The Market Call

Headline grabbing Trump noise from Washington has died down but with concerns around tariffs, and issues in the Ukraine and the Middle East still not settled, Jeremy and Gareth discuss the common theme this week which has been central bankers and companies talking about trade related uncertainty.

Overall the forecasts of GDP growth in the major economies in the world are coming down, but inflation expectations remain heightened. Big US corporates such as Nike and FedEx cited trade uncertainty as a major issue and it’s been referenced increasingly in UK RNS announcements.

With US focus seemingly now more on longer term interest rates than the level of the US stock market, overriding market sentiment is one of capital flight from the US to the rest of the world. A survey documenting the capital allocation intentions of the world's largest asset managers listed the biggest one month allocation away from US equities ever recorded. Some has gone to Germany and the wider European market, some has gone into China and there's also been a big allocation into US treasuries. Although there's no direct evidence of much of this capital finding its way into the UK market yet, Jeremy and Gareth remain hopeful!

In the UK, Gareth talks about Beeks (BKS) and FDM who both had results. Employment data this week was pretty much as expected. However UK government borrowing data was running ahead of expectations,which doesn’t bode well for next week's Spring Statement and the brewing government dispute about whether they should continue to look to raise taxes or to reduce government spending.

Next week we have UK inflation data on Wednesday, and on Friday we get US PCE data (the Federal Reserve’s preferred inflation measure).

Brought to you by Progressive Equity. 

This week, Jeremy and Gareth mull over the macro situation - the US economy seems to be slowing (but inflation persists) while Europe, especially Germany, has been bullied into spending more than ever. 

The UK, and arguably Europe, haven't yet seen much benefit from the outflow of capital from the MAG Seven, but remember, the whole German market cap is not dissimilar to the value of Microsoft - so there's a lot more to go for.

UK companies discussed include STV, Forterra, Van Elle, Secure Trust Bank, Cakebox, Care REIT, Hornby and Science Group/Ricardo. 

Next week the big news is around inflation - hope for no upside surprises (especially from Tokyo). 

Brought to you by Progressive Equity. 

This week, Gareth and Jeremy try to keep up with the gyrations from across the Atlantic - both around defence alliances and tariff policies.

In terms of the impact on Europe and the UK, Germany is stepping up and spending big, which is driving up both (European) stock markets and (German) borrowing costs.  Trump seems to be ignoring the stock market and is probably happy that US borrowing costs are falling - crucial for the upcoming refinancing of a significant chunk of US government debt.  

Closer to home, Severfield is seeing tough conditions which reflect a sluggish broader economy, and XP Power's £41m raise shows that UK markets aren't completely closed.  

Next week, we'll discuss US jobs data and inflation...unless Trump 2.0 delivers another surprise! 

Brought to you by Progressive Equity. 

Jeremy and Gareth talk this week about Trump 2.0 launching with a number of "adults in the room" who Trump trusts, and who can get things done.

One thing that might get done is a US/UK trade deal...Jeremy describes how the stars could align, and how the UK's separation from Europe might save us from the worst of Trump's tariffs.

Absent much other UK stock news, Jeremy talks about LSEG, whose results demonstrate just how small the London Stock Exchange actually is, relative to the rest of the group's business. This leads to discussion of the US, where the OTC is generating real interest, and Singapore, where the authorities are actively promoting local investment and local listings.

Next week is jobs week in the USA...fingers crossed that all is well.

Brought to you by Progressive Equity. 

This week, Gareth and Jeremy catch up on the week that marked one full month since Trump's return to the White House.

Following JD Vance's lecture to Europe in Munich, the US initiated peace talks with Russia in Riyadh. This confirmed that the old world order has moved to a new one involving power projection by strong men operating in their own economic and strategic interests. Europe, the UN, and NATO are not involved.

Starmer's meeting with Trump will be a career-defining event for him and a pivotal opportunity for the UK as a potential bridge between the US and the rest of Europe at this critical juncture for the West.

It also represents Trump's desire to tidy up Ukraine and Gaza to get to his main match-up, the strongman heavyweight contest between the US and China. 

Xi has been boosting China's stock market and technology sector through a symbolic handshake with Jack Ma at a conference this week. The pair infamously fell out in 2021, with Ma disappearing from public view for a few years.   

Alibaba shares and the wider Chinese stock market have performed much better than the US Mag Seven over the last month but remain well below their peak values of 4 years ago.

Gold had another strong week, and Trump says he is going to Fort Knox to check that the gold is still there. Gold and real assets have become more central to investor options as bonds have lost their appeal as risk-off assets in a more inflationary world. 

Japan records much higher inflation, which seems to require much higher rates. However, the yen carry trade worries of last summer have not recurred.

