Trump is now in situ at the White House, and we know what to expect, or do we?
There is no doubt he will use tariffs as a bargaining tool, we just don’t know whether he’s going to buy Greenland, the Isle of Man or the Isle of Wight! Just to be clear, there are no substantiated rumours for the latter two, although they could be good places to build iconic golf courses!
The election of Trump is enthusing Chief Executives around the world as he has a pro-growth agenda, although it very much depends on which part of the world you live in as to how much you may benefit from his actions.
On the flip side to growth, there are fears that his policies are inflationary and that he would ramp up debt at the same time as raising tax allowances.
The dollar has strengthened on the back of his election and is expected to strengthen even further, but this creates a risk of its own, making exports more expensive. Some commentators expect the dollar to begin to weaken towards the back end of the year and into 2026. Understanding the implications helps us understand the likely dynamics when investing in certain assets.
Technology and its infrastructure stocks, particularly in the US, are loving Trump’s rhetoric of ‘America first’. The S&P 500 has hit a new high this week, but it may surprise you that European stocks followed suit also, attaining a record high, despite the avalanche of negative news flow in the press, particularly around tariffs.
On our agenda this week:
- CEOs more confident of growth this year
- US tech markets are booming
- The artificial intelligence arms race
- Reasons for the dollar being strong
- A consensus view for the dollar
- Could the dollar actually weaken?
- European stocks reach a record high
- UK growth will outstrip Germany, France and Italy says the IMF
- UK business closures hit a 20-year high
CEOs more confident of growth this year
According to PwC’s annual global survey, there is a surge in optimism towards the global economy, a significant rise from previous years (source: Investment Week).
Around 60% of CEOs expect global economic growth to rise in the next 12 months as they plan to increase headcount and continue rolling out artificial intelligence (AI). This marks a significant increase in optimism from previous years. In 2024 for example, only 38% of CEOs expressed hopes about global economic growth, while in 2023 the figure was 18%.
When it comes to the risk-facing companies this year, macroeconomics and volatility came out the highest at 29% and inflation was 27%.
Continues…
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Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.
