05 June 2025
Early Days
In May 2025, global equity markets faced heightened volatility amid a mix of geopolitical developments, fiscal risks, and economic data. A key bright spot came from trade diplomacy, where the U.S. and China reached a preliminary agreement to lower tariffs on a range of industrial and consumer goods. While not a full rollback of previous trade barriers, the deal marked a significant thaw in relations and lifted investor sentiment, particularly in sectors heavily exposed to U.S.-China trade flows such as technology and industrials.
The U.S. also finalized a streamlined trade agreement with the UK early in the month, focusing on reducing tariffs for autos, metals, and agricultural products. Though limited in scope, the deal signals renewed U.S. momentum in bilateral trade negotiations. Market participants anticipate further trade pacts may follow, as the U.S. seeks to strengthen strategic economic ties in both Europe and Asia.
On the macro front, U.S. economic data was mixed. Consumer spending remained resilient, but manufacturing activity softened under the weight of rising input costs and geopolitical uncertainty. The fiscal outlook deteriorated sharply after a weak Treasury auction saw 20-year yields climb above 5%, reflecting growing investor concern over the U.S.’s mounting deficits and debt load. Moody’s downgrade of the U.S. credit rating further underscored these fiscal risks, as total federal debt surpassed $36 trillion.
Product Recommendation
| EQUITY FUND | |
|---|---|
| MGSED A | MGSED invests in Sharia-compliant Equities Abroad listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
| MASED A | MASED invests in Sharia-compliant Equities in Asia listed in the Sharia Securities List. Categorized as a Long-Term investment with high risk. Investors bear the risk associated with the equity portfolio. |
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The opinions expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for individuals or specific mutual fund or investment products. It is intended solely to provide education about the financial industry. Views reflected in the content may change at any time without notice. All performance data and investment returns mentioned in this article cannot be used as a basis for calculation to buy or sell a mutual fund. This data is performance records based on historical data and is not a guarantee of future mutual fund performance. Investment through mutual funds carries risks. Investors are required to read and understand the prospectus before deciding to invest through mutual funds.
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