Tag: Trump

Posted on

Trump’s self-imposed August tariff deadline looms

U.S. Tariffs

Since a little after Donald Trump’s declaration of ‘Liberation Day’ and renewed tariff threats, global markets have shown a remarkable degree of indifference.

While equities dipped briefly in April, investors appear increasingly unshaken by the looming 1st August deadline.

Several factors underpin this resilience. First, market participants have grown accustomed to political brinkmanship.

Traders now view tariff announcements as bargaining tools rather than certainties, adopting a wait-and-see approach before pricing in long-term consequences.

The episodic nature of past trade spats has dulled their impact, especially without immediate legislative backing and with Trump often pulling back last minute or extending deadlines.

The media have labelled this … TACO!

TACO – Trump Always Chickens Out: Definition – A satirical acronym coined by financial commentators to describe Donald Trump’s predictable pattern of announcing aggressive tariffs, then softening or delaying them under market pressure.

Second, economic fundamentals remain firm. Corporate earnings continue to surpass expectations, and key indicators—such as job growth and consumer spending—suggest sustained momentum in major economies.

As a result, the tariff narrative has taken a back seat to earnings reports and central bank manoeuvres.

Third, diversification strategies have matured since the 2018–2020 trade wars. Many multinationals have already restructured supply chains, buffered risk through regional trade agreements, and hedged exposure to volatile sectors.

This strategic evolution makes markets less sensitive to unilateral tariff threats, especially if they lack multilateral support.

Analysts note that Trump’s rhetoric still carries weight politically, but the financial world operates on evidence, not headlines. As one strategist quipped, ‘Markets don’t trade on bluster; they trade on impact’.

That’s all very well – but markets can be fickle and reflect sentiment too.

With investors focused on earnings and monetary policy, tariff drama may remain background noise—unless policy becomes policy.

Until then, the markets seem content to roll with it!

Posted on

Markets appear to dismiss Trump’s tariff threats – but will this prove to be unwise?

Super Chicken

Despite President Donald Trump’s renewed push for sweeping tariffs, global markets appear unfazed.

Trump issued letters to 14 countries – including Japan, South Korea, and Malaysia—outlining new import levies ranging from 25% to 40%, set to take effect on 1st August 2025. More letters then followed.

Yet, major indices like the FTSE 100 and Nikkei 225 barely flinched, with some even posting modest gains.

So, who’s right—the president or the markets?

Trump insists tariffs are essential to redress trade imbalances and bring manufacturing back to the U.S. The EU also faces higher tariffs.

He’s floated extreme measures, including a 200% tariff on pharmaceuticals and a 50% levy on copper.

His administration argues these moves will strengthen domestic industry and reduce reliance on foreign supply chains.

However, investors seem to be betting on a familiar pattern: Trump talks tough but ultimately softens under pressure. Analysts have dubbed this the ‘TACO’ trade—Trump Always Chickens Out.

His own comments have added to the ambiguity, calling the August deadline ‘firm, but not 100% firm’.

The economic logic behind the tariffs is being questioned. Tariffs are paid by importers—often U.S. businesses and consumers—not foreign governments.

This could lead to higher prices and inflation, especially in sectors like healthcare and electronics. Some economists warn of recessionary risks for countries like Japan and South Korea.

In short, markets may be right to remain calm—for now. But if Trump follows through, the impact could be far-reaching.

With trade negotiations still in flux and only two deals (UK and Vietnam) finalised, the next few weeks will be critical. Investors may be wise not to ignore the warning signs entirely.

Whether this is brinkmanship or a genuine shift in trade policy, the stakes are high—and the clock is ticking.

Posted on

Elon Musk launches ‘America Party’ amid ongoing feud with Trump

America Party

In a dramatic twist to the U.S. political landscape, Elon Musk has announced the formation of a new political party, the America Party, following a bitter fallout with President Donald Trump over his controversial tax and spending legislation – the ‘Big Beautiful Bill‘.

Musk, once a key ally of Trump and head of the Department of Government Efficiency (DOGE), broke ranks after the passage of the so-called ‘Big Beautiful Bill‘, which Musk labelled a “disgusting abomination” that would balloon the national debt by trillions.

On U.S. Independence Day, Musk polled his followers on X, asking whether a new party should be formed. With a 2-to-1 majority voting ‘yes’, Musk declared, ‘Today, the America Party is formed to give you back your freedom’.

The party aims to challenge the entrenched two-party system by targeting a handful of swing Senate and House seats, potentially becoming a decisive force in future legislation.

Musk has pledged to support primary challengers against Republicans who backed the bill, accusing them of betraying fiscal responsibility.

Trump, clearly irked, dismissed Musk’s move as ‘ridiculous’, reportedly stating, ‘It’s always been a two-party system… third parties have never worked’.

He added on Truth Social, ‘Elon Musk has gone completely off the rails… becoming a train wreck over the past five weeks’.

The feud has escalated rapidly, with Trump threatening to revoke federal subsidies for Musk’s companies and even suggesting deportation, despite Musk’s U.S. citizenship.

While Musk’s America Party faces steep legal and logistical hurdles, his immense wealth and online influence could make it a disruptive force.

Whether it gains traction or fizzles out remains to be seen but it’s clear the ‘love’ between Musk and Trump is officially over.

Posted on

U.S. debt surges close to $37 trillion after ‘Big Beautiful Bill’ -Elon Musk sounds alarm

High U.S. debt levels

Following the passage of President Donald Trump’s sweeping tax and spending legislation, dubbed the One Big Beautiful Bill, the U.S. national debt has officially soared to nearly $37 trillion, with projections suggesting it could hit $40 trillion by year’s end.

The bill, which extends 2017 tax cuts and introduces expansive spending on defence, border security, and domestic manufacturing, has sparked fierce debate across Washington and Wall Street.

