also benefited from Beijing’s announcement of an ambitious semiconductor strategy. However, again, euro strength offset these gains, leaving the MSCI Emerging Markets index down 1.2% and the broader Asia index lower by 1.0%.
From a style perspective, the rotation that began earlier in the summer continued into August with small-cap stocks outperformed large caps, supported by resilient economic data and growing expectations of lower U.S. interest rates in the months ahead. Global real estate equities also gained for similar reasons, with solid U.S. corporate fundamentals providing an additional boost to the asset class.
Fixed income markets delivered mixed results in August, with performance varying across segments. Global corporate bonds outperformed global government bonds, with the Bloomberg Global Aggregate Credit Index (above in orange) rising 0.5% as strong earnings boosted confidence in corporate balance sheets. U.S. Treasuries experienced a volatile month: heavy issuance of more bonds and persistent deficit concerns put pressure on prices early on. However, comments from Federal Reserve Chair Jerome Powell signalling faster rate cuts boosted bond prices, particularly long-term bonds. However, expectations of lower rates in the future lead to U.S. dollar weakness through the month, weakening returns for euro investors.
In the UK, government bond fell even though the Bank of England delivered an anticipated rate cut. Investors were concerned about inflation risks and possible measures in the upcoming Budget. Meanwhile in the euro area, political instability in France weakened their government bonds, even though economic news from the country remained positive. This fed through into weakness for other bonds on the continent. Surprisingly, Greek bonds are viewed as a safer investment in relative terms to their French equivalent. Eurozone bond prices also reacted negatively to reduced expectations of further interest rate cuts from the European Central Bank (ECB). Economic growth remained broadly positive and inflation is approaching its target level, removing an urgency around further interest rate cuts.
Looking ahead, the familiar themes continue to dominate: the pace of central banks cutting interest rates, the path of inflation, and the resilience of global growth. August showed that markets are quick to reward positive surprises in these areas, though currency fluctuations and political risks remain notable drivers of volatility. At Fairstone, we remain focused on ensuring that portfolios are diversified across geographies and asset classes, with continued emphasis on equities as the key driver of returns.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 08/09/2025
July brought broad-based gains across global equity markets, fuelled by easing inflation pressures and resilient corporate earnings. Positive tailwinds also came from the U.S. revising its trade tariffs downwards, particularly for Japan and the European Union, providing a significant boost to investor sentiment globally. Markets interpreted these developments as signs that global trade tensions may continue to de-escalate, supporting cross-border growth prospects. Having declined for most of 2025, the US Dollar has recovered some of those losses, boosting the value of US shares held by euro-denominated funds.
Global equities extended their year-to-date performance, with the MSCI World Index gaining 4.3% in euro terms.
A standout performer was the U.S. S&P 500 Index, which rose 5.20%, buoyed by better-than-expected earnings, particularly from major technology and AI-centric firms. The rally was not just driven by a handful of mega-cap stocks; the equal-weighted S&P 500 also posted strong gains, indicating improving breadth and broader investor confidence across sectors including industrials, financials, and consumer discretionary.
Eurozone equities ended the month marginally lower, following a strong first half of the year. Investor caution also increased slightly due to the euro’s strength, which impacts the competitiveness of export-sensitive stocks. dragged down by warnings from continental technology corporations about the negative impact of US trade policy on their 2026 growth targets. Food and drinks companies also struggled, blaming increasing challenges from weak demand from China.
UK equities delivered solid returns, with the FTSE 100 Index climbing 3.5%, helped by easing inflation data and expectations of interest rate cuts. The index’s composition, with significant exposure to energy, commodities, and healthcare, was a tailwind amid a backdrop of rising oil prices and stronger-than-expected sector earnings.
In Asia, equity markets were led by China, where stocks surged on the back of improving consumer confidence, early signs of economic stabilisation, and expectations of interest rate cuts. Policymakers announced a new infrastructure spending package targeting digital networks and green energy, further lifting sentiment. The rally in China helped lift the broader emerging markets, which returned 4.7% in euro terms, as commodity exporters and Southeast Asian manufacturing countries also performed well.
Japanese equities posted more modest gains in euro terms during the month, remaining near multi-decade highs. However, mid-month announcements indicating progress in U.S.-Japan trade discussions provided a temporary lift to sentiment. Investors were encouraged by strong corporate earnings momentum – especially in the auto, machinery, and financial sectors – combined with the Bank of falling interest rates.
