US tariffs have caused stock markets around the world to plunge (Image: Getty)
Analysts at Barclays bank have even advised some clients to buy up shares of some of the companies listed on the UK’s blue chip index with predictions they may even gain from the US President Donald Trump‘s decision to slap tariffs on British goods.
We look at the winners who are likely to cash in on Trump’s tariff turmoil.
Many of the companies listed on the FTSE 100 also do huge amounts of business in Europe and Asia, and are regarded as largely immune from macroeconomic shocks, which is why Barclays has placed a ‘buy’ notice on FTSE 100 stocks.
Investors appear to have embraced this week’s sell off, literally. Interactive Investor, the UK’s second largest DIY investment platform, reports that investors flocked to its website to buy, not sell, FTSE 100 shares on Monday.
Meanwhile mortgage lenders have been cutting their fixed-rate deals with some deals on two-year mortgage rates 0.20% or around £300 a year cheaper on an average mortgage – over 25 years that’s a £5,000 saving.
Mortgage borrowers coming to the end of a fixed-rate deal or borowers looking to switch from a variable rate can take advantage of the Trump slump. A number of lenders have repriced their fixed rate products because of a tariff induced fall in Swap rates.
TSB have announced cuts of up to 0.25%, Gen H cuts of up to 0.2% and Pepper by up to 0.4%.
Andrew Montlake, managing director at Coreco, told news agency Newspage that if one of the big six lenders comes out with some sizeable cuts, then a mini rate war could break out.
He said: “That said, we still do not expect massive drops given the volatile market and the potential for a sudden change of direction from the White House.”
Harry Goodliffe, director at HTG Mortgages said a trade war could fuel talk of Bank of England rate cuts sooner rather than later.
He said: “If this momentum sticks, we could see a wave of reductions from bigger lenders, too. Borrowers may want to keep their eyes peeled — what looks like a short-term blip could quickly turn into a golden window.”
Stephen Perkins, managing director at Yellow Brick Mortgages, said: “After lenders have patiently waited for a recovery that hasn’t materialised, they have finally started to pass on the swap rate reductions to borrowers. However, we are yet to see one of the big six lenders show their cards and start the rate war proper.”
Investors may also be able to grab a bargain. Since Trump’s announcement of so-called ‘reciprocal tariffs’ sparked market turmoil on Wednesday evening, Interactive Investor said it had seen “more buys than sells”, with 61% of trades being purchases and 39% sales. This would sugges many investors are viewing the dip as a buying opportunity rather than heading for the exit.
UK-listed shares in Rolls Royce and Legal &General were the first and second most popular buys while tech giant Nvidia was also traded heavily.
Richard Hunter, head of markets at Interactive Investor, said: “There is evidence that our customers are attempting to take advantage of market volatility by buying quality companies during the dip. At the eye of the storm has been the ‘Magnificent Seven’, previously drivers of exceptional market performance over the last couple of years. So far this year, previous AI market darling Nvidia, for example, has lost 29% and is 35% lower than its record high. In addition, Tesla has declined by 38% this year and Amazon by 20%.
“Military tensions have resulted in a large actual or proposed bout of increased defence spending, and Interactive Investor investors appear to have been riding this wave. BAE Systems and Rolls-Royce have now risen by 37% and 13.5% respectively in the year to date. Indeed, Rolls-Royce has seen an additional boost having implemented a turnaround plan which firmly placed it in investors’ good books. These shares have risen by 56% over the last year, with little sign of the positive momentum fading.”
Some in the UK may be able to take advantage of the so-called Trump slump (Image: Getty)
Pension savers may be feeling the pinch but Claire Trott, divisional director – retirement and holistic planning at St. James’s Place, said not all pensionswill see the impact of the tariffs.
She said: “State pension and DB schemes won’t suffer, annuities will also see no impact, while those invested in property also won’t see the volatility of the stock markets.
“For those relying on a private pension, think about how much you need to take out and whether you have any other options such as cash savings to fall back on during this period. For anyone recently retired or approaching retirement, if possible, plan to not take too much out of your pension too soon. Phasing tax-free cash withdrawals will allow you to remain invested for longer and ride out this period of volatility.
“For those where retirement is further away, there is still a lot of time to take stock and seek advice. Understanding where you are invested is a good place to start when assessing the impact of the current scenario on your pension over the long term. It’s also worth considering if you have lifestyling built into your preparation. This may or may not be appropriate depending on what you want to do in the long run with your savings but could be a good option for those looking to ensure their funds are in more stable and low risk investments in the final years before retirement.”