Critics argue the legislation lacks meaningful offsets, with no new taxes or spending cuts to balance its provisions.

Interest payments alone reached $1.1 trillion in 2024, surpassing the defence budget. The Congressional Budget Office estimates the bill could add $3.3 trillion to the deficit over the next decade.

Among the most vocal opponents is tech billionaire Elon Musk, who previously served as head of the Department of Government Efficiency (DOGE).

Musk has labelled the bill a ‘disgusting abominatio’ and warned it undermines fiscal responsibility.

He has reportedly pledged to fund primary challengers against Republicans who supported the measure, accusing them of betraying their promises to reduce spending.

Musk’s concerns go beyond economics. He argues the bill reflects a broken political system dominated by self-interest, calling for the creation of a new political movement, the America Party, to restore accountability.

While the White House insists the bill will spur economic growth and eventually reduce the debt-to-GDP ratio, sceptics remain unconvinced.

With the debt ceiling raised by a record $5 trillion, the long-term implications for America’s financial stability are now front and centre.

As the dust settles, the clash between Trump’s fiscal vision and Musk’s warnings sets the stage for a turbulent political and economic period ahead.

Posted on

Trump shifts tariff ‘goal posts’ again and targets BRICS with extra 10% levy

Goal posts moved

In a fresh escalation of trade tensions, President Donald Trump has once again moved the goalposts on tariff policy, pushing the deadline for new trade deals to 1st August 2025.

This marks the second extension since the original April 2025 ‘Liberation Day’ announcement, which had already stirred global markets.

The latest twist includes a new 10% tariff targeting countries aligned with the BRICS bloc—Brazil, Russia, India, China, and South Africa – along with newer members such as Iran and the UAE.

Trump declared on Truth Social that ‘any country aligning themselves with the Anti-American policies of BRICS will be charged an ADDITIONAL 10% tariff. There will be no exceptions’.

The move has drawn sharp criticism from BRICS leaders, who condemned the tariffs as ‘indiscriminate’ and warned of rising protectionism. Industrial metals, including copper and aluminium, saw immediate price drops amid fears of disrupted supply chains.

While the White House insists the new deadline allows more time for negotiation, analysts warn the uncertainty could dampen global trade and investor confidence.

With letters outlining tariff terms expected to be sent this week, investors and market makers watch closely as Trump’s trade strategy continues to evolve or unravel.

Posted on

From Missiles to Tariffs: A desensitised stock market faces Trump’s new world

Markets desensitised to U.S. policy making

In years past, the mere hint of U.S. airstrikes or heightened geopolitical tension would send global stock markets into panic mode.

Yet, following President Trump’s re-election and his increasingly aggressive foreign policy stance, investor reactions have become notably muted.

From missile strikes on Iranian nuclear sites to an orchestrated ceasefire between Iran and Israel, markets have barely flinched. The question arises: are investors becoming desensitised to Trump’s geopolitical theatre?

Take the latest skirmish between Iran and Israel. After nearly two weeks of missile exchanges, Trump’s announcement of a ‘complete and total ceasefire’ barely nudged the S&P 500.

That calm came despite the U.S. launching pre-emptive strikes on Iranian facilities and absorbing retaliatory attacks on its military base in Qatar.

In another era, or under a different administration even, such developments might have triggered a broad risk-off sentiment. Instead, Wall Street just shrugged.

One reason may be fatigue. Trump’s approach – rife with tariffs, sanctions, and sudden reversals – has bred a kind of market immunity.

Investors, well-versed in the rhythm of Trump’s provocations, have begun treating them as background noise. His revived tariff agenda, particularly the threats aimed once again at China and EU auto imports, has likewise failed to prompt major selloffs.

Similarly, the ongoing Russia-Ukraine conflict, once a source of intense volatility, now registers as a strategic stalemate in the market’s eyes.

While Trump’s rhetoric surrounding Ukraine has shifted unpredictably, investors appear more focused on earnings, inflation data, and central bank signals than on diplomatic fallout and war!

This is not to suggest markets are indifferent to geopolitical risk, but rather that they’ve adapted. Algorithmic trading models may be increasingly geared to discount Trump’s headline-grabbing tactics, while institutional investors hedge through gold, volatility indices, or energy plays without dumping equities outright.

Critics argue this detachment is dangerous. Should a flashpoint spiral out of control, be it over Hormuz, Ukraine, or Taiwan, the slow-boiling complacency could leave portfolios badly exposed.

Still, for now, Trump’s policies are being priced in not with panic, but with complacency maybe.

The real story may not be what Trump does next, but how long the markets can continue to look away.

Trump announces he had brokered ceasefire between Israel and Iran?

Tensions between Israel and Iran reached a boiling point after 12 days of cross-border missile and drone strikes.

The situation escalated further when U.S. forces under President Trump launched targeted airstrikes on key Iranian nuclear sites, Fordow, Natanz, and Isfahan, prompting a direct Iranian missile response on a U.S. base in Qatar.

In a dramatic turn, President Trump announced what he called a ‘Complete and Total CEASEFIRE‘ – announced on Truth Social. According to Trump’s plan, Iran would begin the ceasefire immediately, with Israel to follow 12 hours later.

The truce would reportedly be considered complete after 24 hours if all attacks stopped.

While Trump touted the ceasefire as a triumph of ‘peace through strength’, analysts questioned the ceasefire’s enforceability – especially since missile exchanges reportedly continued despite the announcement.

Nonetheless, Trump claimed credit for halting the region’s slide into all-out war without committing to prolonged U.S. military involvement.

Critics argue Trump’s strategy relies more on military pressure and media theatrics than diplomatic engagement.

Supporters counter that his boldness forced both sides to the table. Either way, the world is watching to see whether this fragile peace endures – or erupts again in fire.

If this turns out to be a masterstroke in political brinkmanship – hats off to Trump, I guess. Whichever way you look at it, the precision U.S. strike on Iran was exactly that – precision. And, you have to take note.