Bond markets were mixed. A rally in early July, driven by disinflation data, reversed later in the month as global growth suggested interest cuts were less likely and governments fuelled spending by issuing more debt. Overall, global bond returns finished July flat to slightly negative in euro terms.
In the U.S., June inflation data showing further progress However, bonds struggled driven by expectations for continued tax cuts and widening government deficits.
In the eurozone, government bond yields also moved higher, and prices fell. Corporate purchasing data suggested expansion across both manufacturing and services. Inflation remained stable at 2.0% y/y, in line with the European Central Bank’s (ECB) target. The ECB opted to hold rates steady, citing caution amid global trade uncertainty.
Once again, corporate bonds outperformed government debt, with credit spreads narrowing slightly amid continued strong earnings, low default activity, and stable fundamentals. Investors continued to have appetite for quality bonds in investment-grade and high-yield markets.
Elsewhere, listed real assets – particularly infrastructure and property equities – rebounded after a mixed performance earlier this year. Demand for income-producing assets increased as lower interest rate expectations emerged and investor interest returned to real estate investment trusts (REITs), with the asset class delivering positive returns.
Gold prices remained broadly stable, consolidating gains from earlier in the year and continuing to attract demand as a hedge against geopolitical and fiscal uncertainty.
Looking forward, markets remain focused on corporate earnings, the ever-evolving trade conflicts and the resilience across major developed markets. With some uncertainty remaining, it is inevitable that we will see ongoing volatility in equities, as well as in currency and bond markets. Markets do seem to be looking beyond the immediate concerns. Across Fairstone, we adopt a long-term approach to investing, with less focus on short-term noise. We suggest that our client portfolios remain well-diversified across geographies and asset classes, to provide growth ahead of bank interest rates and inflation over the recommended time horizons.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 08/08/2025
The second quarter of 2025 proved to be one of the more dynamic periods in recent financial history. Driven by a series of geopolitical shocks, macroeconomic shifts, and monetary policy divergence, global markets swung sharply in April before recovering with vigour through May and June. Equity markets rebounded strongly, yields softened in many regions, and the dollar weakened, driving a broad-based recovery in risk assets. Overall, global equities closed Q2 up 2.0%, in euro terms, while global bonds gain 1.0%
April began with a jolt to markets as President Trump enacted a new round of trade tariffs, targeting key imports from across the globe. The so-called “Liberation Day” tariffs saw the introduction of a sweeping 10% base levy, with some sectors and regions, hit by far greater duties. Equity markets sold off sharply, with the S&P 500 losing 14%, in EUR, through the first few weeks of the quarter. Other global indices also declined. Yields on U.S. 10-year Treasuries rose 50 basis points as inflation and growth concerns flared. However, swift policy recalibration followed, with the White House pausing enforcement of a large portion of Trump’s previously announced tariffs and initiating trade negotiations, leading to a fast rebound in sentiment.
In the U.S., the S&P 500 (above in green) recouped all its April losses, closing the quarter up 1.6%, in EUR, led by the region’s technology index, the Nasdaq (in pink), which closed the quarter up 8.2%. The “Magnificent 7” mega-cap tech names once again delivered outsized returns, benefitting from ongoing optimism around artificial intelligence and resilient earnings.
For ex-US investors, however, a weakening of the dollar weighed on the region’s equity market returns, with currency movements muting the full extent of the rebound.
Outside the U.S., the recovery in equity markets was also evident, with easing trade tensions and improving macro-economic data prints helping support performance from Japan, Asia and emerging markets. For Euro investors, however, currency movement again took a significant toll on translated returns, with a strengthening of the Euro against almost every other major currency (illustrated on the chart below) detracting from performance.
Across Europe and the UK, again, markets rebounded, albeit full quarter returns were close to flat. In the UK, the FTSE 100’s elevated exposure to energy and healthcare stocks detracted, with geopolitical machinations and changes to U.S. funding policies causing the two sectors to be the only negative performing sectors, at a global level, through the quarter.
