Thoughts on short term market direction
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A reasoned reply….although it still feels to me like he risks bringing inflation up with a probably spate of “tit for tat” tariff responses (Canada with the first).
He wants to bully nations into doing things, just so he can eventually claim a business victory, as he bases his entire persona on being the master of the deal…
….but mean while, the price of goods (gas, eggs, etc)will only get higher.
Is that good or bad for the markets?!As you say, there is nothing we can do….but we can move our investments about: stock to money markets or bonds, for example. Or indeed the other way, if you feel bullish!
Does the investment committee for IML consider these things, or is no action considered necessary? -
It's entirely possible it will be inflationary-if it is prolonged. Tarrifs won't have any real impact on companies like MSFT or GOOG, Apple can, to some extent source some hardware from India. China sales are from China made phones-no tariffs. So the impact won't be what you might think.
This is a fast paced political issue which will work its way out to a conclusion-most likely. Making tactical asset allocations and effectively guessing what's next should be avoided.
It's the same logic with the FTSE-Trump is suggesting no tariffs on the UK, so all of a sudden the UK with thrive? 20 years of inefficiency and under performance now over? I don't think so.
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Breaking- Foxconn shares are down 10% due to their massive exposure to Mexico, in particular their AI server plant which will now be crushed by US tariffs. Will SMCI get a boost? They surely must but will the market be smart enough to realise it?
In response the Taiwan government has immediately started diplomacy and initiated assistance to local companies-helping them relocated to America via investment assistance and support to attend large US made events which could lead to securing partnerships.
That didn't take long did it. For a long time America wanted the sub 3 node from TSMC made in America and TSMC to date has said it will only produce their best chips in taiwan-hmm, I think that may now change.
As we have said before, Trump doesn't want to tax Taiwan, he wants a fair deal. He wants critical tech made far away from Beijing.
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The market drops seen today have been the Asian and European ones. However I think that IM/Cobens have almost all their investments in the US markets, which will be affected differently to the Eur/Asian ones as they are on the other side of the tarriffs. Is it expected that the US markets will also go down, or will they go up?
The $ has strengthened against the £ slightly today (about 0.5%). Surely this will lead to a slight FX boost on the IM/Cobens positions? (It'll probably be short-term, but still a boost.)
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All markets will react in the short term-the USD will strengthen as a result of perceived inflation keeping rates higher for longer, a positive if you hold USD denominated assets. The take away here is, we just don't know what the US administration is going to do, I'm not even sure they do, entirely. There will be a lot of talk to effect a behavioural change in some countries.
The media will try and frighten as many people as it can. The most likely scenario is that after the initial threats, a middle ground is reached. remember, these tariff threats were campaign promises so he's got to 'deliver' something. For how long and the true driver of them is a bit more opaque right now.
The Investment Comm met at 12pm to discuss all available information and we are watching the situation closely. No knee jerk reaction will be made where we materially change the asset allocations.
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The opening sell off 2.5% was supported by heavy buying at 3.30 with most of the dip recovered. Many holdings are actually up. Net, the impact is relatively muted so far. Volatility will no doubt remain as the markets remain 'news' driven.
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Trump delays tariffs effective date by 1 month. Talking already
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The delay is for Mexico only as following discussions, President Pardo agreed to deploy 10k national guard members along the border to combat drug trafficking.
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The Tariff King is back in full swing, it appears.
️It is somewhat unclear to me where the end game is.
We all know Trump is transactional, a “deal based” human, even if The Art of the Deal was actually ghost written by Tony Schwartz.Short term, I can only see it raising inflation. The price of eggs continues to rise, whilst the CIC spends over ¼ of his time on a golf course
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Medium term, it can only make people in countries from Canada & China to Mexico & beyond trust Trump less and less
️The past week has been very concerning Stateside.
Scenes with Zelensky felt like an Oval Office ambush, regardless how one might feel he should have better prepared.
My US pals, admittedly a very small sample in a country of over 330M, are aghast at the actions being taken to remove checks and balances in their democracy. One good friend was thrilled when he was able to move with our company to California around 20 years ago, fully embracing America. Now a US citizen, he is clearly appalled at what is happening.