Iran has been weakened, and this may even influence Russia’s war on Ukraine. Hopefully Israel with Palestine too – regardless of stock market reaction.

And that has to be a good thing!

But has Israel finished their war?

Despite all the noise regarding stock market reaction, one thing is for certain – the anxiety and worry for the people of the Middle East is unquestionable.

It’s not a happy time.

Posted on

U.S. holds interest rates steady – Trump isn’t happy!

U.S. Interest Rate

U.S. Federal Reserve has kept its benchmark interest rate steady at 4.25% to 4.50% for the fourth consecutive meeting.

This decision reflects a cautious stance amid ongoing uncertainty surrounding President Trump’s tariff policies and their potential impact on inflation and economic growth.

The Fed still anticipates two rate cuts later in 2025, but officials are split – some expect none or just one cut.

Inflation projections have been revised upward to 3.0% for 2025, while economic growth expectations have been trimmed to 1.4%.

U.S. President Donald Trump has been sharply critical of Federal Reserve Chair Jerome Powell, especially following the Fed’s decision on June 18, 2025, to keep interest rates steady.

He’s called Powell ‘a stupid person’, ‘destructive’, and ‘Too Late Powell’. accusing him of being politically motivated and slow to act on rate cuts.

And the Federal Reserve is supposed to act independently of political influence.

Posted on

UK economy shrank in April 2025

UK flag on a squeezed bottle

The UK economy contracted by 0.3% in April 2025, a sharper decline than the 0.1% forecast by economists, according to the Office for National Statistics (ONS).

The unexpected downturn has raised fresh concerns about the country’s economic resilience amid rising costs and global trade tensions.

April’s contraction was driven by a combination of domestic and international pressures. A significant rise in employers’ National Insurance contributions, coupled with increases in water, energy, and council tax bills, placed added pressure on businesses and households.

Simultaneously, newly imposed U.S. tariffs, introduced by President Trump, led to the steepest monthly drop in UK exports to the United States on record.

Services and manufacturing, which together form the backbone of the UK economy, both saw declines.

Legal and real estate sectors were particularly affected, following a surge in house sales in March 2025 ahead of stamp duty changes. Car manufacturing also faltered after a strong first quarter.

Despite the monthly setback, UK GDP still grew by 0.7% over the three months to April 2025, suggesting some economic activity may have been pulled forward earlier in the year.

Chancellor Rachel Reeves reportedly acknowledged the figures were ‘clearly disappointing’ but reaffirmed her commitment to long-term growth through strategic investments in infrastructure, housing, and energy.

While April’s figures may not signal an immediate crisis, they underscore the fragility of the UK’s recovery.

With UK inflation still above target and interest rates elevated, the UK government faces a delicate balancing act to sustain momentum without stifling growth.

Posted on

U.S. inflation up 0.1% in May – but less than expected

U.S. inflation

In May 2025, U.S. inflation rose by 0.1% from the previous month, bringing the annual inflation rate to 2.4%, slightly below economists’ predictions of 2.5%.

Core U.S. inflation, which excludes food and energy, increased by 0.1% month-on-month, with a year-on-year rate of 2.8%.

The modest rise was largely offset by falling energy prices, particularly a 2.6% drop in petrol, which helped keep overall inflation in check.

Prices for new and used vehicles, as well as apparel, also declined. Meanwhile, food and housing (shelter) costs each rose by 0.3%, with housing (shelter) being the primary contributor to the monthly increase.

Despite President Trump’s sweeping tariffs introduced in April 2025, their inflationary impact has yet to fully materialise. Analysts suggest that many companies are still working through pre-tariff inventories, delaying price hikes for consumers.

However, economists caution that the effects may become more pronounced in the coming months.

The Federal Reserve is expected to hold interest rates steady for now, as U.S. policymakers monitor whether inflation remains contained or begins to accelerate due to trade-related pressures.

Markets responded positively to the data, with stock futures rising and Treasury yields falling.

So, while inflation remains above the Fed’s 2% target, May’s figures suggest a temporary reprieve.

The summer could yet tell a different story.

Posted on

What exactly is Trump’s ‘Big Beautiful Bill’ that Musk hates so much?

Big Beautiful Bill

Trump calls it his ‘Big Beautiful Bill’, but Musk calls it a ‘Disgusting Abomination’ – who’s right?

Trump’s Big Beautiful Bill is a sweeping tax and spending package aimed at making his 2017 tax cuts permanent while introducing new tax breaks and budget reforms.

It eliminates taxes on tips and overtime, raises the State and Local Tax (SALT) deduction cap, and creates government-funded savings accounts for newborns.

The bill also imposes stricter Medicaid work requirements, cuts funding for green energy incentives, and repeals taxes on gun silencers and indoor tanning.

Critics, including Elon Musk, argue it will increase the budget deficit by $2.5 trillion, burdening future generations with unsustainable U.S. debt.

Musk’s opposition to the Bill

Elon Musk has fiercely opposed Trump’s Big Beautiful Bill, calling it a “disgusting abomination”.

His main concerns include:

Massive Spending & Deficit Growth: Musk argues the bill adds $2.5 trillion to the federal deficit, saddling future generations with unsustainable debt.

Pork-Filled Legislation: He claims the bill is packed with wasteful spending that benefits political allies rather than the American people.

Cuts to EV & Solar Incentives: The bill removes tax credits for electric vehicles and solar energy, which directly impacts Tesla and Musk’s clean energy initiatives.

Unfair Favouritism: Musk believes the bill protects oil & gas subsidies while cutting incentives for renewable energy.

Lack of Transparency: He insists the bill was rushed through Congress without proper review, saying even lawmakers barely had time to read it.

Trump, on the other hand, has dismissed Musk’s criticism, saying he’s “very disappointed” and believes Musk is upset mainly because of the EV tax credit removal.

