Hotter AT Home

I hope you have all been enjoying the balmy weather.  I’ve just returned from two weeks in Majorca and must confess that it was slightly irritating to see it was actually hotter in Chester. Still, mustn’t grumble.

Some semblance of order appears to have been restored to the major sporting events recently with Vettel winning at Silverstone, Djokovic regaining his Wimbledon crown and the highly fancied French team rather annoyingly securing the World Cup.  No one really thought it was ‘coming home’, did they?  Insufficient Everton players in the England squad if you ask me!

I returned from holiday to see the Government still in turmoil over Brexit (yawn) and Donald over here displaying his unique brand of diplomacy, as well as keeping the Queen waiting for their appointment.  He has apparently left the UK en route for Scotland!  From there he travels to Helsinki to meet with Putin and receive further instructions.

The markets appear to be in exactly the same position as before I went away, seemingly unable to fathom out the direction of Brexit policy and waiting with baited breath to see if Trump will get really serious with his trade war. Furthermore, the woes on the high street continue, with worrying noises surrounding Debenhams.  I hope these prove unfounded because the thought of Chester without Browns horrifies me.

I confess to a degree of sympathy for Mrs May, who’s trying to appease the hard-right Tory nutters (and Donald), while at the same time trying not to spook the markets. Good luck with that.

Trump’s shenanigans are arguably a greater threat to global stock markets. Geopolitical events invariably cast a shadow over markets, but it is relatively rare for them to manifest into something that affects the economic cycle. A ramping up of tariffs could do so.  For decades, economies and markets have quietly benefited from freer movement of goods, capital and labour. This is a trend that has not only been halted but reversed.  Currently the impact of $20BN of tariff costs on a $20TR economy will be trivial but it does nothing to aid the smooth running of the system. It will be interesting to observe voters’ reaction as the repercussions are felt. Already, mid-Western soybean growers are grumbling as soon might the blue collar shoppers of Walmart where 70-80% of goods are sourced from China.

As always, interesting times. I like to think I’m a decent financial adviser but fund management is not my job and I’m eternally grateful that some years ago we took the decision to out-source all investment decisions to industry experts.  I’m going to meet them in London tomorrow for our quarterly review and hope they can navigate a path through the fog.

I’ll keep you posted.

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