Markets take a tumble, as volatility rules. The TPP weekend wrap

In the UK stocks fell as the FTSE 100 had its worst week of the year so far.

London’s benchmark equity index fell 1.47% this week, marking its worst performance of 2025. The confusion over what Trump says and what will ultimately happen is making investors nervous. Markets don’t like uncertainty and right now, nothing is certain.

Investors also mulled the latest data from mortgage lender Halifax, which showed that house prices unexpectedly dipped in February. Prices nudged down 0.1% following a 0.6% increase in January, and versus expectations for them to tick up 0.3%. On the year, house prices were up 2.9% in February, unchanged on the previous month.

The average price of a home stood at £298,602, down from £298,815.

Net mortgage lending rose to GBP 4.207 billion in January from GBP 3.343 billion in December, the most since September 2022, the Bank of England (BoE) said. First-time buyers of homes have been rushing to take advantage of a temporary reduction in stamp duty that expires at the end of March.

Industry research released showed that retail footfall nudged higher in February, although at a far slower rate than seen in January. According to the latest BRC-Sensormatic monitor, footfall increased by 0.2% year-on-year. The second consecutive monthly increase, it was, however, well below January’s 6.6% jump.

Andy Sumpter, EMEA retail consultant at Sensormatic, said: "After January’s jump-start, retail footfall stalled, with retailers seeing only the slimmest improvements.

Europe

The pan-European STOXX Europe 600 Index ended the week 0.69% lower, snapping weeks of gains. Uncertainty about U.S. trade policy weighed on investor sentiment. Still, the prospect of increased spending on defence and infrastructure by Germany and the European Union helped to moderate losses. Major stock indexes posted mixed returns. Germany’s DAX rose 2.03%, while France’s CAC 40 Index eked out a 0.11% gain and Italy’s FTSE MIB slipped 0.16%,

The European Central Bank cut its key deposit rate by a quarter of a percentage point to 2.5%, as expected. ECB President Christine Lagarde said that rates were now “meaningfully less restrictive.” Touching on a potential trade war with the U.S. and other risks, she said: “We have huge uncertainty. Some people have used the adjective ‘phenomenal’ uncertainty.” This uncertainty already appears to be affecting investment and exports, prompting the ECB to lower its forecast for eurozone economic growth to 0.9% for 2025. The central bank also revised its projection for inflation to 2.3% for 2025, up from the 2.1% expected three months ago.

Meanwhile, the latest data indicated that annual inflation in the eurozone slowed to 2.4% in January from 2.5% in December. The core rate, which excludes volatile energy and non-alcoholic beverages prices, fell to 2.6% from 2.7%.

In Germany, Friedrich Merz’s conservative alliance and the Social Democratic Party, which are in talks to form the next government, agreed to create an off-balance sheet EUR 500 billion infrastructure fund, exempt defence spending above 1% of gross domestic product (GDP) from the constitutional borrowing limit, and loosen debt rules for states. The proposals will be put before parliament in the coming week. After the accord was announced, the yield on Germany’s 10-year Bund posted its biggest daily increase since just after the Berlin Wall fell in 1990. European Union leaders said they backed plans to jointly borrow EUR 150 billion to spend on their militaries amid fears that Europe could no longer depend on U.S. military aid.

The U.S.

U.S. stocks declined during what ended as the worst week for some major indexes since early September. The S&P 500 Index, Nasdaq Composite, S&P MidCap 400 Index, and Russell 2000 Index all fell by over 3%, while the Dow Jones Industrial Average shed 2.37%, erasing most of its year-to-date gains.

During trading on Friday The Nasdaq 100 Index sank into a correction, as investors continue to sour on the megacap technology stocks that led the stock market rally over the past two years.

The index was down 0.8% at lunchtime in New York and making it 10.2% below a peak hit just last month, putting it past the 10% threshold that represents a market correction. Later in the day stocks did rebound to end the day on a positive note, but still way down on the week.

Ongoing uncertainty around trade policy remained a focal point throughout the week as Tuesday marked the deadline for President Donald Trump’s previously announced tariffs of 25% on Canadian and Mexican imports along with an additional 10% on Chinese imports. The Trump administration announced a slew of exemptions and delays for the tariffs later in the week—including an announcement that goods covered by the U.S.-Mexico-Canada Agreement would be exempt for one month—however, the continued uncertainty and changing policies appeared to take a toll on investor sentiment during the week.

On Wednesday, the Federal Reserve released its Beige Book—a summary of economic conditions in each Fed region—which noted that “overall economic activity rose slightly since mid-January,” but “consumer spending was lower,” “price sensitivity” rose, and “prices increased moderately in most districts.” Tariffs were mentioned 49 times in the report, and most districts reported continued uncertainty regarding the potential impacts of the Trump administration’s new policies.

Speaking on Friday afternoon, Fed Chair Jerome Powell referenced this heightened uncertainty with regards to “trade, immigration, fiscal policy, and regulation” and said that policymakers “do not need to be in a hurry” and will “wait for greater clarity” before adjusting monetary policy further.