The feud continues to escalate, with Musk urging lawmakers to “kill the bill.”

Who does the Bill really benefit?

Posted on

Trump and Musk feud – love to hate in 137 days – a billionaire brawl

Trump Musk Argue

It’s a worry – arguably the most powerful man in the world and the richest man in the world in a highly visible fallout.

Unrest and distrust at the top of U.S. government and the and in the corporate world – so what’s new?

Donald Trump and Elon Musk, once allies, have engaged in a heated public feud over a tax and spending bill. The conflict began when Musk criticised Trump’s “Big Beautiful Bill,” calling it a “disgusting abomination” and warning it would increase the budget deficit. Trump retaliated on Truth Social, calling Musk “CRAZY” and threatening to terminate billions of dollars in government contracts for his companies.

Musk fired back on X, claiming Trump would have lost the election without his support and accusing him of being named in the unreleased Epstein files.

The spat has had financial repercussions, with Tesla’s stock plummeting over 14%, wiping out $152 billion in market value. Investors fear the fallout could impact Tesla’s regulatory environment under Trump’s administration.

Tesla 5-day chart

Tesla 5-day chart – 14% fall

Political figures have weighed in, with billionaire Bill Ackman urging the two to reconcile, while Steve Bannon suggested Trump should seize SpaceX under the Defence Production Act. Musk also polled followers on whether to create a new political party, gaining support from Mark Cuban and Andrew Yang.

It got worse

Elon Musk escalated his feud with Donald Trump by making explosive claims that Trump appears in the Epstein files, suggesting that this is why they have not been made public. Musk posted on X, “Time to drop the really big bomb: Donald Trump is in the Epstein files. That is the real reason they have not been made public.

“Have a nice day, DJT!”. He later doubled down, telling followers to “mark this post for the future” and insisting that “the truth will come out”.

Trump has denied any wrongdoing and dismissed Musk’s claims as retaliation for his tax bill. The White House press secretary called Musk’s comments “an unfortunate episode” and insisted that Trump is focused on passing his legislation.

Musk also endorsed a call for Trump’s impeachment, agreeing with a post that suggested Vice President JD Vance should replace Trump. This marks a dramatic shift, as Musk was previously a close ally of Trump and even held a government advisory role.

The feud continues to escalate, with Musk calling for the bill’s rejection and Trump defending it as a historic tax cut.

The position and authority of U.S. President Trump have been challenged. How will tariff trade negotiations and his standing with other world leaders progress from here?

I do have a couple of questions: why did Musk back Trump in the first place and, at what point in the 137 ‘love in’ days did he know about the Epstein link (if indeed there is one)?

Or did he know before?

Who to trust?

Posted on

Well – that didn’t last long – is the ‘love in’ over already?

Elon Musk and Trump

Elon Musk has dramatically distanced himself from Donald Trump’s latest tax-and-spending bill, branding it a ‘disgusting abomination’ in a fiery post on X.

The Tesla and SpaceX CEO, once a key financial backer of Trump’s 2024 campaign, has now turned against the administration’s ‘One Big Beautiful Bill’, warning that it will explode the federal deficit and burden American taxpayers with unsustainable U.S. debt.

Musk’s frustration boiled over as he accused lawmakers of reckless spending, calling out those who voted for the bill: ‘Shame on you. You know you did wrong’.

His criticism comes just days after leaving his role as head of the Department of Government Efficiency (DOGE), where he had pushed for aggressive cost-cutting measures.

The White House, however, remains unmoved. Press Secretary Karoline Leavitt dismissed Musk’s remarks, insisting that Trump is ‘sticking to it’ and that the bill will drive economic growth.

With Republican deficit hawks rallying behind Musk’s concerns, the billionaire’s influence in Washington is far from over.

His next move? Firing back at politicians who, in his words, ‘betrayed the American people.’

Elon Musk’s fiery critique of Trump’s ‘One Big Beautiful Bill’ has raised concerns for the Department of Government Efficiency (DOGE), an initiative he once led.

His departure from DOGE signals instability (much of which he created) within the agency, which had been pushing for aggressive cost-cutting measures and anti-waste policies.

Without Musk’s influence, DOGE could lose traction, allowing excessive spending to go unchecked. Additionally, Musk’s fallout with Trump might weaken DOGE’s ability to implement reforms, as its credibility is tied to his vision.

The question now is whether DOGE can remain a force for fiscal responsibility, or whether it will become just another bureaucratic arm.

Mid-terms are coming!

Posted on

China’s manufacturing sector experiences decline amid Tariff chaos

China factory data

China’s manufacturing activity took an unexpected hit in May 2025, marking its steepest decline since September 2022.

The Caixin/S&P Global manufacturing PMI fell to 48.3, signalling contraction for the first time in eight months. This downturn comes as U.S. tariffs begin to weigh heavily on Chinese exports, dampening global demand and disrupting supply chains.

The latest data reveals that new export orders shrank for the second consecutive month, hitting their lowest level since July 2023.

Factory output also contracted for the first time since October 2023, reflecting the broader economic slowdown. Analysts attribute this slump to the reinstatement of sweeping U.S. tariffs, which were briefly halted before being reimposed by a federal appeals court.

Despite a temporary trade truce between the U.S. and China, tensions remain high, with both sides accusing each other of violating agreements.

The uncertainty surrounding trade policies has led Chinese manufacturers to cut jobs at the fastest pace since the start of the year, further exacerbating economic concerns.

China’s Premier Li Qiang has hinted at new policy tools, including unconventional measures to stabilise the economy. However, with tariffs set to remain high and structural challenges persisting, experts predict continued pressure on China’s industrial sector.

As the world’s second-largest economy grapples with these headwinds, the coming months will be crucial in determining whether Beijing can implement effective strategies to counteract the impact of tariffs and restore manufacturing momentum.

