Two Minute Missive - 12th August
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your adviser before undertaking any investments.
The World In A Week - What can you buy for $4 trillion these days?
Written by Chris Ayton
A challenging end to the week led equities into the red as investors reacted to a very weak US employment report, a decline in business sentiment in the US and a new set of tariffs announced by President Trump. The MSCI All Country World Index of global equities ended the week down -1.3%. Bonds, conversely, rallied on the economic uncertainty, with the Bloomberg Global Aggregate Index up +0.6% in GBP Hedged terms.
In the US, last week saw some of the largest technology companies release a raft of better-than-expected profit statements. In the process, Microsoft became the second US listed company after Nvidia to reach a market value of $4 trillion. To put this magnitude of a single company into perspective, FTSE-Russell state the combined market value of all 548 companies contained within the UK’s FTSE All Share Index as at end of June at just under $3.3 trillion (£2.5 trillion). With $4 trillion, you could buy all of the 548 largest listed UK businesses at their current market prices and still have $700 billion to spare!
That said, although many UK investors continue to eschew their domestic equity market, the lower valuations on offer in the UK continue to gather the attention of those seeking some diversification away from the elevated valuations in the US and the combination of a 3.5% dividend yield from the overall UK equity market, ongoing share buybacks and solid corporate profit growth, particularly in mid-sized companies, are helping propel the index higher this year. The UK equity market is up +12.5% in 2025. Takeover activity in the UK also remains robust and, in the latest example, last week we saw London-listed retirement specialist, Just Group, bid for by a Canadian group, Brookfield, for £2.4bn, a 75% premium to its pre-bid price. This means Brookfield views the company as good value even at a price 75% above where it was being priced on the UK market. This bid comes hot on the heels of Spectris, the UK precision instruments supplier, being bid for by American private equity group, KKR, at a 96% premium. Research from broker Peel Hunt last month showed the UK is on course for the biggest year of takeovers since 2021 after £74 billion of offers in the first half of 2025. While the long-term implications for the UK equity market of these UK businesses being snapped up by private and industrial admirers remains uncertain, it does validate the value on offer in certain segments of the UK market. We retain a modest overweight to UK equities within our portfolios.
Having enjoyed a bit of a renaissance this year, European equities were the laggards last week with the MSCI Europe ex-UK Index down -3.6% over the week. As the French Prime Minister called the EU’s tariff agreement with the US as a “dark day” for Europe, the German Chancellor said his country would suffer “substantial damage” from the tariffs and Italian trade associations called for compensation from the EU to make up for predicted losses, others breathed a modest sigh of relief that this was lower than the 30% previously threatened. The European index’s weekly decline was also exacerbated by one of its largest companies, weight loss drug maker Novo Nordisk, seeing its shares fall by more than 20%, after cutting its profit forecasts amid rising competition from the US. The share price of this previous market darling is now down nearly 70% from its peak last year. This should provide a stark reminder to investors that just because something is large and loved by the market doesn’t make it a safe long-term investment.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 4th August 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Successful tariff negotiations propel markets higher
Written by Millan Chauhan
Last week, global equity markets rose by +1.5% after the US reached tariff agreements with Japan and the EU. The US set a 15% tariff on most Japanese exports, lower than the previously threatened 25%. This positive development resulted in a +5.2% rise in Japanese equities (MSCI Japan), outperforming global markets. The auto sector was included in these tariffs, benefiting Japanese car makers as the 15% rate is lower than those applied to its competitors, which boosted the share prices of companies like Toyota and Honda. As a reminder, we currently maintain an overweight position in Japanese equities across our portfolios, which has contributed positively to overall portfolio performance this month. Although this agreement contributed positively to short-term performance, we maintain a favourable outlook on the ongoing corporate governance reforms taking place in Japan.
