Matthew Strachan

Markets have successfully climbed their wall of worry (tariffs, wars, fiscal deficits) to stand at, or close, to all time highs. This is in sharp contrast to the start of the quarter and President Trump's 'Liberation Day' tariff announcements. Policy flips seem to be the current modus operandi, but the uncertainty and likely settlement of US tariffs well above where they started the year are not positive for capital investment decisions and growth generally. Although we are not expecting outright recession, growth looks likely to disappoint and interest rates are likely to come down, particularly in the UK. We are shorter duration in bonds and remain underweight US equity (valuations) and overweight UK, with a preference for smallcap (rates beneficiaries and less $ exposure).

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