Caixin/S&P Global manufacturing PMI survey

The report was based on the Caixin/S&P Global manufacturing PMI survey, which is a private-sector survey that tracks China’s manufacturing activity.

This survey is conducted mid-month and covers over 500 mostly export-oriented businesses, making it distinct from China’s official PMI, which samples 3,000 companies and is compiled at month-end.

The Caixin PMI tends to focus more on small and medium-sized enterprises, whereas the official PMI aligns more closely with industrial output.

In May, the Caixin PMI fell to 48.3, marking its first contraction in eight months. The decline was largely driven by shrinking new export orders, which hit their lowest level since July 2023.

The survey also showed that employment in the manufacturing sector declined at the fastest pace since January, reflecting the broader economic slowdown.

One key difference between the Caixin PMI and the official PMI is their timing. The Caixin survey is conducted earlier in the month, meaning it may not fully capture policy changes or trade developments that occur later.

For example, economists noted that the effect of the tariff de-escalation in mid-May may not have been reflected in the Caixin PMI results

Posted on

Trump’s tariffs challenged in court and deemed to be illegal

U.S. tariff court ruling

A U.S. federal court has ruled that former President Donald Trump’s sweeping tariffs were imposed illegally, dealing a significant blow to his economic policies.

The Court of International Trade determined that Trump exceeded his authority by invoking emergency powers to justify tariffs on nearly every country.

The ruling states that the U.S. Constitution grants Congress exclusive power to regulate commerce, meaning the president cannot unilaterally impose such broad trade restrictions.

The decision immediately halted the 10% tariffs Trump had imposed on most U.S. trading partners, as well as additional levies on China, Mexico, and Canada.

The court found that the International Emergency Economic Powers Act (IEEPA), which Trump cited as justification, does not grant him the authority to implement such sweeping trade measures.

The White House swiftly filed an appeal, arguing that the tariffs were necessary to address trade imbalances and safeguard American industries.

However, businesses and state governments that challenged the tariffs welcomed the ruling, citing concerns over inflation and economic harm.

Dow Jones Industrial Average Futures 28th & 29th May 2025 after the court ruling

Dow Jones Industrial Average Futures 28th & 29th May 2025 after the court ruling

Markets responded positively to the decision, with stock futures rising and the U.S. dollar strengthening. If the ruling stands, businesses that paid the tariffs may be eligible for refunds, marking a potential shift in U.S. trade policy.

The U.S. President is expected to find a workaround after suffering a major blow to a core part of his economic agenda.

Posted on

What’s going on in the U.S. bond market?

Treasury yields

The U.S. bond market is experiencing some turbulence due to rising Treasury yields and concerns over government debt.

Investors are demanding higher yields because they’re worried about the GOP’s tax-cut plans, which could lead to increased borrowing and a larger deficit.

Additionally, the recent Trump tax bill has caused Treasury bond yields to surge, as investors anticipate more government debt issuance. Moody’s has also downgraded the U.S. credit rating, adding to market jitters.

The bond market’s reaction is significant because higher yields can lead to increased borrowing costs across the economy, affecting everything from mortgages to corporate financing.

Japan

Japan’s bond market is facing significant turbulence, with yields on 40-year government bonds hitting an all-time high. This surge in yields is causing concerns about capital repatriation, as Japanese investors may start pulling funds from the U.S. and other foreign markets.

The Bank of Japan’s reduced bond purchases have contributed to this trend, leading to weaker demand for long-term government debt. Analysts warn that if Japanese investors begin moving their capital back home, it could trigger a global financial market shake-up.

Additionally, Japan’s Finance Ministry is considering reducing the issuance of super-long bonds to stabilise the market. However, recent auctions have shown weak demand, raising concerns about the effectiveness of this strategy.

Europe

The European bond market is experiencing some shifts due to falling government bond yields and easing U.S. – EU trade tensions.

German 10-year bund yields dropped by 4 basis points, reflecting increased investor confidence.

UK and French 10-year bond yields also declined by 4 basis points, while Italian bonds saw a 2 basis point dip.

Long-term UK gilts experienced the biggest movement, with 20 and 30-year yields falling by 7 basis points.

This decline in yields suggests higher demand for European government debt, possibly due to investors shifting away from U.S. assets amid concerns over U.S. fiscal health.

UK

The UK bond market is facing some challenges, with the IMF warning that it is vulnerable to sudden shocks due to a growing reliance on hedge funds and foreign investors.

30-year gilt yields have hit 5.5%, the highest in over three decades.

The Bank of England’s quantitative tightening and increased bond issuance are putting pressure on the market.

The Debt Management Office (DMO) is shifting towards short-dated debt to reduce long-term interest costs.

Additionally, the UK government has launched a new 30-year gilt offering 5.375% interest, which is attracting investor attention.

Posted on

Tesla’s European market meltdown – sales plunge 49% amid brand damage and fierce competition

Tesla's European sales fall!

Tesla’s vehicle sales in Europe plummeted by 49% in April 2025, marking the fourth consecutive month of decline.

Despite an overall 27.8% rise in battery-electric vehicle sales, Tesla struggled to maintain its foothold in the region.

The drop in sales has been attributed to increasing competition from Chinese automakers, a shift in consumer preferences towards hybrid vehicles, and growing backlash against CEO Elon Musk’s political affiliations.

Tesla’s market share in Europe nearly halved, falling from 1.3% to 0.7%. The company’s aging lineup, particularly the Model Y, has failed to attract new buyers, while rivals such as BYD have overtaken Tesla in European EV sales for the first time.

Additionally, European carmakers are cutting costs and adapting to U.S. tariffs on auto imports, further intensifying competition. Chinese EV manufacturers are also cutting EV prices.

While Tesla faces challenges in Europe, the broader EV market continues to expand, driven by government incentives and stricter emission targets.

