TEAM Asset Management

There were contrasting fortunes across global stock markets last week as investors weighed dovish signals from the Federal Reserve and hotter than expected inflation reports. The FTSE 100 was one of the strongest performers, rising 1.1% to hit a new record high, supported by gains in mining, retail and banking stocks.
The Federal Reserve’s annual economic summit for central bankers in Jackson Hole, Wyoming was the key for focus for markets during the week, especially Fed Chair Jerome Powell’s speech on Friday. Powell, and his colleagues at the Fed, have steadfastly resisted pressure from President Trump to cut interest rates due to concerns that tariffs will feed through to higher consumer price inflation in the US.
However, recent weakness in the jobs market has put policymakers in a more challenging position and Powell acknowledged that “the shifting balance of risks may warrant adjusting our policy stance”. Investors interpreted the remarks as a clear signal that the Fed will resume its rate cutting cycle and money market futures are now pricing in an 83% chance of a cut at its next meeting in September.

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TEAM | FTSE 100 Posts Its Best Week Since May There were contrasting fortunes across global stock markets last week as investors weighed dovish signals from the Federal Reserve and hotter than expected inflation reports. The FTSE 100 was

Confidence, and by extension sentiment, is a fragile thing.

We are currently hitting an air pocket in risk assets as the lens of the market has turned towards policy uncertainty, growth disappointments and a weakening labour market. This is bad news for growth-related companies that are (generously) priced to grow strongly into the future.

Crypto, leveraged ETFs, high beta, and high momentum stocks, the darling trades of 2024, are being vapourised.

The news headlines (designed to create ratings and pay for advertising) are flashing red, recession chatter is now incessant, and all the talk is of how far this ‘correction’ will go.

Spoiler alert: no one has a clue.

If we rewind the clock to the beginning of 2025, we noted:

-weak underlying breadth in the major US averages,
-a chasm in US valuation (expensive) differentials vs rest of the world,
-sell side strategist FOMO, evidenced by the huge lift-off in end of year S&P targets by Wall St,
-euphoric sentiment, shown by responses to the outlook for stock market prices over the next 12M,
-elevated risk positioning, evidenced by mutual fund, hedge fund, and retail skew towards US high growth sectors
-the Trump factor, (wildly unpredictable), and
-the spectre of significant US tax-related selling into April (forced selling of winning US stocks to pay domestic tax bills)…

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TEAM | The State of Play Confidence, and by extension sentiment, is a fragile thing. We are currently hitting an air pocket in risk assets as the lens of the market has turned towards policy uncertainty, growth dis

Only three months ago, widespread discontent over the perilous state of Europe’s largest economy led to the collapse of Germany’s coalition government, paving the way for snap elections in February 2025 and striking another body blow for a country already struggling to attract global capital.

Last night, the new German coalition unveiled plans for what has been called the biggest and fastest fiscal policy shift in post German unification history.

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TEAM | MEGA Not MAGA Only three months ago, widespread discontent over the perilous state of Europe’s largest economy led to the collapse of Germany’s coalition government, paving the way for snap elections in Fe

Markets have quickly become accustomed to the noise and volatility under Trump 2.0, but last week saw the biggest gyrations yet as a deepening rift between America and its allies over tariffs and Ukraine underscored that there is a new world order for markets to navigate. High-flying technology stocks, including the “Magnificent Seven”, were most exposed and the Nasdaq Composite Index fell 4.9%, pushing it into negative territory for the current year to date.

Tech stocks have been under a cloud since the emergence of China’s DeepSeek, an artificial intelligence (AI) powered chatbot, in January called into question whether US companies will continue to dominate the sector. Nvidia, the manufacturer of the advanced chips required to build AI infrastructure, has been one of the biggest winners, propelling it become the most valuable company in the world earlier in the year with a market capitalisation of $3.6 trillion.

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TEAM | Tariffs Send Markets Into a Spin Markets have quickly become accustomed to the noise and volatility under Trump 2.0, but last week saw the biggest gyrations yet as a deepening rift between America and its allies over tariffs