Equity markets are grappling with two conflicting vectors. The first is the trajectory of global growth. The second the future trajectory of company earnings. We assess the risk to rising inflation driven by an oil price shock as having a greater impact than Trump??s policy framework. While trade protectionism is a big deal the shortages developing within the oil market and the impact that this will have on US economic growth is more significant. The objective of a trade war with China can therefore not be to win but rather to negotiate a range of concessions to open Chinese markets to US companies. China may relinquish a bit of control but not much. Instead we see a heightened risk of it devaluing its currency and with it the broader global economy. For these reasons we remain conservatively positioned in both stock selection and asset allocation.

The portfolio has a high level of cash providing a degree of hedging in a weak month. However, the portfolio also contains shares that have performed creditably over the month. The most attractive returns were more among the traditional companies rather than the technology companies such as Amazon and Apple. Boeing was the standout performer, returning 8.5 percent for the portfolio, while BHP returned 3.8 percent. The US-China trade tensions are unlikely to significantly impact Boeing as it has large backlogs, revealing its defensiveness in a time of uncertainty. The transactions processors - Visa and Mastercard - also had returns of 2.2 percent and 3.3 percent respectively, reflecting their relative lack of exposure to the US-China dispute.