Tesla continues to take a pounding over the behaviour of the DOGE Meister, Musk, continuing to try to get hold of everybodies personal data from secure Government departments.I’m sure business will continue, & the companies Adam focussed on with individual threads will hopefully continue to thrive, but at the same time it is rather concerning. At the same time, all empires eventually fall. Is this the beginning of the end of the American dream?
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The thing is Mike, long term none of this matters. The short term traders need to worry-we, less so.
What products will fair best in an environment with punitive tariffs? Technology. Why? Super high margins plus super high demand. We've discussed the maximum impact and it's immaterial.
Markets adjust. What you are seeing here is nothing but fear-we've seen it many times before and we will see it again. So as we enter headless chicken mode, smart investors stay the course, holding businesses with strong fundamentals. With those who can taking advantage of panic.
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I think many Americans are going to regret voting for him, I'm sure what he's doing is going to push prices up for them, and he appears to be alienating America from the rest of the world, well maybe not Russia and the likes.
Nice to see PHT holdings have rebounded today, when I looked earlier it was looking rather red, but now its a nice green, mostly.
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I think it’s a ploy to bring other countries in line. I’m agnostic but when you look at some of the trade situations it does appear odd. Europe do appear to hammer US imports. My opinion is a deal will be agreed and we move on.
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Trump will not want to be associated with a declining stock market and rising inflation….i bet there are deals to be made in the coming weeks
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my Coben s portfolio seems to have dropped 15% in a week hows everyone else feeling about riding this out?
@markiii said in Thoughts on short term market direction:
my Coben s portfolio seems to have dropped 15% in a week how's everyone else feeling about riding this out?
I'm only Holding PHT in Cobens which I assume is among the highest volatility and I am down 3.63% in week , ....its however down 15% since what looks now as a very brief peak this YTD around 19 Feb
Ride it out ? that rather depends if it ends....but I am staying in and that's thatIn other news , YTD I am down 3.3% This year so far all in mix of Vanguards Global and S&P500 trackers ( mid 6 fig ) hey-ho , again that's a hold for sure .
Main pension is a Db ( now deferred until I decide to start drawing ) .....so that helps me feel like I can just cruise . The optimist in me makes me think I should start drawing and take the 25% tax free lump and pile in at new cheap levels big time . Down side is it would all have to be in GIA , as ISA already allocated
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Nothing is down 15% in a week-fake news
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@markiii said in Thoughts on short term market direction:
my Coben s portfolio seems to have dropped 15% in a week how's everyone else feeling about riding this out?
I'm only Holding PHT in Cobens which I assume is among the highest volatility and I am down 3.63% in week , ....its however down 15% since what looks now as a very brief peak this YTD around 19 Feb
Ride it out ? that rather depends if it ends....but I am staying in and that's thatIn other news , YTD I am down 3.3% This year so far all in mix of Vanguards Global and S&P500 trackers ( mid 6 fig ) hey-ho , again that's a hold for sure .
Main pension is a Db ( now deferred until I decide to start drawing ) .....so that helps me feel like I can just cruise . The optimist in me makes me think I should start drawing and take the 25% tax free lump and pile in at new cheap levels big time . Down side is it would all have to be in GIA , as ISA already allocated
@PM3 said in Thoughts on short term market direction:
its however down 15% since what looks now as a very brief peak this YTD around 19 Feb
I concur with the above, overall the value of my portfolio is back to where it was at the start of November.
Hopefully things will settle down, and we can get back to happier markets.
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My portfolio is up today, by a whisker. Which is the first day in about a month that it hasn't fallen.
I suspect that when the Trump Tariff storm blows over and there is a ceasefire (and hopefully peace deal) in Ukraine/Russia then things will start to bob up again. Hopefully today is the start of this.
(Putting this comment in the 'Short term market direction' thread as it seems more appropriate here.)
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Tech +2.5%
IML +1%
PH Equity-down 0.56%Tech/IML have feared better than their benchmarks.
Nvidia is the technology barometer. Anyone interested should watch the GTC keynote March 18th. They will definitely talk about new developments, including I hope, an early Rubin release(6 months early). The Blackwell ultra, Rubin Ultra and probably Rubin-next. Robotics, ADAS, Quantum, health, sovereign ai, Omniverse. Plus HBM-4, Spectrum-X etc.