Vol. 2Q25 – Newsletter
Is Trump Maleficent (the Evil Queen) or Magnificent (Prince in Disguise)? – 2Q 2025
- From the curse of reciprocal tariffs to fairy tale rally, the second quarter of 2025 was a study in contrasts. It began with extreme volatility and risk aversion in early April triggered by geopolitical shocks and trade tensions, but ended June with a powerful equity rally, fueled by strong corporate earnings, dominance in technology stocks and resilient macroeconomic and consumer data.
- Despite trade uncertainties following US’ “reciprocal tariffs,” China’s GDP expanded at a robust 5.2% in 2Q2025. This strong growth was driven by the export sector — a surprising outcome given the US’s efforts to curb Chinese exports. Domestically, however, the picture is more mixed. However, we noted a handful of government initiatives lately that could prove to be equities-friendly.
- Our outlook for the rest of the year remains constructive for equities. The initial shock from triple-digit tariffs on China and 30% tariffs on U.S. allies has subsided, prompting many to adopt a “TACO” — Trump Always Chickens Out — mentality toward tariff news. With July’s positive seasonality following a strong May–June period, barring major surprises, our view is that equities could continue to grind higher through the rest of the year.
We hope you will enjoy this read. Please reach out if you would like to discuss our funds further.
