It was going so well … until … !
Global markets, notably across Europe, Asian and Emerging [including South Africa] were on strong upward trends following the slumps caused by President Trump’s Global “tariff” onslaught in the first quarter of his second term. In the first week of April 2025 Trump suddenly made a U-turn and paused almost all the arbitrary punitive tariffs against targeted countries he had accused of cheating the USA because they had trade deficits with the USA. This prompted a remarkable recovery in the markets.
Just as an aside – following Trump’s logic – we are all being “cheated” by our local Supermarket [be it Woolworths, Checkers, Pick & Pay etc] because we all buy things from them and they don’t buy anything from us … so we have trade deficits with them and it’s their fault! So, to punish the Supermarkets, we’ll add a 50% “tariff tax” on everything we buy from them making it much more expensive for us but happily pay it over to our government! Hmmm!
Back on track … global markets hit all-time highs at the end of January before a distinctly uncertain February set in with higher than usual volatility. On the 20 February 2026 the USA Supreme Court struck down Trump’s targeted country specific tariffs by determining that he had exceeded the president’s authority and that his actions were illegal. That was well received with a market up-tick – but within 24 hours Trump announced a new 10% global tariff to replace the country specific ones struck down – so the market wobbled again.
South Africa received arguably its best Budget Speech in well over a decade on the 26 February 2026 renewing optimism for the future with economic trends showing clear signs of improvement. In summary the Budget offered real tax relief [tax brackets and medical aid etc fully adjusted for inflation]; no VAT hikes, social spending increases, smaller “sin” taxes and a more positive national debt position. Our hopes were high for continued steady growth in our clients’ local and global investment strategies!
… until it wasn’t … on 28 February 2026 Trump and Netanyahu started a war with Iran by firing missiles at the leadership of the Regime which had been so ruthless in supressing dissent from its own people [at least 6,000 civilians confirmed killed in the month of January 2026 with a further 17,000 reported deaths under investigation]. The USA military announced that they had killed the Iranian Supreme Leader along with several of his key political and military personal.
Sadly, on that same day a girls’ elementary school was bombed killing 168 Iranians, mostly young girls and their teaching staff. The school was directly adjacent to a military compound which was also bombed. The image on the left was taken on 4 March to show the buildings destroyed or damaged on 28 February 2026. No one has taken responsibility with investigations still ongoing currently.
It seems unlikely that this war will end anytime soon and it’s too early to tell whether it will end well for anyone. Oil prices will rise dramatically, markets will be negatively impacted, regional instability may well ensue, at least for the short to medium term. So investors are faced with yet another “grit it out” time while steadfastly remaining invested through the trough and out the other side again. Please refer again to the graph above where it is clear that markets will recover – with the slowest turn around being the 2008 Global financial crisis and the sharpest rebound being the 2020 Covid crisis. In May last year we drew attention to the quick turnaround after Trump’s tariff war with an amplified view which you can compare to the long- range view of markets above. In the case of the S&P 500 the peak was on 19 February 2025, the bottom at the end of March and back up to near the former peak by the end of May 2025.
We would like nothing better than to be the bearers of good tidings with our next Newsletter at the end of May 2026.
Always some good news …
The RSA Budget did lift some very useful investment friendly limits:
• Tax Free Investments increased from R36,000 to R46,000 per annum
• Retirement fund maximum deduction increased from R350,000 to R430,000 per annum
• Single Discretionary allowance doubled from R1-million to R2-million per annum
• Donations Tax Free exemption raised from R100,000 to R150,000 per annum
• Primary residence exclusion from Capital Gains Tax increased from R2-million to R3-million
If you would like to take advantage of any of the above do contact us. We are here to guide our clients
through the volatility ahead of us all. Please don’t hesitate if you are uncomfortable, fearful or would just
enjoy dropping in for a proper cup of coffee and a chat.
Warm regards,
John & The Finlaw Team
Finlaw Consulting