This deal stands out from recent ones with Indonesia and the Philippines because Japan is a major US trade partner, holding a trade surplus. In 2024, Japan exported about $148bn in goods, including vehicles and machinery, making it the US's fifth-largest import source. Conversely, the US exported approximately $80bn of goods, which includes oil and gas and pharmaceuticals. Japan’s Prime Minister, Shigeru Ishiba described the agreement as “the lowest figure to date for a country maintaining a trade surplus with the United States.” The Japanese government also announced its commitment to supporting investments totalling approximately $550bn, aimed at strengthening several US industries, with a particular focus on sectors such as pharmaceuticals and semiconductors.
It was subsequently announced that the US and the EU had reached an agreement on tariffs, effectively averting a transatlantic trade dispute. Under the terms of the agreement, a 15% tariff will be maintained on most EU imports, down from the previously imposed blanket rate of 25%. While this reduction is viewed positively by markets, it was viewed less positively by EU politicians, and the tariff remains higher than the 10% level agreed upon in the separate deal with the UK.
Notably, the complexity of this agreement is heightened by the structure of the EU, which comprises 27 member states, each with its own distinct economic interests and regulatory framework. The US continues to run its second-largest trade deficit with the EU (after China), having imported $236 billion more in goods from the bloc than it exported in 2024. The US and China have also entered a new round of trade negotiations, as the 90-day truce comes to an end on August 12th.
Currently, it is corporate earnings season, during which companies report their financial results for the second quarter of 2025. Alphabet, the parent company of Google, reported results that surpassed analyst expectations, primarily driven by a 32% increase in its Google Cloud business. The company also announced plans to raise its capital expenditures on AI infrastructure by an additional $10bn, reaching a total of $85bn for 2025. This announcement had a positive impact on other stocks with exposure to artificial intelligence. In contrast, Tesla, an electric vehicle manufacturer, reported a 12% decline in revenue and a 23% decrease in earnings, attributing these results to increased competition from China. Last week, the S&P 500 closed up by 1.6%.
In summary, while markets respond to short-term news flow and developments, our analysis of opportunities and investment views is based on a long-term perspective, which we regard as an effective way to address short-term uncertainty.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 28th July 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Equities keep rising
Written by Ilaria Massei
Global equity markets rose last week with the MSCI All-Country World Index up +1.1% while global fixed income markets as measured by the Bloomberg Global Aggregate (Hedged to GBP) were flat.
The annual inflation rate in the US held steady at 2.7%. Although this is an increase from the 2.4% rise in May this year, the increase was expected by the market. Core annual inflation which strips out volatile components like food and energy, was at 2.9%, below expectations and a tick above the previous month. This was well received by equity markets, with the S&P 500 gaining +1.1%. On the fixed income side, volatility increased due to speculation that Federal Reserve (Fed) Chair Jerome Powell might be removed from his role before his term ends in 2026. Trump has been a fierce critic of the chair of the Fed as the central bank has paused further rate cuts so far this year but said that he would not remove Powell. This helped ease concerns about threats to the Fed’s independence, which is a key factor for monetary policy stability.
In the UK, inflation remains more persistent than in other regions, struggling to move towards the 2.0% target, with the annual rate coming in higher than expected at 3.6%. The main driver was higher transport costs, especially fuel. Core inflation was also above expectations and higher than May’s reading, coming in at 3.7%. With inflation still elevated, the Bank of England is likely to delay any rate cuts, which weighed on UK fixed income markets. The Bloomberg Sterling Aggregate Index declined by -0.4% for the week. As a reminder, we have no direct exposure to UK Gilts, which we continue to see as less attractive compared to other fixed income opportunities given ongoing inflation risks.
Elsewhere, Japan held national elections over the weekend. While the ruling Liberal Democratic Party led coalition missed an outright majority by a few seats, the fact that this outcome was broadly expected by the markets should avoid resulting in substantial turmoil. Prime Minister Shigeru Ishiba could face some pressure following the result, but he has indicated he intends to stay in charge. The equity market leading into elections, as measured by the MSCI Japan, rose +0.1% last week. Returns for GBP investors were held back by a weaker yen as Japan’s interest rates remain significantly lower than elsewhere, contributing to currency weakness and reduced appeal for foreign investors. Additionally, Japanese companies are continuing to unwind long-standing “cross-shareholdings,” where firms own shares in each other, as part of broader efforts to improve corporate governance. While this may weigh on performance in the short term, we see these reforms as positive for long-term investors and we remain constructive on the Japanese equity market, which remains attractively valued, particularly compared to the US.