However, unless Tesla refreshes its lineup and rebuilds consumer trust, its dominance in the European market may continue to erode.

The company’s future remains uncertain as it navigates political controversies and shifting market dynamics

Posted on

China’s industrial profit accelerates in April 2025 – despite Trump’s tariffs

China factory output

Despite the heavy tariffs imposed by former U.S. President Donald Trump, China’s industrial sector has demonstrated remarkable resilience.

In April 2025, industrial profits rose by 3%, marking the second consecutive month of growth.

This increase was largely driven by Beijing’s strategic policy measures, which cushioned the impact of the tariffs and supported private enterprises.

In the first four months of 2025 China’s industrial profits rose 1.4%, according to data released on 27th May 2025.

Trump’s administration had levied tariffs as high as 145% on Chinese imports, prompting Beijing to retaliate with its own trade restrictions.

However, rather than crippling China’s manufacturing sector, these tariffs led to a shift in trade dynamics. Chinese exporters successfully found alternative markets, particularly in Southeast Asia and Europe, mitigating the losses from reduced U.S. trade.

It isn’t unusual for businesses to weather and absorb such tariffs but more usually, the consumer bears the brunt and pays some, if not all, of the increased costs.

High-tech manufacturing and equipment production saw notable gains, with profits in these sectors rising by 9% in the first four months of the year.

Additionally, government subsidies for consumer electronics and appliances helped boost domestic demand, further stabilising industrial growth.

While state-owned enterprises reportedly faced challenges, private firms and foreign-invested businesses saw profits improve.

Analysts suggest that China’s ability to adapt to external shocks underscores the resilience of its industrial economy, even in the face of aggressive trade policies

Posted on

Are we underestimating the impact of tariffs on S&P 500 earnings growth?

Asleep

As global trade tensions escalate, many investors and analysts are questioning whether markets are too complacent about the long-term effects of tariffs on corporate earnings.

While some argue that businesses have adapted to protectionist policies, others warn that the S&P 500’s earnings growth could face significant headwinds.

Tariffs: A hidden threat to profit margins

Tariffs increase costs for companies reliant on imported goods and materials. Businesses must either absorb these costs, pass them on to consumers, or find alternative suppliers – each option presenting challenges.

According to Goldman Sachs, an additional 5% tariff could reduce S&P 500 earnings by 1-2%.

A 100% tariff would equate to around 10-20% reduction in the S&P 500 – and that’s correction territory.

Retailers and manufacturers are particularly vulnerable

Companies like Best Buy, Walmart, and Target rely on imports, and higher tariffs could suppress profit margins or lead to higher consumer prices, potentially dampening demand.

Market sentiment vs. economic reality

Despite concerns, Wall Street has remained relatively optimistic. A recent 90-day tariff pause between the U.S. and China has boosted investor confidence, leading firms like Goldman Sachs and Yardeni Research to raise their S&P 500 targets.

This optimism may be short-lived if tariffs resume or escalate

Sector-specific risks

Certain industries are more exposed than others

Technology: Supply chain disruptions and higher costs for components could reduce profit margins.

Consumer Discretionary: Higher prices on imported goods could weaken consumer spending.

Industrials: Increased costs for raw materials could slow growth and investment.

The bigger picture: long-term economic impact

Beyond immediate earnings concerns, tariffs could stifle innovation, reduce global competitiveness, and slow economic growth.

Citi analysts estimate that aggressive tariffs could cut S&P 500 earnings growth by 2-3%.

A false sense of security?

While markets have bounced back from initial tariff shocks, the long-term effects remain uncertain.

Investors should closely monitor trade policies, sector-specific risks, and corporate earnings reports to assess whether the S&P 500’s growth trajectory is truly secure – or dangerously fragile.

Time will tell – but the S&P 500 is vulnerable to pressure right now!

Posted on

Trump does deals!

U.S. does deals!

Trump Secures Over $1.4 Trillion in Landmark Middle East Trade Agreements

President Donald Trump’s recent visit to the Middle East has resulted in a wave of economic agreements totaling over $1.4 trillion, marking one of the largest trade expansions between the region and the United States.

With a focus on investment, defence, and technology, Trump’s approach has emphasised strengthening economic ties rather than engaging in broader geopolitical discussions.

Qatar: aviation and defence take centre stage

One of the most eye-catching deals came from Qatar, where Qatar Airways finalised a $96 billion agreement to purchase 210 Boeing jets – the largest Boeing order in history.

This commitment not only bolsters Qatar’s aviation industry but also solidifies Boeing’s future as a leader in global aerospace manufacturing.

Additionally, Qatar has pledged $243.5 billion toward investments in quantum technology and defence systems, reinforcing the country’s push toward technological advancement.

Defence agreements also played a role, with Qatar signing a $1 billion deal for cutting-edge drone defence technology and a $2 billion contract for advanced remotely piloted aircraft.

These acquisitions align with the country’s long-term strategic vision of modernising its military capabilities.

Saudi Arabia: the biggest beneficiary

Saudi Arabia emerged as the biggest beneficiary of Trump’s visit, securing $600 billion in investment commitments across multiple sectors.

The kingdom allocated $142 billion toward military equipment and services, ensuring continued collaboration between U.S. defence contractors and Saudi leadership.

This agreement spans air defence systems, next-generation fighter jets, and cybersecurity infrastructure, strengthening Saudi Arabia’s military.

Beyond defence, Saudi Arabia also inked deals in AI infrastructure, energy projects, and technology investments, positioning itself as a hub for digital transformation.

By incorporating AI-driven solutions into its economy, the kingdom aims to enhance productivity and accelerate its shift toward a diversified financial landscape.

United Arab Emirates: AI

United Arab Emirates secured $200 billion in deals, featuring a 10-square-mile AI campus in Abu Dhabi and a $14.5 billion aircraft investment by Etihad Airways

Strategic impact

Trump’s visit signifies a shift in U.S. foreign policy, focusing heavily on economic partnerships rather than traditional diplomatic negotiations.

