In this podcast, Edmund Shing, Global Chief Investment Officer, discusses the potential disconnect between the stock market rebound and the risk of US economic growth slowing down.
Stock market rebound and economic reality: Despite a strong 20% rebound in US equities following tariff-related declines, survey data (consumer and business confidence) suggests a sharp slowdown in US economic growth may be ahead—highlighting a disconnect between markets and fundamentals.
Mixed economic signals: While sentiment indicators are weak, hard data like retail sales and the Atlanta Fed’s GDPNow indicator still point to solid growth (~2.5% in Q2). However, the delayed impact of higher tariffs could weigh on consumption from June onward.
Energy prices as a buffer: Falling energy costs (e.g., US gasoline down 16% YoY) are helping to contain inflation and support growth in both the US and Europe, offsetting some inflationary pressure from tariffs.
Infrastructure as a standout asset class: Listed infrastructure funds and ETFs are outperforming equities year-to-date, especially in Europe (+21% in EUR). Sub-sectors like electricity networks, clean water, and clean energy are benefiting from policy support and renewed investor interest.
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