U.S. tariffs on Africa signal end of AGOA deal

In the midst of escalating trade tensions and conflicting headlines, global markets are facing increased volatility and uncertainty. The recent announcement of U.S. tariffs on Africa has sparked concerns about the future of trade relations and economic growth. CNBC Africa recently spoke with Bastian Teichgreeber, Chief Investment Officer at Prescient Investment Management, to gain insights into the market outlook and investment strategies amidst these challenges. Teichgreeber emphasized the importance of staying calm and focusing on long-term trends amid the fluctuating market conditions. He highlighted the need to consider macroeconomic factors, market sentiment, and historical evidence when making investment decisions. While some traders have priced in higher cuts from the U.S. Federal Reserve in response to the tariffs, Teichgreeber expressed skepticism about the inflationary impact of the tariffs. He suggested that lower inflation levels could prompt central banks to cut interest rates more aggressively to stimulate economic growth. However, he warned about the potential negative consequences of a trade war, such as economic contraction and supply chain disruptions. Teichgreeber also addressed concerns about potential defaults in emerging markets, noting the significant impact of the proposed tariffs on developing economies like South Africa. Despite the gloomy outlook, he emphasized the importance of diversification and risk management in protecting portfolios. Teichgreeber advised investors to hold a mix of assets, including government bonds, diversified currencies, and alternative investments to mitigate losses during market downturns. He recommended staying calm and maintaining a long-term perspective, especially for younger investors with time on their side. While political uncertainties in South Africa could add to market volatility, Teichgreeber stressed that current global events were the primary drivers of market movements. Overall, he urged investors to focus on diversification and resilience in the face of ongoing trade tensions and geopolitical risks.