Global market rally continues to ease as euphoria fades
While the overall rally in global stock markets seems to have further to go, momentum has eased since Monday’s trade truce announcement. Markets were going to find it hard to continue the runaway gains, but the overall positive view of recent developments remains.
What we’re seeing now is a return of flows to stock markets, investors having been spooked out of equities in March and April. Fears of a recession seem to have been overdone, at least following the pause in the new US tariffs to allow time for trade negotiations to take place.
Even if more trade deals are announced, it is still the case that tariffs on goods entering the US will be much higher than anyone dared to contemplate. This should result in a not insignificant hit to earnings, though the impact will only start to become clear in future earnings reports. The question for all investors is, have…