In conclusion, while short-term factors like political uncertainty, or currency movements can create market volatility, we see these as opportunities - particularly in areas that may be underappreciated or overlooked. We remain focused on a long-term approach to positioning as we think is the best way to navigate short-term uncertainty.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 21st July 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Markets rise despite new tariff threats
Written by Dominic Williams
Global stock markets made modest gains last week, showing resilience despite renewed trade tension from the United States. President Trump announced new tariffs, including 30% on imports from Mexico and the European Union, and 50% on goods from Brazil, due to begin on 1st August. Investors, however, largely viewed these measures as political posturing rather than an immediate threat to global growth. This more relaxed reaction helped push the MSCI All Country World Index, which tracks a broad range of global shares, up by +0.7%.
In the US, economic data remained supportive. Weekly jobless claims fell to 227,000, which suggests that fewer people are newly out of work, a sign of continued labour market strength. However, a rise in continuing claims, which track those still receiving unemployment benefits, may indicate that it's taking longer for some to find new jobs, hinting at a possible slowdown in hiring.
The S&P 500 rose +0.7%, while the tech-heavy Nasdaq-100 gained +0.6%. This followed news that Nvidia became the world’s most valuable company, becoming the first stock market-listed company to achieve a value of $4tn, overtaking Microsoft and Apple. This milestone reflects continued investor confidence in AI. However, stretched valuations and increased market concentration could pose risks, particularly if market leadership broadens, as it did earlier this year, potentially leading to underperformance among the highly valued top-performing companies. This is where diversified portfolios play an important role. The Russell 2000 Index of smaller companies added +0.4%, reflecting broader market strength.
One region that appeared more directly affected by the new tariff announcements was Japan, an export-heavy economy and the largest foreign direct investor in the US. The MSCI Japan Index fell -1.4%, weighed down by renewed trade tensions. The proposed tariffs have raised concerns about Japan’s export-reliant sectors, particularly in manufacturing and technology. The sell-off reflects growing anxiety over Japan’s economic exposure to US policy shifts, especially as the country remains dependent on external demand amid subdued domestic consumption. However, Japan continues to benefit from strong corporate balance sheets and contained inflation which allows a supportive monetary policy. This contrasts with broader Asian markets, where the MSCI All Country Asia Pacific ex-Japan Index rose +1.8%, highlighting Japan’s unique sensitivity to geopolitical developments.
In the UK, the latest GDP figures painted a mixed picture. While the economy contracted slightly by -0.1% in May, the broader three-month average showed +0.5% growth, the strongest quarterly performance in over a year. However, some of this strength came from businesses bringing forward trade activity, likely in response to President Trump’s initial tariff announcements earlier in the year. This temporary boost raises doubts about whether the UK can keep up this momentum in the second half of the year.
Despite this, UK equity markets held up relatively well. The FTSE 100, which includes globally competitive firms with significant overseas earnings, rose +1.3%, supported by a weaker pound. The more domestically focused FTSE 250 gained +0.3%, recovering some ground after recent politically driven losses. However, fiscal uncertainty continues to weigh on sentiment, particularly after the government’s welfare reform delays and the unresolved budget deficit. This divergence between economic data and market performance highlights the complex interplay between macroeconomic fundamentals and political risk.
The past week has shown that markets do not always move in step with political developments, and headline-grabbing news does not always translate into immediate market impact. Maintaining a diversified investment approach and staying invested for the long term continues to provide a solid foundation, regardless of short-term noise.
All performance figures are stated in Sterling terms, unless otherwise specified.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 14th July 2025.
© 2025 YOU Asset Management. All rights reserved.