By securing these agreements, the administration aims to strengthen American industries, bolster employment, and ensure a steady flow of investment into the U.S. economy.

While critics may argue that the deals lack a geopolitical dimension, the sheer scale of $1.4 trillion in transactions underscores Trump’s intent to foster long-term financial alliances.

The coming months will determine whether these agreements yield sustainable benefits or spark concerns over economic dependencies.

Donald Trump’s Middle East tour has reportedly resulted in over $1.4 trillion in investment pledges. His deals span multiple sectors, including defence, aviation, artificial intelligence, and energy.

Deal summary

Saudi Arabia committed $600 billion in investments, including a $142 billion defence partnership and AI infrastructure deals.

Qatar signed $243 billion in agreements, including a $96 billion Boeing aircraft purchase.

United Arab Emirates secured $200 billion in deals, featuring a 10-square-mile AI campus in Abu Dhabi and a $14.5 billion aircraft investment by Etihad Airways.

Trump’s tour has been framed as a push for foreign investment to boost U.S. manufacturing while Gulf states aim to accelerate AI development and diversify their economies

Posted on

UK first quarter GDP better than expected at 0.7%

UK GDP up!

The UK economy has defied expectations, recording a 0.7% increase in GDP in the first quarter of 2025 – better than the forecast of 0.6%.

This surge places Britain ahead of economic heavyweights, including the United States, Canada, France, Italy, and Germany.

A key driver of this growth has been the service sector, which demonstrated resilience amid global economic uncertainty. Production also experienced a boost, further solidifying the UK’s standing as an economic force.

Chancellor Rachel Reeves was quick to praise the achievement, citing the government’s commitment to fostering stability and investment.

However, economists are watching closely as Britain navigates potential challenges ahead, particularly in light of the latest global trade tariffs imposed by Donald Trump in April.

These new restrictions could slow growth in the coming months, but for now, the economy is holding firm. However, the UK – U.S. tariff deal is likely to lessen the overall impact and present a further improvement in the second quarter.

With businesses continuing to adapt to shifting market conditions, the UK’s better-than-expected performance is a welcome sign.

Data source: Home – Office for National Statistics

Posted on

U.S. inflation rate at 2.3% in April 2025 – less than expected

U.S. inflation

April 2025 saw the U.S. inflation rate ease to 2.3%, marking its lowest level since February 2021.

The consumer price index (CPI) rose 0.2% for the month, aligning with expectations but slightly below the forecasted 2.4% annual rate.

Core CPI, which excludes volatile food and energy prices, also increased 0.2%, maintaining a 2.8% year-on-year rate.

Shelter costs, which make up a significant portion of the index, rose 0.3%, contributing to more than half of the overall inflation movement.

U.S. egg prices dropped 12.7%, though they remained 49.3% higher than a year ago.

The impact of Trump’s tariffs remains uncertain, with negotiations potentially influencing inflation trends in the coming months.

Court to judge on legality of ‘reciprocal’ tariffs

U.S. Court of International Trade is set to hear arguments in a case challenging President Donald Trump’s tariffs.

The lawsuit filed by five domestic businesses argues that the law Trump invoked to impose his ‘reciprocal’ tariffs does not actually give him the power he claims.

The Department of Justice maintains that that law ‘clearly’ authorises the president to impose tariffs.

Posted on

Trump’s Boeing 747 Gift from Qatar – a diplomatic gesture or controversial play?

It's just a gift!

It’s just a gift?

Former U.S. President Donald Trump is set to receive a luxury Boeing 747-8 from the Qatari royal family, a move that has sparked debate over its implications.

The aircraft, valued at $400 million, is expected to serve as a temporary Air Force One until the U.S. government receives its long-delayed replacements.

Trump has been vocal about his frustration with Boeing’s delays in delivering the new presidential aircraft, originally scheduled for 2022 but now pushed to 2027.

The Qatari government’s offer provides an interim solution, allowing Trump to use the jet for official travel.

However, critics argue that accepting such a gift raises ethical and legal concerns, particularly regarding the U.S. Constitution’s emoluments clause, which restricts officials from receiving gifts from foreign states without congressional approval3.

The White House insists the arrangement is legal, stating that the aircraft will be transferred to the U.S. Air Force rather than Trump personally.

Upon completion of his term, the plane will reportedly be donated to his presidential library.

As Trump prepares for a Middle East visit, the controversy surrounding the aircraft continues to unfold.

Will this be seen as a practical solution or a diplomatic misstep?

And anyway, why can’t the U.S. provide its own presidential plane?

Posted on

Trump tariff roll-back – a win for China? U.S. markets rejoice the ‘deal’

U.S. markets gain on U.S China tariff roll-back announcement

The U.S. stock market surged as investors cheered a breakthrough in trade negotiations between Washington and Beijing.

The rollback of tariffs, announced as part of a new trade agreement, sent the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite soaring.

The deal, which slashes ‘reciprocal’ tariffs on both sides, is seen as a major de-escalation in the ongoing trade war that has rattled global markets for years.

Wall Street’s Reaction

Markets responded with enthusiasm as the Dow Jones Industrial Average jumped over 1,000 points, while the S&P 500 climbed more than 2.5%, and the Nasdaq surged by nearly 3%.

Investors had been wary of prolonged trade tensions, which had weighed heavily on corporate earnings and economic growth.

The tariff rollback signals a potential thaw in relations, boosting confidence across sectors, particularly in technology, retail, and manufacturing.

Tariff rollback

Under the agreement, U.S. tariffs on Chinese imports will be reduced from 145% to 30%, while China’s tariffs on American goods will drop from 125% to 10%. The reductions will be in effect for 90 days, allowing both nations to continue negotiations on a broader trade framework.

