Fabian Wiesner, Head of Distribution Partnerships, Simplybiz

At the end of last year, if somebody had told me that the UK would be outperforming the US stock market, I would have jumped for joy. I guess this year is really showing us that the terms on which you are just as important as the winning itself. Year to date, the UK it’ s outperforming the US by around 4.5 % at the time of writing- fantastic news for all of those that have been overweight in the UK, however, that’ s not a huge number as the US has spent the past few years storming ahead.

I will come onto why the US has fallen behind and the problems it is facing shortly, however, at this moment it is just nice to be the net beneficiary of some free-floating money. One can only wish that the UK was an attractive enough place for new listings as this might have been the stimulus that we needed. Alas, it’ s currently really difficult to view the UK as an exciting place to invest and, with recent reports showing that inflation is again on the rise, it feels as though we’ re just at the precipice of a problem ourselves. I’ m not entirely certain that the Bank of England would have cut rates down to 4 % had they known that these inflation figures were going to come out as hot as they have. The Bank of England was already have fighting internal turmoil whether they should raise hold or cut rates with the split decision ending in a cut. So, what seemed like a good idea a few weeks ago feels a lot less positive now with uncertainty on the horizon.

But hey, as long as the stock market keeps going up, who am I to complain? I’ ll just go back to putting my blinkers back on.

The US

For the past year I’ ve been talking about my favourite three T’ s; Trump, trade, and tariffs, So, why stop now?

We were told that Trump’ s aggressive introduction of tariffs was intended to make the US more self-sufficient and that consumers would be better off. In almost all cases, any increases in tariffs are in some way paid for by the consumer, so- regardless of what the people were told- the chickens were always going to come home to roost. And roost they did.

Much of the world saw Donald Trump’ s trade tariffs as being too aggressive- so aggressive that the markets eventually lost their nerve and we saw a 20 % drop in US stock markets across the board. This did ultimately lead to President Trump announcing a hiatus and a pause on the vast majority of these tariffs. Now, the main target of these tariffs was China, with the intention of making Chinese goods more expensive and, as a result, US goods more exciting or more attractive to US consumers. Through this little trade tit for tat, China levied their own tariffs against the US, and it all got a bit out of hand. However, when the US announced a pause on the tariffs, the Chinese government did not do the same thing and have not blinked.

For now, the outlook for the US looks better following a rally in the stock market after the announcement of the tariff pause. As the summer draws closer to an end, the talks will

24 | The Adviser