(T) Trump 2.0 - With President Trump now in office, we began to see the shape of his policy changes.

      Key Areas:

*    Tariffs - on 01.02.25, 25% tariffs were threatened on Canada & Mexico and a further 10% on China, negotiations led to 30-day pause. The EU is likely to be next focus.

*    Immigration - a number of more stringent controls have started to be put in place.

*    Taxes - expectation is that Tax & Jobs Consolidation Act 2017 will be mostly renewed (although funding remains an open question)

*    Energy - expectations are that US federal land will be made available for oil & gas exploration; this is a row back of previous support for green initiatives.

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(I) Interest rates & inflation - January saw diverging moves from major global central banks:

*     European Central Bank (ECB) - cut interest rates by 0.25% and expectations remain that at least three more cuts will happen this year.

*     US Federal Reserve - held rates steady on the basis of US economic growth remaining solid - it did highlight through that inflation was still unresolved.

*     The Bank of Japan - raised interest rates, which are now at the highest level since 2008.

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(G) Growth

*     2.8% per annum (p.a.) - US economic growth in 2024 Q4 was at 2.3 p.a. pointing to a slight slowdown.

*     0.9% p.a. - Euroarea economic growth in 2024 - with both France & Germany's economies shrinking The ECB also reduced their growth expectations for 2025 to        0.7% p.a.

*     5% p.a. - Chinese economic growth in 2024 Driven by a very strong final quarter, buoyed by exports (possibly font-loaded because of potential US tariff fears).

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(E) Earnings - Q4 2024 company earnings look very solid (as at time of writing);

*     10.1% - estimated earnings per share growth for US companies in Q4 2024 (or 13.4% excluding energy companies).

*     1.5% - estimated earnings per share growth for euroarea companies in Q4 (or 5.35% excluding energy), a considerable drop on Q3 2024's 7.8%.

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(R) Rotations

*     AI Sector - The launch of DeepSeek created a lot of attention in the artificial intelligence (AI) sector in January. With a reported significantly lower cost of delivering        AI, it may present a significant challenge to the mega-cap US tech firms, the Magnificent 7, that have dominated the AI space in recent years NVIDIA, the star of the        AI sector up to now, lost approximately $1 trillion in its value as markets reacted to the launch.

*     Euroarea stock market - Also noteworthy in January was the strong outperformance from the euroarea stock market - growth of 6.5% in January alone. Surveys of        fund managers show significant pick up in the interest in the region.

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Warning: Past performance is not a reliable guide to future performance.

Warning: The value of your investment may go down as well as up.

Warning: These funds may be affected by changes in currency exchange rates.

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OUTLOOK for FEBRUARY 2025

*     2025 began on a positive footing, suggesting the trends of 2024 might continue.

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*     However, a number of new trends have also started to emerge, which are likely to heavily influence the outcome for 2025 as a whole:

      - The impact that a new low-cost AI model is likely to have on the Magnificent 7, who so heavily influenced returns over recent years.

      - The new US administrations tariff and tax plans look likely to present new and somewhat unpredictable challenges to the US economy.

      - The first shoots of investment beyond the US appears to be starting, with the euroarea to the fore for the first time. This may reflect an environment where the ECB          is cutting interest rates at a faster pace than its US peer.

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JANUARY 2025 Market Snapshot.

*     2025 Began on positive footing for investors.

*     Early January was dominated by concerns about the changes that would come with the new US administration. But those initial concerns faded.

*     New AI rival DeepSeek significantly impacted returns for the Magnificent 7 as the market came to terms with what it may mean for them.

*     However, we saw February begin wit a shaky start after the US began to apply tariffs to its trading partners.

*     The new US administration looks likely to present new challenges for the global and US economy to consider, and markets too.

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We encourage you to talk to your Financial Broker or Advisor before making any change to your investment portfolio.