Derayah remains cautious but optimistic as global equities navigate trade uncertainties – US markets have already gained over 5% year-to-date despite volatility from tariff announcements. Market sentiment continues to outweigh fundamentals, but if tariffs ease and deregulation advances, equities could surge further. US markets lead with 9% earnings growth and massive buybacks like Apple’s record $110bn, while Europe struggles at 2% growth despite cheaper valuations. The divergence between hard and soft economic data raises questions, but a US-China trade deal could make H2 2025 fruitful for equity investors. Focus on quality companies with long-term earnings potential and stability – remain alert for drawdown opportunities to add risk assets at attractive pricing as diversification across geographies becomes crucial.
Fixed Income / Sukuk Markets
Derayah sees compelling opportunities in Sukuk as global central banks continue rate cuts amid softening growth. We favor shorter duration positions over long-term Sukuk given fiscal uncertainties, while preferring longer duration in non-US markets where trade tensions create more accommodative conditions. GCC sukuk faces near-term volatility from Middle East tensions, but strong fiscal buffers and diversified growth support resilience. Despite elevated geopolitical risks, attractive yields and eventual trade resolution create a favorable environment – we recommend defensive positioning but prepare to add on weakness. Disclaimer: All information provided is for educational and awareness purposes only and does not constitute a recommendation or invitation to make any investment decision. Past performance is not indicative of future results. Please consult your financial advisor before making any decisions. Derayah Financial is licensed by the Capital Market Authority under license number 27-08109, dated 2008.
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