As with the equity market, the bond market was volatile in April but settled through May and June. U.S. 10-year Treasury yields ranged between 4.2% and 4.6%, ultimately declining towards the lower bound as markets priced in a more dovish outlook from the Federal Reserve. In Europe, bonds rallied further as the European Central Bank (ECB) and Bank of England (BoE) cut rates. The BoE reduced its deposit rate to 4.25%, while the ECB enacted two rate cuts in April and June, bringing the deposit rate down to 2.0%, with ECB President Lagarde indicating that the central bank is nearing the end of its rate cutting cycle.
At a global level, corporate bonds (in orange, above) outperformed their government counterparts, as corporate fundamentals continued to show resilience. Despite selling off sharply coming into the quarter, a retracement of credit spreads led the global high yield index (in light blue) to rebound particularly strongly, closing June up 2.9%.
Within commodity markets, energy prices were choppy amid geopolitical uncertainty in the Middle East, notably tensions between Israel and Iran. Oil prices fluctuated but ended the quarter lower as supply remained ample. Gold benefited from safe-haven demand and falling real yields, making it one of the top-performing assets of the quarter. Infrastructure equities rallied, aided by a pickup in artificial intelligence (AI) infrastructure investment and government spending, while global real estate stocks posted modest gains as interest rate cuts improved relative valuations.
At a macroeconomic level, the picture remained mixed. In the U.S., job growth slowed, raising concerns about the health of consumer demand and increased pressure on the Federal Reserve to support growth. However, inflation remained stubborn, with the imposition of trade tariffs expected to add to the inflationary burden on consumers.
The release of President Trump’s flagship budget reconciliation package, the “One Bill Beautiful Bill Act”, which extends tax cuts while reducing spending on areas such as healthcare and clean energy, raised further questions for investors. On one hand, the bill is expected to support growth, while on the other, estimations indicate that it will add between $3 and $5tn to US Federal debt over the next decade.
In Europe, fiscal support in Germany and Southern Europe helped offset the headwinds of rising unemployment, while inflation appears to have settled.
Overall, as the chart above indicates, inflation levels across the major global markets do appear to be normalising at around the 2% level, however, moving forward economists expect inflation volatility.
Despite the level of trade and tariff uncertainty, corporate earnings remained resilient through Q2, particularly in the U.S., where 77% of S&P 500 companies announced earnings that exceeded market expectations. AI-driven capital expenditure remained a key theme, especially in technology and infrastructure sectors. Across Europe, earnings have also edged upwards, with a strengthening European consumer helping boost the outlook for domestically focused European corporates.
Looking ahead, markets remain focused on several key risks: the outcome of trade negotiations before the July 9 tariff enforcement deadline, the trajectory of inflation, and any resurgence in geopolitical tensions. Monetary policy divergence is expected to persist, leading to continued volatility across government bonds and currency markets.
Within portfolios, our focus remains on ensuring diversification across geographies, asset classes, sectors, and investment styles. By maintaining a balanced approach, focusing on quality, and remaining tactically flexible, we as investors can position portfolios to weather potential volatility while capturing opportunities as they emerge.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 30/06/2025
– Equities rebound strongly after volatile April, led by gains from the U.S.
– Fixed income performance is mixed; government bonds underperform
– U.S. tariff policy remains the preeminent source of market uncertainty
Through May, global equity markets rebounded strongly, gaining 5.5%, in EUR, buoyed by easing trade tensions and improving consumer sentiment. Developed market stocks outperformed their emerging market counterparts, led by gains from U.S. markets, where the region’s broad S&P 500 index (in green, below) gained 6.0%.
U.S. trade negotiations continued between the White House and other key global governments, with progress made between the U.S and the E.U., while a mid-month trade truce between the U.S. and China helped fuel gains across risk assets. Although trade tariffs remain the focal point of President Trump’s economic agenda, early sightings of his budget reconciliation bill point to new tax and regulatory changes that will help boost the U.S. domestic business landscape – a development that proved positive for small cap stocks.
Despite ongoing disruption to the trade backdrop, U.S. corporates posted a robust set of quarter one earnings, with 77% of companies reporting positive earnings surprises. Technology darling, Nvidia, was one such company, beating both earnings and revenue expectations – helping the technology focused Nasdaq Index (in pink, below) post a month end gain of 9.8%.
