No let up
If you look at the headlines coming from the financial press, you’d be forgiven to think the events of the last three trading sessions were the latest financial crisis. The truth is, at least for now, it isn’t. I certainly wouldn’t argue that the destruction in value within asset prices is negligible, but this isn’t a dot com bubble, a 2008, nor a 2020. If you wanted a historical comparison, the current souring of market sentiment most closely resembles the recession fears that garnered momentum in August last year and I guarantee most people have long since forgotten those. In FX, despite volatility abounding, the only definitive shift in value has been away from risk and the Dollar and towards, havens most notably the Swiss Franc and Japanese Yen.
That is equally not to suggest that Trump’s latest tariff episode doesn’t matter. They do. If tariffs are not unwound they will have a non-negligible impact upon growth too, particularly across Asia and the USA. Yesterday, US equity futures almost turned positive into the US open as rumours built that Trump was looking to delay the imposition of tariffs just as he had on Mexico and Canada at the 11th hour before. That ultimately did not happen, and Trump appears to remain resolved behind his current tariff plan despite reciprocity from China and condemnation from many business leaders at home and abroad.
As some of the dust settles between episodes of continuing volatility, it is clear that currently the risk the market is facing is one to growth. Note a risk to growth is not the same as a financial risk or systemic risk that has been known to perpetuate the kind of crises that many are keen to draw a parallel to at this time. Stocks are more sensitive to growth shocks than the wider economy. The stocks we see traded on bourses worldwide are companies whose fortunes are intrinsically linked to international demand and terms of trade. Their performance in this instance is not necessarily a good indicator of the kind of risk seen in other markets.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – Calling time on Swissy
Charles Porter
Tue 14 Oct 2025
Calling time on Swissy Switzerland’s Franc may be destined to faulter under its own weight. Despite rock bottom interest rates, the Swiss Franc has been a significant beneficiary of the post-Covid and Trump2 world. EURCHF, a key barometer of European risk, shows some 20-cents worth of Swiss rally post-Covid. The pair has dropped from well […]
Daily Brief – A look ahead
Charles Porter
Thu 9 Oct 2025
A look ahead The UK Pound continues to be influenced by the gilt market and fiscal concerns. Sterling has been a very expensive short this year, contributing to its relative outperformance. In fact, the few episodes of sustained weakness we have seen tended to have either coincided with a global risk-off turn or a sharp […]
Daily Brief – Jobs Week
Charles Porter
Tue 30 Sep 2025
Jobs Week The labour market has been the key to unlocking a weaker Dollar. Despite moderating inflation and lacklustre economic activity in the US, it had been the labour market that kept the Fed wanting rates held in restrictive territory. As cracks began to appear in the labour market through revisions to prior data and […]
