Keeping you informed

No doubt the ongoing tensions in the Middle East have caught your attention. It's important to keep you informed about current events that may impact your portfolio. Open communication is key to building a strong relationship and helping you avoid potential pitfalls in the market.

As the chart below shows, the S&P 500 (the 500 largest listed U.S. companies) has fully rebounded from its April decline (caused by Liberation Day tariffs), indicating the market has now absorbed the impact of earlier tariff worries.

S&P 500 performance over the last 3 months as at 24 June

Market resilience

The stock markets have been surprisingly resilient, with modest volatility despite the conflict in the Middle East —historical patterns show similar dips in geopolitical crises but often full recoveries within weeks. Defensive sectors like energy, utilities, and gold have outperformed; airlines continue to lag.

We are closely monitoring:

• U.S. involvement: direct intervention could sharply escalate markets and oil prices.

• Strait of Hormuz: any threat or closure would have outsized impacts.

• Diplomatic shifts or ceasefires—any easing can ease commodity and risk asset pressures.

So far, markets have demonstrated selective caution—with oil and safe-haven assets moving first, equities showing resilience. However, broader macro impacts like inflation, central-bank policy, and geopolitical spread remain critical. The next few weeks will likely determine whether this becomes just another geopolitical blip or something more consequential

Global market summary

• U.S. markets ended mixed due to fading optimism over U.S.-Iran negotiations after U.S. airstrikes, with the Federal Reserve holding rates steady amid global uncertainty.

• European markets declined as geopolitical risks overshadowed signals of looser monetary policy, with consumer confidence rising slightly but industrial and trade data lagging.

• Chinese markets weakened due to mixed macroeconomic data, where strong consumer activity was offset by slowing industrial production and persistent property sector weakness.

• New Zealand faces potential vulnerability to oil price shocks from Middle East tensions, which could worsen its terms of trade and fuel inflation, complicating the Reserve Bank of New Zealand’s policy decisions. The upcoming Official Cash Rate meeting on 9 July is anticipated to result in either a rate cut or a decision to hold rates steady.

Conclusion

Staying the course in investing is important because it helps you stay aligned with your long-term financial goals, despite short-term market fluctuations. History shows that markets go through cycles of volatility, but they tend to recover and grow over the long term. Reacting emotionally to short-term downturns often leads to poor timing—selling low and buying high. The portfolios we design are appropriately diversified and aligned with your goals to weather different market conditions. Sticking to your strategy avoids unnecessary disruptions.

If you would like to discuss your investment portfolio, retirement planning needs, goals-based investing approach, or any other financial planning matters, please feel free to give our office a call at 09 553 8928 or email us at info@trilogyfs.co.nz.

We are always happy to help.

Sincerely,

The Team at Trilogy Financial Solutions