Source: Bloomberg
Elsewhere, both European and U.K. equities posted gains, with upward earnings revisions helping underpin confidence in the European equity market. Within the U.K., GDP data surprised to the upside, while announcements of trade deals with India and the U.S. further added to optimism. However, persistent inflation in the region continues to put pressure on U.K. bond yields, in turn, weighing on the relative attractiveness of the region’s dividend paying stocks.
Across emerging market, equities benefitted from a cooling in trade tensions between China and the U.S., while a weakening dollar helped fuel gains. The broad emerging markets index gained 5.0%, in EUR, with Taiwan and Korea outperforming at a country level.
Commodity markets struggled, with gold (in black, above) especially weak through the period, falling 0.9%, as investors capitalised on falling recessionary fears by shifting capital way from defensive assets.
The impact of currency movements was mixed through May, as the U.S. dollar pared back some of its year-to-date losses versus a number of major currencies, including the Euro, a move that benefitted Euro holders of U.S. assets. Elsewhere, the Japanese yen had was one of the strongest currencies, posting a relative gain of 1.2% against the Euro.
Source: Bloomberg
Across bond markets, the picture was more challenging, as concerns over fiscal deficits in both the U.S. and U.K. pushed up long-dated yields, weighing heavily on government bond prices. Improving trade tensions helped buoy returns from credit markets, with corporate bonds outperforming their government counterparts. The global high yield index (in blue, below) was a notable standout to the upside, benefitting from a brighter growth outlook and eking out a gain of 1.5%. However, the broad weakness in government bonds led the global aggregate index to close the month down 0.6%.
Source: Bloomberg
U.S. treasuries suffered a credit rating downgrade from Moody’s, a move that underscores the wider market’s growing concern over the trajectory of the region’s fiscal policy and the widening budget deficit. Longer-dated bond yields, particularly the 30-year tenor, moved significantly higher over the month, reflecting a nervousness in bond investors over global growth and inflation outlooks. The US 30-year Treasury yield hovered near 5%, similar to levels seen in U.K. gilt, highlighting the caution required in fixed income allocations.
Overall, U.S. tariff policy continues to be the predominant driver of global financial market sentiment and returns, as investors grapple with the potential negative knock-on effects to growth, inflation and interest rates. The 90-day pause for most tariffs between the U.S. and China is estimated to have brought the overall effective US tariff rate down to 15%, from the previous 21-22% level. However, the outlook remains extremely uncertain. Furthermore, a month end court ruling and subsequent White House appeal over the legality of certain tariffs is raising additional unknowns.
Source: Oxford Economics/ Census Bureau
As financial markets remain highly sensitive to developments in US trade policy, economic data, and geopolitical machinations, our focus remains on ensuring portfolio level diversification across geographies, asset classes, sectors, and investment styles. By maintaining a balanced approach, focusing on quality, and remaining tactically flexible, investors can position portfolios to weather potential volatility while capturing opportunities as they emerge.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd. (United Kingdom). Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 30/05/2025
– US trade policy drove volatility across markets
– Equities retreated, as growth concerns mounted
– USD weakness detracted from equity market returns for EUR investors
April 2025 was a month marked by significant volatility and uncertainty across global financial markets. The primary driver of this turbulence was the announcement of sweeping tariffs by the US administration, which had far-reaching implications for trade, economic growth, and investor sentiment.
Global equity markets experienced substantial swings throughout April. The initial tariff announcements on April 2nd triggered a global sell-off, with US stocks plunging by over 10% at one point and a surge in the VIX volatility index. However, markets calmed later in the month after some US policy moderation and better-than-feared corporate earnings results. The S&P 500 ultimately closed down around 5.5% in EUR terms, while the tech-heavy NASDAQ outperformed despite starting the month weakly, falling by 4.1%. Ex-US developed markets outperformed as capital flowed towards the UK, Europe, and Japan, continuing the trend of the previous three months. China, seen as the nation worst affected by US policy, was the weakest in EUR terms.
Gold performed exceptionally well in April, rising by more than 5.3% in EUR (black line above). Gold’s role as a safe-haven asset was reinforced by broader economic uncertainties and geopolitical tensions, with investors continuing to turn to the precious metal as a hedge against potential market downturns and inflationary pressures.