Two Minute Missive - 9th July
Watch the latest ‘Two Minute Missive’ from our Client Investment Director, Shane Balkham.
This video contains the opinions and views of Shane Balkham. Please work with your financial planner before undertaking any investments.
The World In A Week - The US rallies while the UK is pressured by fiscal uncertainty
Written by Ashwin Gurung
It was a positive week for the US market as positive economic data boosted market sentiment. June’s Non-Farm Payrolls added 147,000 jobs, exceeding the forecast of 110,000, and the unemployment rate fell to 4.1%. However, the decline in unemployment was largely caused by a drop in labour force participation, as some workers have stopped looking for employment and are therefore excluded from the calculation. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers’ Index (PMI) also improved to 49%, while the Services PMI rebounded to 50.8%, signalling expansion. PMIs are key indicators of economic health and are based on business surveys, with a reading above 50 indicating expansion, while below 50 suggests contraction. Despite inflation now nearing the Federal Reserve’s 2% target, the strength of recent labour data suggests the Fed is unlikely to cut interest rates as soon as previously expected.
In terms of trade developments, while the US and Vietnam agreed on a new trade deal, setting a 20% tariff on Vietnamese exports (down from a proposed 46%) with no US tariffs in return, there has been little substantial progress in deals with other major trading partners, such as the EU, over the past week. With the 90-day tariff pause expiring on July 9th, and only the UK and Vietnam securing deals, there is growing anxiety around the situation. However, we have seen little evidence of tariff-driven inflation in either real-time data or official figures.
Much of the week’s attention also focused on President Trump’s tax and spending bill, which narrowly passed, including tax cuts, reductions to social welfare programmes, and increased military and immigration enforcement funding. While we don’t base our investment decisions solely on political developments, the bill has sparked debate. It is projected to add $3.3 trillion to the national debt over the next decade, increasing the risk of long-term economic instability and potentially leading to higher interest rates. However, this impact, like the anticipated tariff-driven inflation, remains to be seen.
The US market enjoyed a robust week nonetheless, with the S&P 500 and the more technology-focused Nasdaq-100 reaching record highs, up +2.3% and +2.0%, respectively, in GBP terms. Small and mid-cap companies, as measured by the Russell 2000 Index, surged +4.1% in GBP terms.
Elsewhere, in the UK, Prime Minister Keir Starmer faced a setback as 49 Labour MPs voted against proposed welfare reforms to Universal Credit and the Personal Independence Payments Bill, which aimed to cut disability and low-income benefits to ease fiscal pressures without raising taxes. Public and internal backlash forced Starmer to delay the reforms, leaving Chancellor Rachel Reeves grappling with a £4.8 billion shortfall, without increasing income tax or VAT. This uncertainty triggered a mid-week dip in the Pound Sterling and UK government bonds (gilts), as investors grew concerned about fiscal instability. As a reminder, we currently do not hold any dedicated UK bond managers in our portfolios. This is because, compared to global bonds or local-currency emerging market bonds, we find them less attractive in terms of returns, risk, and liquidity.
Nonetheless, economic indicators showed resilience. The UK economy expanded by 0.7% quarter-on-quarter in Q1 2025, the strongest growth in a year. The housing market also showed early signs of recovery, as the net mortgage approvals rose to 63,032 in May, a key forward-looking indicator of borrowing, recording its first rise this year, even as stamp duty thresholds reverted to pre-2022 levels on April 1. The FTSE 100 Index of large-cap UK-listed stocks posted a modest +0.3% gain. However, the fiscal uncertainty weighed on more domestically focused mid-cap stocks, with the FTSE 250 Index declining -0.6% over the week.
While short-term uncertainty is inevitable, we believe there are significant opportunities for investors who maintain a well-diversified, long-term approach. If you have any concerns, we encourage you to discuss them with your Financial Planner.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 7th July 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Staying the course
Written by Cormac Nevin
Last week witnessed a new all-time high for global equity markets as measured by the MSCI All Country World Index in local and US Dollar terms. For Pound-Sterling based investors, the returns were good albeit still below the peak seen in February due to the strong appreciation of GBP over that period.
