Roundup by Asset Allocator Journal Staff
Today’s economic signals guide wealth managers through trade tensions, labor market shifts, and market volatility. From tariff fallout to safe-haven surges, here’s a concise roundup to inform asset allocation.
U.S. unemployment claims dropped 9K, beating expectations, per Advisor Perspectives, signaling labor market resilience despite tariff pressures. However, the UK’s labor market faces challenges, with Business Matters highlighting the need for policies to support older workers amid sluggish growth. The UK’s move to classify trade documents as “secret” to shield from U.S. tariff demands underscores escalating tensions, potentially dampening cross-Atlantic investments.
Trump’s tariffs, though softened by exemptions, remain high, per Advisor Perspectives, driving inflation fears. Federal Reserve Chair Jerome Powell warns of stagflation risks—higher inflation and weaker growth—prompting a 700-point Dow drop, per the Financial Times. A historical look at the Smoot-Hawley Tariffs, via Advisor Perspectives, recalls how 1930s trade barriers deepened recessions, urging caution with cyclical stocks. Blackstone’s president warns of recession risks without trade deals, per the Financial Times, pushing portfolios toward defensive assets.
Gold prices hit record highs, per Business Matters, as investors seek safe havens amid tariff unease, making precious metals a prudent hedge. U.S. stock retreats, noted by Business Matters, and Advisor Perspectives’ analysis of potential further declines suggest leaning into covered call ETFs for income stability. The Fed’s “alphabet” of tools, per Advisor Perspectives, offers flexibility to counter tariff-driven inflation, but Powell’s tenure faces Trump’s ire, per the Financial Times, adding policy uncertainty.
China’s tariff headwinds, per Advisor Perspectives, contrast with domestic drivers like consumer spending, advising selective emerging market exposure. In the UK, InPost’s acquisition of Yodel and Strava’s purchase of Runna, per Business Matters, signal M&A activity, while Vizzy’s £3.65m raise for CV innovation hints at tech-driven labor solutions. London’s finance sector sees hiring gains, per Business Matters, but global instability clouds optimism. A Financial Times piece on Americans moving to Europe reflects tariff-driven sentiment shifts, potentially impacting U.S. real estate funds.
Wealth managers should prioritize gold, covered call ETFs, and defensive equities, while monitoring labor data and trade developments for tactical shifts.
Sources: Advisor Perspectives, Business Matters, Financial Times