Currency markets were also strongly impacted by the tariff announcements, with movements here being a key component of equity returns when translated back into EUR. The US dollar, which would usually be expected to appreciate in an uncertain macroeconomic environment, sold off heavily vs all major currencies. In contrast, the euro exhibited strength through the period, gaining against most major currencies. Versus USD, the euro added 4.7%.
Within bond markets, global government bonds rallied through early April as uncertainty in equities picked up. A concerted sell-off then followed as investors priced in additional inflation concerns linked to the impact of US tariff policies. Some recovery was seen later in the month as policy moderated, but per the chart below, slowing growth expectations and greater levels of economic uncertainty led investment grade and high yield corporate debt to underperform government bonds over the month. US asset fared especially poorly, underperforming European and UK counterparts.
Despite signs of growth weakening in the US, the Federal Reserve has been clear that they won’t cut interest rates until the weakness is apparent in macroeconomic data due to inflation risks. This means less positivity at the margin for US bonds.
As mentioned above, one of the key themes in April was the impact of US tariff measures on the global economy. Observed levels of US trade policy uncertainty were extremely high as the chart below shows, and this uncertainty is expected to persist into the third quarter of 2025, adding to concerns about a potential growth slowdown, especially as the full shock from tariffs hasn’t fully hit macroeconomic and earnings data yet.
Economic indicators such as GDP growth and inflation trends have shown mixed signals. In the US, GDP growth peaked in December 2024 and has since declined to nearly 0%, a deterioration that underscores the challenges faced by the US economy in maintaining growth momentum amidst external pressures. The impact of initial US tariffs on economic forecasts for other regions has also been notable. While the US GDP forecast has deteriorated significantly, the EU and Japan’s forecasts have remained relatively stable. This divergence highlights the varying degrees of resilience among major economies in the face of trade disruptions, as well as differing monetary and fiscal policy responses.
While financial markets continue to present a complex and dynamic environment, the key to navigating such an backdrop lies in diversification across geographies, asset classes, sectors, and investment styles. By maintaining a balanced approach, focusing on quality, and remaining tactically flexible, investors can position portfolios to weather potential volatility while capturing opportunities as they emerge.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Oliver Stone, Head of Portfolio Management & Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558).
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional investment advice after a thorough examination of their particular circumstances. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 16/05/2025
– Equities retreated amid escalating trade tensions and recession fears
– Bond markets saw volatility as inflation concerns intensified
– Germany unveiled fiscal stimulus
March 2025 brought significant volatility across global markets, shaped by intensifying trade tensions, divergent central bank policies, and mounting recession concerns. Investor sentiment deteriorated as the US administration dramatically expanded tariffs targeting multiple trading partners, while fiscal developments in Europe and the UK highlighted contrasting approaches to economic challenges. The combination of increasing protectionism, sticky inflation, and slowing growth created a complex environment for investors navigating an increasingly uncertain global landscape.
Equities faced the brunt of the growing uncertainty around global trade and economic growth, with the S&P 500 extending its February correction, losing 9.4%, in Euro terms, in March, heavily impacted by technology and cyclical sectors reacting to escalating tariff threats and policy uncertainty. European equities also weakened, with the MSCI Europe index declining by 4.6%, driven by sluggish regional growth and heightened US trade tensions. Germany’s substantial fiscal stimulus announcement later in the month provided partial relief, benefiting defence and infrastructure-related stocks in particular.
In the UK, the FTSE 100 fell 4.0%, though exposure to banks, defence stocks and commodities offered an element of protection to the region. Japanese equities fell by 5.0%, while broader Asian sentiment was mixed. Notably, Chinese equities held up well, losing only 2.0% despite ongoing trade concerns.
On the whole, a strengthening of the Euro versus other major currencies through the month weighed on equity market returns for Euro investors.
Bond markets saw volatility throughout March but held up relatively well, helped by a rally across most major indices in the final week. US government bonds gained 0.1%, as recession fears drove Treasury yields lower in a flight to safety and a repricing of Federal Reserve rate cuts this year. In Europe, bonds reacted negatively to Germany’s fiscal stimulus announcement, with Bund yields moving sharply higher, and causing European government bonds to lose 1.7%.
Despite broader market volatility, corporate bonds displayed notable resilience, highlighting selective investor confidence in credit quality amidst macroeconomic uncertainties.
