Global Outlook & Strategy

The title for this Global Outlook and Strategy publication is Solid Foundations. We thought that it was important to reflect on investor’s concerns during the quarter namely:

• The US administration upending the global trading environment with their Liberation Day tariff arrangements.

• Concerns around the longer term sustainability of the US fiscal position.

• Concerns around the health of the Chinese economy.

• Geopolitical concerns in the Middle East and Ukraine. Despite these concerns, economies have not fallen into recession and markets have rebounded strongly from the April lows. This suggests the need to reflect on the initial conditions, and consider what might be some of the foundations to provide continued support. A few that come to mind are:

• The moderation in the inflationary outlook of late that has allowed several central banks to ease policy.

• Lots of liquidity from the cash generated by fixed income and deposit assets that need reinvesting.

• A potential change in dynamics in Europe and increased investment.

• Contained energy prices.

• A resilient banking system and robust corporate balance sheets for many public companies.

• Continued innovation through technology and AI leading to a strong investment climate.

• Expectations for regulatory reform in the US.