We are cognisant that the global indices are now dominated by the US and would highlight that markets such as Japan and Emerging Markets outperformed their global counterparts last week in GBP terms (+1.7% and +1.5% respectively). Fixed Income markets also provided a range of strong returns.
At the halfway point in what has been a tumultuous year for 24-hour news channels, it is worth reflecting how imperceptible the procession of global events have been to the returns of a long-term investor who looks at their Fund valuations monthly (or better still, quarterly).
A large part of the reason market participants became agitated in the first two quarters of the year is likely down to the fact that many are now overexposed to the US market after decades of outperformance, either to the equity market or the US dollar or both. This is particularly true for passive investment strategies which will buy more and more US exposure as its weight in global indices increases.
As we look forward to the latter two quarters of 2025, we are mindful of the value our process possesses by having a range of global exposures which feature healthy allocations to markets such as Japan, Emerging Markets, the UK and Continental Europe. While we have no idea about how specifically the rest of the year will play out, it is certainly plausible that having a range of exposures which are less exposed to the mood of the present occupant of 1600 Pennsylvania Avenue will stand to be a benefit.
Beyond equities, we are mindful of the value added this year by our diversifying asset classes, and see reasons for this to continue. Our blend of Absolute Return managers is up over +5% this year, well more than double the return of UK Cash rates while exhibiting zero sensitivity to the equity market.
Our Real Assets blend is up almost 7% this year, even under conditions whereby inflation has continued to be tame. In Fixed Income, our exposure to local-currency emerging market bonds finished the quarter with returns close to +14% for the year, which has been boosted by the continued weakening of the US Dollar as the result of the administration’s trade policies.
As ever, there is a world of opportunity out there for investors who are sufficiently diversified and long-term-oriented enough to capitalise on them.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products. Past performance is not a guide to future performance.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 30th June 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Trump weighs in
Written by Shane Balkham
Donald Trump joined Israel’s attack on Tehran over the weekend after vowing to keep the US out of new global conflicts. In his typically blunt style, President Trump warned that there will either be peace or tragedy for Iran, as he looks to prevent the country from developing nuclear weapon capability.
The current uncertainty will be the capacity and capability of Iran’s response – the question being whether we will see diplomacy or retaliation from Tehran. Success will be deferred until Iran’s response is clear, however, the foreign minister told reporters that “the door for diplomacy should be always kept open, but this is not the case right now.”
Some politicians in Tehran have called for Iran to close the Strait of Hormuz, to disrupt oil supplies from the Gulf, a vital waterway for bulk shipping. Supply chain disruption is something that the markets have tackled before, with the pandemic, the Evergreen incident in the Suez Canal, and the invasion of Ukraine by Russia.
When geopolitical conflict flares, with the associated frenzied media headlines, we are often reminded just how much the world has changed over the past 10 or 20 years. The US is now a net energy exporter, and as such the implications of any escalation in the Middle East has a less significant impact than in the past. Markets also appear to be bearing this in mind, and little meaningful impact can be observed across equities, bonds, or currencies.
Last week we had the Federal Reserve (Fed), Bank of England (BoE), and Bank of Japan (BoJ) hosting its respective meetings for interest rates. All three central banks held rates at their current position, but all with slightly different reasons. The Fed quoted uncertainty around tariffs and what that might do to inflation and the impact on the US consumer; ultimately the costs around tariffs have to be paid and some of that will undoubtedly fall on the US consumer.
When and by how much is unknown and until the Fed sees more clarity, it will seemingly be holding policy steady. However, given the steady slowdown we observe across a range of US economic metrics, staying at a level of interest rates that is too high for the economy to bear contains its own risks.
The BoE also held interests at their current level, but with two rates cuts already delivered this year (February and May), the committee moved slightly more towards future cuts, and with significantly less direct political pressure, the BoE is looking in a better position than its US counterpart.