Currency markets reflected the broader themes playing out across economies. The US dollar weakened against all major currencies, as investors reassessed the demand for US assets given trade uncertainty and a weaker economy leading to more rate cuts. In contrast, the Euro exhibited strength, as investors reassessed the trajectory of European interest rates, given increased fiscal spending and signs of economic growth in the region.
Trade policy dominated economic discussions in March, with the US administration aggressively expanding its tariff regime. Having already implemented tariffs against China, Canada, and Mexico in February, President Trump ordered a 25% tariff on autos and auto parts on March 26, effective April 3rd.
Initial tariffs announced on March 4th were somewhat watered down after negotiations, but tariff rates on US imports from Canada and Mexico have still ended up at double-digit levels. As at end-March, the market currently assumes 25% tariffs will be reimposed in April on imports from Canada and Mexico (with a lower 10% tariff on Canadian energy) alongside the steel, aluminium and China tariff.
Taken together, the overall US effective tariff rate is expected to significantly rise from its previous level – a dramatic shift that reverses several decades of trade globalisation. Markets are now bracing for further potential escalation, with additional “reciprocal tariffs” expected to be announced in early April, following what Trump describes as the United States’ “Liberation Day” on the 2nd. Investor concerns extend beyond the blunt tariffs currently being enforced or threatened, particularly given the ongoing uncertainty surrounding their exact nature, with plans appearing to shift almost daily. This volatile environment makes it extremely difficult for businesses and consumers to plan effectively, leading to delays in capital expenditure, hiring, investment, and broader spending. Such hesitation may result in knock-on effects further down the line.
All this uncertainty is already beginning to weigh on business and consumer confidence, as well as broader economic projections. In the Federal Reserve’s March meeting, they updated their projections for the end of 2025, shown below, lowering growth, while rising the rate of inflation and unemployment. However, it is important to note that these levels are still far from forecasting a recession and independent from political noise would be considered healthy.
Outside the US, March brought a paradigm shift in European fiscal policy, centred on Germany’s massive stimulus announcement. The incoming CDU-SPD coalition government proposed an unprecedented fiscal expansion that quickly earned the nickname “fiscal bazooka”. The package totals approximately €500 billion (12% of 2024 GDP) and represents a dramatic departure from Germany’s traditional fiscal conservatism.
The plan includes widening the structural deficit allowed under Germany’s constitutional debt brake, exempting defence spending above 1% of GDP from deficit calculations, and creating a sizeable infrastructure fund outside the scope of the debt brake. This would fund a substantial increase in defence spending from just 1.3% of GDP in 2021 to around 3% by 2027, alongside an accelerated €100 billion investment in transport, energy, and digital infrastructure.
This fiscal expansion is deemed significant enough to transform Germany’s economic outlook. Economists have substantially revised their projections upward, now expecting GDP growth to average 1.8% over the next four years – 0.7% higher than forecast just a month ago. However, this fiscal expansion also raises inflation concerns for the region.
The global market and economic environment we find ourselves in presents a complex mix of challenges and opportunities. Escalating trade tensions, persistent inflation concerns, and mounting recession fears create headwinds, yet selective opportunities exist across asset classes for investors.
The key to navigating this uncertain landscape lies in diversification, across geographies, asset classes, sectors, and investment styles. By maintaining a balanced approach, focusing on quality, and remaining tactically flexible, investors can position portfolios to weather potential volatility while capturing opportunities as they emerge.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Harry Scargill, Portfolio Manager & Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558).
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional investment advice after a thorough examination of their particular circumstances. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 07/04/2025
– Equity markets mixed with the US underperforming
– Bond markets showing strength amidst policy uncertainty
– Trade policy and geopolitical uncertainty adding to worries
February was another month of shifting dynamics in global markets, shaped by a mix of trade tensions, geopolitical uncertainty, and evolving policy expectations. Investor sentiment remained cautious as fresh U.S. tariffs targeted China, Canada, and Mexico, while diplomatic and political developments added to the complexity of the broader macroeconomic landscape.
Equity markets navigated these uncertainties with resilience in some cases, though performance varied by region. In the UK, stocks edged higher, supported by a more stable currency environment and strength in defensive sectors like consumer staples and utilities. Large-cap stocks outperformed their smaller counterparts as investors continued to favour established companies with strong balance sheets in a period of uncertainty. Across the Atlantic, U.S. markets carried their post-election momentum forward, though small caps struggled here too as concerns around tariffs and trade-sensitive sectors took hold.