In the UK, there remains mixed economic data, but, on balance, there is less likelihood of significantly lower rates soon as inflation trends up for the next few months.     

Gareth runs through the week in company news, with caution from Thruvision and Zoo Digital and positive updates from Oxford Metrics, Beeks and Springfield Property.

The main event will be the German election on Sunday, which will have consequences for wider European politics, but don't expect things to happen quickly. 

There are some US GDP and PCE inflation data, but the headlines will likely remain dominated by politics, with Starmer's trip to DC and Trump checking his gold reserves in Texas. 

Brought to you by Progressive Equity. 

This week, Gareth and Jeremy tackle the investment implications of Trump 2.0. After shocking the world with his suggestion of turning Gaza into the Riviera of the Middle East, Trump has moved on to Ukraine. Such events illustrate how the accepted World order has broken down. Where is the UN in all of this?

One outcome has been a new all-time high in the gold price, indicating heightened risks and uncertainties for global investors. The US inflation data also came in hot. Yet, counter-intuitively, it didn't dent the gold bull market, indicating perhaps investor concerns over policy errors or breakdown in the relationship between the Treasury and the Fed.

Relative to other monetary metals, gold looks expensive, and silver or platinum might offer better opportunities to protect against fiat money debasement. Not advice; do your own research. 

China's equity values have recovered strongly after the Deep Seek AI revelations. Alibaba's stock has risen over 40% in less than a month, indicating the impact of the dispersal trade.

The UK economy unexpectedly grew in Q4 last year. While negative sentiment surrounds the economy, UK assets remain relatively attractive to global investors.

This week, one example of how the UK government prioritises economic growth is emerging in the newsflow of the motor finance and retail sectors.

With significant exposure to car loans, Close Brothers and SU made constructive updates this week, indicating that motor finance might avoid the protracted drag on consumer lending that PPI became. 

Gareth covers the impact of government policy on Secure Trust Bank and Vertu Motors.   

Looking ahead, we will get UK inflation data next week, which is likely to indicate a flat annual rate of 2.5%. 

Also, we get Japanese inflation data, and the accompanying risk of the yen carry-trade unwind.

Brought to you by Progressive Equity. 

This week, Gareth is joined by Progressive's Building & Construction analyst, Alastair Stewart. 

The pair muse on Trump's tariff-based discussions with various world leaders, with Xi Jinping (the obvious and most-dangerous outlier) adding a bit of Chinese spice to the mix, with some largely-unreported moves.  Alastair describes the UK building stocks, and their reaction to the Bank of England's rate cut, as well as some (good and bad) fundamental drivers of sector activity. 

Progressive clients with news included tinyBuild and STV Group. 

Next week we have US inflation and both UK and EU GDP...which could put this week's halving of expectations in context...

Brought to you by Progressive Equity.  

With Jeremy enjoying sunnier climes, Gareth is joined by George O'Connor, the Progressive tech analyst. 

The week has been dominated by DeepSeek's sudden unveiling of a low-cost Chinese-created competitor in the AI (large language model) world.  George provides some useful perspective on what this means more broadly.  If the Magnificent Seven US tech names lose some of their lustre, the much-vaunted dispersal trade might follow, as investors look to move capital elsewhere...maybe even as far as the UK market. 

The pair discuss SThree, Manpower, FDM, Sage & Computacenter, and Progressive clients Idox and Van Elle (both with relatively upbeat updates).

Next week we have the Bank of England rate decision on Thursday, sandwiched by US PMI data earlier in the week and employment (non-farm payrolls) due on Friday.  Unless China drops another (figurative) bombshell in the meantime...

Brought to you by Progressive Equity.  

Jeremy and Gareth talk through the first week of Trump's second term - tariffs are delayed and perhaps downgraded, and Donald has told the Davos attendees how to grow their economies so they can pay for NATO. 

Closer to home, Rachel Reeves is unveiling policy after policy designed to spur growth...can it last? And can it work?   

This week saw a slew of announcements from UK stocks - builders are doing better than retail, and in the Progressive camp, both Intuitive Investments Group and SRT Marine caught our attention.

Next week, we have US and European interest rate decisions, and US inflation...Donald will surely have something to say!

Brought to you by Progressive Equity.  

With peace breaking out in the Middle East, and Trump taking back the keys to the White House, the world is changing fast...

Jeremy and Gareth discuss the ways that the USA is causing trouble for other countries - and Rachel Reeves.  But some benign inflation data rode to the rescue, and UK companies reporting "in line" trading are putting on double-digit percentage price gains: perhaps too much negativity is priced in??

We discuss Genus, Trustpilot, Hunting and Vistry, as well as Progressive clients Petro Matad, Xaar and Gamma. 

Next week, watch for Japanese inflation - and their interest rate decision.

Brought to you by Progressive Equity.