The Bank of Japan (BoJ) also held a vote to keep short-term interest rates on hold at 0.5%. Like the Fed and BoE, the BoJ is looking to normalise interest rates, but unlike its counterparts, it is wanting to raise rather than cut. All central banks agree on the same thing, that the short-term remains extremely uncertain for global trade policies and the impact this will have on economic activity and prices.
We continue to remind and reiterate the importance of having a globally diversified portfolio, which has proved to be an effective way of navigating the volatile and quickly evolving global landscape. When uncertainty is prevalent, staying invested is the best course of action.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 23rd June 2025.
© 2025 YOU Asset Management. All rights reserved.
The World In A Week - Chipping away at technology companies’ profits
Written by Shane Balkham
We had a third rate cut of the year from the Bank of England last week, bringing bank base rates down to 4%, the lowest since February 2023. It did take two rounds of votes to come to a majority though, with the initial voting result being 4-4-1, with four in favour of no change, four in favour of a ¼ percent reduction, and one in favour of a ½ percent reduction. The second vote saw a majority decision of 5-4 in favour of a ¼ percent cut.
There was devil in the detail, as the accompanying summary notes showed that the Monetary Policy Committee (MPC) members saw upside risks around medium-term inflationary pressures and reiterated that a cautious and gradual approach was still required in reducing bank base rates further. Whether this will lead to a dampening of the expectations for future rates cuts remains to be seen, although the Governor of the MPC, Andrew Bailey, confirmed the path may be longer and more drawn out than previously thought. Key to the pace of cuts will be future economic data, with growth, employment, and inflation being the most critical.
The dependence on economic data is starting to become less reliable. A lot of economic data is survey-based, and response rates have been dropping dramatically over time and worsened during the pandemic. If response rates are low, they may not be representative or wholly accurate. The rapidly changing world means that economic activity may no longer be accurately captured by traditional measures, and underfunding of statistical agencies weakens the quality of data. In the US, as part of Trump’s commitment in reducing costs within government, the measurement scope of consumer price inflation has been reduced, meaning areas of the US will no longer contribute to the data (such as Buffalo, NY). This is important, as CPI is a number that directly determines government spending and interest rate payments on some government debt. As highlighted in last week’s article, the markets reacted negatively to the very weak US employment report, which was sufficient cause for the US President to fire the head of the Bureau of Labor Statistics. The successor is expected to be announced this week, but that will not change the numbers in the data.
Also reported in last week’s update was Microsoft, which reached a $4 trillion valuation. It joined Nvidia in that top bracket, which is the largest US-listed company. Nvidia has increased its dominance at the top, becoming the largest single component in the S&P 500 index (the core equity index in the US consisting of the largest 500 companies), since the data started in 1981, at just under 8%. This level of concentration is distorting market performances, and the need for additional diversifying investments has arguably never been greater.
This has been driven by the profits from the semiconductor sector, which have increased significantly, and has not gone unnoticed by President Trump, who has struck an agreement with Nvidia and AMD to give the US government 15% of revenues from chip sales in China, in return for granting export licences for the Chinese market.
US investors who were trying to hedge the inflation impact from President Trump’s trade tariffs by buying gold must now pay tariffs as well. The US has imposed tariffs on imports of one kilogram and 100-ounce gold bars. Switzerland is the main supplier of gold bars to the US, meaning gold exports from Australia and the UK may be favoured due to having lower export tariffs.
Two extremes of investing - US technology equities and gold - both very different, but both being influenced by politics and policies, highlight the importance of having a spread of different investments over different geographies.
Any opinions stated are honestly held but are not guaranteed and should not be relied upon.
The information contained in this document is not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell, any investments or products.
The content of this document is for information only. It is advisable that you discuss your personal financial circumstances with a financial adviser before undertaking any investments.
All the data contained in the communication is believed to be reliable but may be inaccurate or incomplete. Unless otherwise specified all information is produced as of 11th August 2025.
© 2025 YOU Asset Management. All rights reserved.