Elsewhere, Chinese equities were by far the strongest performers over the month, driven higher by improved sentiment following more government pronouncements of support, and positivity following last month’s Deepseek announcement:
Source: Bloomberg Finance L.P.
The bond market had its share of volatility, with government yields rising early in the month before stabilising as economic data came in softer than expected. In the U.S., concerns over higher spending and potential inflation pressures initially pushed yields higher, but by the latter half of February, those fears eased somewhat. Meanwhile, European bonds held firm, as investors sought safety amid political uncertainty in Germany, where the incumbent government was swept aside in elections. Credit markets remained relatively calm, with investment-grade corporate bonds attracting demand.
Source: Bloomberg Finance L.P
Currency markets reflected the broader themes playing out across economies. The U.S. dollar weakened as global trade risks grew, driven by President Trump’s wayward policy announcements. The Euro had a more mixed month, gaining against USD but weakening against GBP, as UK GDP data surprised to the upside. The Japanese yen also gained, vs EUR, as we saw hawkish comments from the Bank of Japan around interest rate rises, some very strong consumer spending & wages data, and some risk aversion coming back into market, for which the yen is a classic haven.
Bloomberg Finance L.P.
Trade remained a major point of focus, with the U.S. administration pushing forward with its plans to increase tariffs. A new 10% levy on Chinese imports, effective from early March, added to supply chain concerns, while additional tariffs on industrial metals are set to follow later in the month. Canada and Mexico were also hit with fresh trade restrictions, and there is growing speculation that European exports may soon face similar treatment. Investors will be watching closely to see if these measures escalate into broader retaliatory actions, particularly from China and the EU.
Beyond trade, geopolitical tensions showed no signs of easing. The Russia-Ukraine peace talks stalled, and with the risk of the U.S. withdrawing some level of support, uncertainty around the region deepened. In Europe, Germany’s elections reshaped the political landscape, and while coalition negotiations are ongoing, early signals point to a shift toward higher government spending and more pragmatic economic policies. Markets have so far reacted cautiously, waiting for further clarity.
Against this backdrop, as always, avoiding knee-jerk reactions to short-term market noise remains critical, and our portfolio positioning remains focused on stability, and long-term resilience through diversification.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Oliver Stone, Head of Portfolio Management and edited by Imogen Hambly CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558).
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional investment advice after a thorough examination of their particular circumstances. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 27/02/2025
– Equity markets start the year well, led by Europe and the UK
– DeepSeek and Trump tariff policy causes volatility in US equities
– Broad strength across bond markets, ECB cuts rates and Fed holds
Global equity markets started the year on a positive note, recovering from the headwinds experienced towards the end of 2024. European equities rebounded sharply, posting gains of 6.8% in January, following a challenging December driven by concerns around tariffs and weakness in key sectors. The FTSE 100 was another standout performer, rising 4.5% and reaching an all-time high, marking its best monthly performance since November 2022.
Despite ending well, U.S. equities exhibited significant volatility, particularly in the final week of January, driven by a combination of earnings reports from major technology firms and a significant market shakeup caused by DeepSeek’s AI breakthrough. The S&P 500 and Nasdaq saw substantial swings, reflecting the uncertainty around AI-related investments and potential disruptions to the current semiconductor landscape.
Emerging Markets and Asian equities underperformed relative to developed markets, despite exhibiting lower volatility levels. The FTSE 250 also struggled to keep pace with the broader market rally, highlighting continued economic uncertainty in the UK’s domestic economy.
Bonds had a steadier and more positive month, as compared to late 2024, with corporate bonds outperforming government bonds. High-yield bonds led the way, reflecting continued investor appetite for risk in a more stable market environment.
Inflation-linked bonds also performed well, supported by concerns over inflation persistence, particularly in the U.S., where upcoming policy decisions and geopolitical risks weighed on sentiment. Market expectations for rate cuts in 2025 have moderated, with fewer cuts now priced in compared to earlier forecasts, leading to upward pressure on bond yields across major developed markets.
