Trade Wars | Recession | What about your Portfolio?

🇿🇦 South African Budget & Political Risk

• Budget framework passed (barely) – VAT increase to 15.5% effective 1 May.
• GNU under pressure as ANC signals reformulation talks with partners.
• Rand volatility: Touched nearly R19.90/USD before recovering to ~R18.70.

💥 Global Markets in Turmoil

• S&P 500 down 18.25%, Nasdaq down 22.5%.
• Massive selloff: One of the steepest 4-day drops since 1950.
• But historically, markets rebound over 1, 3, and 5 years post similar dips.

S&P500 | Weekly | 08 April 2025

🇺🇸 US Tariffs – Trump’s Economic Disruption

• 104% tariffs on Chinese goods kick in; highest in 100+ years.
• Aimed at reshaping global trade, raising revenue (~$600B–$1T est).
• Massive uncertainty over whether Trump reverses course.
• Impacts already visible: Nintendo delays Switch 2 US preorders.

🌐 Global Repercussions & Recession Risk

• Supply chain shocks, rising costs, and job losses in producing countries (Vietnam, China).
• Major US banks now see a >55% chance of global recession.
• Countries shifting alliances; US being carved out.

🏦 US Treasuries Drama

• Wild 10-year yield swings overnight – unusual volume raises eyebrows.
• Could China be retaliating by offloading US debt?

💡 What To Do As An Investor

• Avoid panic. Focus on quality and defensive stocks.
• Opportunities:
  • SA: Capitec, Shoprite*, BIDCorp, RSA Retail Savings Bonds
  • Global: Ferrari (Race), Johnson & Johnson, ASML, Europe
  • Sectors: Healthcare (STXHLT), Tobacco, Alcohol, Staples

Simon Brown

* I hold ungeared positions.

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Chapters
00:00 Market Overview and Budget Implications
02:59 Global Economic Concerns and Market Reactions
05:54 Trade Wars and Tariff Impacts
09:10 Investment Strategies in Uncertain Times
12:04 Sector Analysis: Opportunities and Risks
14:58 Future Market Predictions and Closing Thoughts