Treasury Secretary Scott Bessent emphasised that neither side wants a complete decoupling, and the rollback is intended to restore trade flows disrupted by years of economic brinkmanship.

China’s perspective: A strategic victory?

While the U.S. markets celebrated, China views the deal as a significant win. Beijing has sought relief from the steep tariffs imposed by Washington, which had strained its export-driven economy.

The agreement not only reduces financial pressure on Chinese manufacturers but also positions China as a key player in shaping future trade policies.

Some analysts argue that Beijing successfully leveraged its economic resilience to push Washington toward concessions, reinforcing its global influence.

Looking ahead

Despite the optimism, uncertainties remain. The 90-day window for negotiations suggests that further trade disputes could arise if talks stall. But will the U.S. allow that after the stock market turmoil Trump’s tariffs originally created?

Additionally, Federal Reserve Chair Jerome Powell cautioned that while sentiment has improved, the economic impact of previous tariffs has yet to fully materialise. Investors will be watching closely for signs of sustained progress, as any setbacks could trigger renewed volatility.

For now, Wall Street is basking in the relief of a tariff truce, with hopes that this momentum will lead to a more stable and predictable trade environment.

Whether this marks the beginning of a lasting resolution or just a temporary reprieve remains to be seen.

It is most likely now a platform for the U.S. to benefit from generally lower tariffs in the future.

There will again be cheap goods on U.S. shelves in time for Christmas.

Posted on

U.S. and China agree 90-day ‘reciprocal’ tariff pause and reduction deal

Tariff trade war 90-day pause

In a surprising breakthrough, the United States and China have agreed to suspend most tariffs on each other’s goods for 90 days, marking a significant step toward easing trade tensions between the world’s two largest economies.

Following high-stakes negotiations in Geneva, representatives from both nations announced that reciprocal tariffs would be slashed from 125% to 10%, significantly lowering trade barriers.

However, the U.S. will continue imposing 20% tariffs on Chinese imports related to fentanyl, meaning total tariffs on Chinese goods will settle at 30%.

The agreement signals a temporary thaw in what has been a long-standing economic standoff between Washington and Beijing. U.S. Treasury Secretary Scott Bessent, who played a leading role in the discussions, described the talks as ‘very productive’, crediting the location for fostering an atmosphere of cooperation.

While this move could provide immediate relief for businesses and consumers impacted by trade restrictions, analysts caution that the 90-day suspension may not translate into a long-term solution.

Some experts speculate that ongoing trade negotiations could lead to further reductions, while others warn that unresolved tensions could lead to reinstated tariffs if agreements stall.

For now, the deal presents an opportunity for renewed dialogue, leaving global markets optimistic about future relations between the two economic powerhouses.

How the next three months unfold will determine whether this development is a stepping stone to broader reforms or simply a temporary reprieve in a complex trade dispute.

I expect Trump, having instigated the ‘tariff’ upheaval, will happily hang on to this ‘deal’ with China to avoid any further stock market turmoil.

What really just happened? The markets seem to be rewarding a situation that was artificially created and then ‘fixed’.

Aren’t we simply back where we were before the Trump tariff onslaught or is this really a ‘promise’ for better ‘deals’ to come?

Has it opened a door for better relations?

Create a problem… fix a problem!

It’s all about the U.S.

We’ll see…

Posted on

China’s Exports Defy Tariff Pressures, Surge 8.1% in April

China World Trade

Despite the weight of U.S. tariffs imposed by President Donald Trump, China’s export sector has shown remarkable resilience, posting an 8.1% increase in April 2025 compared to the previous year.

This surge comes as a surprise, surpassing economists’ expectations of a modest 1.9% rise.

While China’s outbound shipments to the U.S. plunged by over 21%, exports to Southeast Asian nations soared by 20.8%, with Indonesia and Thailand seeing particularly strong growth.

This shift suggests that Chinese exporters are successfully redirecting their goods to alternative markets, mitigating the impact of U.S. trade restrictions.

The tariffs, which now stand at 145% on Chinese imports, were designed to pressure Beijing into trade concessions. In response, China retaliated with 125% duties on American goods, further escalating tensions.

However, analysts suggest that some of China’s export growth may be attributed to transshipment through third countries and contracts signed before the tariffs took effect.

Despite the export boom, China’s factory activity has taken a hit, falling to a 16-month low in April 2025, with new export orders dropping to their lowest level since December 2022.

Concerns are mounting that the tariffs could spill over into the job market, with estimates suggesting China could lose 16 million jobs tied to U.S. – bound production.

As both nations prepare for high-level trade talks in Switzerland, there is cautious optimism that a phased rollback of tariffs could be on the horizon.

While a comprehensive deal remains elusive, even minor tariff reductions could provide relief to businesses on both sides.

The coming months will be crucial in determining whether China can sustain its export momentum or if the tariff war will take a deeper toll on its economy.

Posted on

U.S. Federal Reserve holds interest rates at 4.25% – 4.50% and upsets Trump in the process

Tariffs and the U.S. economy?

The Federal Reserve held its key interest rate steady at 4.25% – 4.50% on 7th May 2025, citing economic uncertainty and the potential impact of tariffs.

Fed Chair Jerome Powell emphasised that the central bank is in wait-and-see mode, monitoring inflation and employment risks.

The decision follows concerns that Trump’s trade policies could lead to stagflation, with rising prices and slowing growth.

While markets reacted positively, analysts remain divided on whether the Fed will cut rates later this year.

Powell stated that future adjustments will depend on evolving economic conditions and the balance of risks.

Trump’s take on this decision was reportedly to call Powell… a fool.

What is stagflation?

Stagflation is an economic condition where high inflation, stagnant economic growth, and high unemployment occur simultaneously.

It presents a challenge for policymakers because measures to reduce inflation can worsen unemployment, while efforts to boost growth may fuel inflation further.