Notably, European government bonds were the weakest performer in the bond space, reflecting ongoing economic stagnation and political uncertainty. The European Central Bank (ECB) moved to cut rates to 2.75%, as expected, with markets anticipating similar action from the Bank of England in their February meeting. In contrast, the Federal Reserve opted to hold rates steady, reinforcing expectations of a “higher-for-longer” stance on U.S. interest rates.
In currency markets, the Euro had a mixed month, gaining against the pound and the dollar, but falling against most emerging market currencies.
A major event impacting markets in January was the unexpected impact of DeepSeek, a Chinese AI company that launched a highly competitive AI model at, reportedly, a fraction of the cost of its Western counterparts. This triggered widespread concern among investors regarding the sustainability of the heavy capital investments made by major technology firms in AI infrastructure.
The revelation that DeepSeek had trained its model using older and cheaper semiconductor chips sent shockwaves through the semiconductor sector, with Nvidia, in particular, losing nearly $600 billion in market capitalisation in a single session. To put the size of this move into context, only 14 listed companies in the world have a market capitalisation higher than the amount that Nvidia lost.
Despite this disruption, broader equity markets demonstrated resilience, with around 300 S&P 500 stocks remaining flat or positive despite the index’s overall decline, as shown in the chart below. This supports the view that equity market leadership is gradually broadening beyond the “Magnificent 7” tech stocks, a trend that may continue through 2025.
January also marked the beginning of President Trump’s second term, bringing with it immediate policy shifts that impacted market sentiment. His administration moved swiftly to implement tariffs, initially suggesting a postponement on Mexico and Canada before abruptly reversing course and imposing 25% tariffs on both nations. Additionally, a 10% tariff was levied on Chinese goods, with the possibility of further increases in the future.
These tariff measures have raised concerns over inflation, as the cost of imported goods will rise and consumers may feel the brunt of these increases. Early estimates suggest that tariffs on Canada and Mexico will have a more significant inflationary impact than those on China, given the changing trade flows since Trump’s first term.
Alongside tariffs, stricter immigration controls were introduced, further tightening an already constrained U.S. labour market. With unemployment at historically low levels, these policies risk exacerbating labour shortages, which could drive wage inflation higher and impact the broader economy. Bond markets have already reacted to these developments, with yields rising in anticipation of prolonged inflationary pressures.
The unpredictability of Trump’s policies, particularly in trade and labour markets, has introduced a new layer of volatility to financial markets. Investors will need to remain adaptable as more clarity emerges on the administration’s long-term economic strategy.
January provided investors with a stark reminder of the importance of diversification and caution in navigating an increasingly complex global economic landscape. While equity markets started the year strong, volatility remains a key theme, particularly in the technology sector.
The bond market’s response to shifting inflation expectations and central bank policy decisions will continue to be a focal point, as investors weigh the impact of higher-for-longer interest rates against slowing global economic growth. Additionally, geopolitical risks, trade policy shifts, and evolving AI investment dynamics will be key factors influencing market direction in the coming months.
As we move further into 2025, maintaining a well-diversified approach and adapting to changing market conditions will be essential for investors seeking to manage risk while capitalising on the available opportunities.
At Fairstone, we specialise in providing tailored investment planning advice to help clients achieve their financial goals. Our experienced advisors offer personalised strategies designed to optimise growth, manage risks, and ensure diversification across a wide range of assets. By working with Fairstone, you can have confidence that your investment decisions are guided by expertise, adaptability, and a commitment to your long-term success.
Contact us today to schedule a no-obligation investment consultation and start planning for a secure financial future.
This publication was prepared by Henry Scargill CFA, Portfolio Manager for Fairstone Private Wealth Ltd (United Kingdom).Fairstone Private Wealth Ltd. is authorised and regulated by the Financial Conduct Authority (FRN: 457558)
This publication is for general information purposes and is not an invitation to deal or address your specific requirements. The information is believed to be reliable but is not guaranteed. Any expressions of opinions are subject to change without notice. This publication is not to be reproduced in whole or in part without prior permission. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information of the various source material, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional investment advice after a thorough examination of their particular circumstances. We cannot accept responsibility for any loss due to acts or omissions taken in respect of the information contained within the articles. Thresholds, percentage rates and tax may be amended due to future legislative changes.
Information as of the date of publication 27/01/2025
