Looking beyond trade wars and extreme market chaos

Market participants would be forgiven for having developed a mild case of post-traumatic stress disorder over the last three months. The now infamous “Liberation Day”, the near collapse of South Africa’s government of national unity (GNU) and the drastic escalation of tensions in the Middle East were the defining events of the quarter. Portfolio manager Jithen Pillay discusses the impact of these events on equity markets and the positioning of the Allan Gray Equity Fund.

If an investor fell into a coma at the end of March and only re-emerged at the end of June, a glance at closing stock market levels would suggest nothing but good news. Both the MSCI World Index and the S&P 500 were up 11% in US dollars at the end of the quarter. However, there was a wild ride in between. Over the four days after Donald Trump announced sweeping tariffs in early April, the S&P 500 fell 12%. A subsequent pause in implementation saw the index recover all its losses by 2 May, only to power ahead 25% from the Liberation Day bottom on the back of a trade deal with China and a negotiated ceasefire in the Middle East. Both the MSCI World Index and S&P 500 ended the second quarter at all-time highs.

Read full article on: https://www.allangray.co.za/latest-insights/local-investing/looking-beyond-trade-wars-and-extreme-market-chaos/

July 13 2025 By Jithen Pillay - Allan Gray