Asia

The performance of Japan’s stock markets was mixed over the week, with the Nikkei 225 Index down 0.72% and the broader TOPIX Index gaining about 1.0%. Uncertainty about U.S. President Donald Trump’s tariff and other policies dented global risk appetite. The yen gained on safe-haven demand, strengthening to around the middle of the JPY 147 range against the U.S. dollar, from about 150.6 at the end of the prior week.

The yield on the 10-year Japanese government bond rose to 1.53% from the previous week’s 1.37%, reaching its highest level since 2008 on expectations that the Bank of Japan (BoJ) will continue raising interest rates this year. Japan’s government is ready to officially announce the end of long-term price deflation, with Economy Minister Ryosei Akazawa asserting that all the indicators used to assess deflation have turned positive. This would mark a notable shift in the government’s economic stance and could influence the timing of the BoJ’s next hike. The BoJ reiterated its core message that it would raise interest rates if its forecasts are realized.

Mainland Chinese stock markets advanced for the week after Beijing unveiled economic growth targets in line with forecasts and signalled more stimulus later this year amid an escalating U.S. trade war. The onshore benchmark CSI 300 Index added 1.39% and the Shanghai Composite Index gained 1.56% in local currency terms, according to FactSet. In Hong Kong, the benchmark Hang Seng Index rose 5.94%.

China unveiled several key targets at the recent National People’s Congress (NPC) meeting, an annual event in which the central government announces its economic priorities for the coming year. For 2025, China set a growth target of 5% for the third straight year. Officials also set a fiscal deficit goal of about 4% of gross domestic product—the highest level since 1994, according to Bloomberg—and reduced its annual inflation target to about 2%, the lowest level since 2003, reflecting deflationary pressures in the economy.

The Week Ahead

UK economic data and US inflation figures set the scene for another busy week ahead on the macroeconomic front. After fears around the impact of Trump’s tariffs rattled stock markets this week, attention will be on Wednesday’s US consumer price index reading.

Such concerns have circled both inflation and US economic growth, clouding the path of Federal Reserve rate cuts this year. Expectations are for both headline and core inflation to have moderated in February to 2.9% and 3.1% respectively, against the 3.0% and 3.1% seen a month earlier.

In the UK, Friday’s gross domestic product (GDP) data for January will be the focus, after the economy drummed up growth of 0.4% in December following a muted few months. According to Trading Economics, growth of 0.1% is forecast for the first month of the year, reflecting another slow month.

IG analysts noted a pick-up was anticipated in mid-2025, likely leaving the Bank of England able to continue cutting interest rates ahead.

UK house price figures on Thursday and retail sales data on Tuesday mark other notable announcements in the coming week.

Following a quiet Monday, a busier Tuesday is set to feature Persimmon, alongside the likes of Kier, Domino's, Icap Group, Spirax and Globaldata PLC.

On Wednesday we’ll hear from Balfour Beatty, The Gym Group, Legal & General, Oensionbee and Hochschild Mining.

Trainline, Halma, Bridgepoint, Gem Diamonds, Helios Towers and Savills follow on Thursday, before gross domestic product data for January caps off the week in London.

In the US, Oracle, Adobe and DocuSign are among companies in line to report, while inflation figures will be in focus on Wednesday.

It’s going to be another busy week of earnings and economic data, but will Trump make it hard to focus on figures that will be quickly altered by the outcomes of……….whatever it is he is trying to do? We have no doubt. It’s going to be volatile and the only thing we can know for sure is that at the end of the week, stocks will either be higher or lower, anyone who tells you they know which simply hasn’t been paying attention for the last few weeks.

TPP portfolios continue to trade around the noise and most strategies are continuing to post profits in a year when the S&P 500 is now down -1.68% and the Nasdaq Composite is down -5.63% and 10% off its highs.

Just to finish with a point of interest for any stay-at-home investors out there, Tesla is now down over 30% year-to-date. In fact, they have declined every single week since Elon Musk went to Washington. His move into politics has lost him a loyal following as Europe in particular protests against his far-right political views.

According to a new report on Wednesday, sales in Europe continue to decline. For example, Tesla has seen a sales decline of 76 percent in Germany. In February 2025, Tesla only delivered 1,429 new vehicles in Germany, compared to more than 6,000 in February 2024. This data is especially concerning for Tesla, as Germany is Europe's largest EV market. Musk recently backed Germany's far-right AfD party in the country's recent elections.

According to the European Automobile Manufacturers’ Association, Tesla vehicle registrations across the EU, including the UK, Iceland, Norway, Switzerland and Liechtenstein fell by 45 per cent from January 2024 to January 2025. It’s not just Europe either. Tesla sales in Australia fell by nearly 72 per cent in February. The company only sold 1,592 vehicles last month compared to the 5,665 it sold in the previous year.

Here's to another good week in the market for TPP. We tread with caution and stay away from overpriced stocks. The market has been punishing this year, but that’s when our actively traded strategies get a chance to shine. 2025 will be the year for a TPP portfolio. For more information, please contact us here.

Disclaimer: The views expressed in this article are the author’s own and should not be considered in rendering any legal, business or financial advice.

Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to the corresponding past performance.

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