Overview
The past few months have been a rollercoaster for global markets, with significant developments in trade policies, regional tensions, and inflation. Here’s a closer look at what’s been happening and what it could mean for investors.
At Scottish Friendly, we aim to support our customers with the information they need to make informed decisions about their investments. Our outlook articles are published to help customers understand global events that could impact investment performance.
Remember that the value of investments can go down as well as up, and you could get back less than you paid in. Past performance is not a reliable guide to future results.
Staying focused on your long-term goals
News of conflict, trade disputes, and market volatility can understandably cause concern among investors trying to assess the potential impact on their finances.
It is important to remind ourselves in these times to stay calm and focus on our long-term saving and investment goals.
United States
The U.S. market has experienced some volatility due to ongoing trade tensions. The recent increase in tariffs on steel and aluminium imports - reportedly up to 50% - has added pressure on manufacturing. Despite this, equity markets have shown resilience, thanks to strong consumer spending and tech sector growth. Inflation is still a worry, and the Federal Reserve is maintaining a watchful stance.
Outlook:
The U.S. market will continue to navigate high tariffs and inflation risks. A recent ceasefire in the Middle East could contribute to stabilising oil prices, potentially easing some inflationary pressures. Investors should monitor developments in trade policy and their broader market implications.
United Kingdom
In the UK, markets have been influenced by updates to the post-Brexit EU trade agreement and new tariff negotiations with the U.S. The economy is showing moderate growth, but inflation is still a problem, driven by higher energy prices and rising business costs. Investors are watching the Bank of England's moves closely.
Outlook:
Inflation and trade-related uncertainty will continue to challenge the UK market. While improved geopolitical conditions may help ease energy price pressures, the broader economic outlook remains cautious.
Europe
European markets have had a mixed month. The Eurozone is dealing with inflation, especially in energy and food sectors. Regional conflicts in Eastern Europe continue to add to market uncertainties. The European Central Bank's supportive policies are helping stabilise bond markets and support equity investments.
Outlook:
The outlook for Europe remains measured. While stabilisation in global energy markets may help reduce inflationary pressures, continued geopolitical concerns, particularly in Eastern Europe, could weigh on investor sentiment.
Asia
Asian markets, especially in Japan and South Korea, have demonstrated resilience despite global trade tensions. Japan's market is benefiting from strong corporate earnings and a weaker yen, boosting export competitiveness. South Korea's tech sector continues to attract significant investment, although inflationary pressures are evident.
Outlook:
Asia's markets are expected to stay strong, with robust corporate performance and strategic investments driving growth. While stabilising geopolitical conditions may reduce some global risk, ongoing trade tensions will remain important to monitor.
China
China's market has been impacted by both domestic and international factors. Ongoing trade tensions with the U.S. and new tariff measures are affecting export-oriented industries. China's internal policies aimed at reducing debt levels and controlling inflation have had mixed results. While government stimulus measures provide some support, investor sentiment remains cautious.
Outlook:
China's market outlook is mixed, with trade tensions and domestic policy adjustments continuing to influence performance.
While improved global conditions may help stabilise energy prices, economic uncertainty persists. However, there remain sectors with strong domestic demand and clear policy support. In times like these, it's important to stay calm and keep your long-term saving and investment goals in mind.
