By Naomi Rovnick and Amanda Cooper
London (Reuters) – Global markets tell contradictory stories about the possible longer -term impact of American tariffs on growth, a schism which, according to investors, means that stocks or obligations could see a strong correction once clear, which is fair.
The erratic approach of American president Donald Trump to trade policy which generated so much volatility this year seems to have left suspicious markets to react to his almost daily announcements on whom, or what, could be affected by prices.
The latest objective is Canada, which said Thursday that Trump will face an obligation of 35%, while most other business partners will obtain general prices of 15%or 20%, barely arousing wider floating. An advertisement on Europe is imminent.
Investors say that this apparent composure concerns less the confidence in a more benign perspective in the longer term, and more typical of a bull market at a late stage, where the optimists jostle to catch the rally before it walks away, while pessimists are quietly preparing for the most delicate moments to come.
In a corner are risky active ingredients such as actions and cryptocurrencies. Wall Street’s actions have reached a record, fueled by enthusiasm around artificial intelligence and the prospect of a series of interest rate reductions in the federal reserve while the economy slows down gradually and that the inflation of prices turns out to date. Bitcoin is near a record of $ 112,000.
In the other corner are state obligations, gold and even crude oil, which all reflect the belief that prices could derail the American economy and growth everywhere will vacillate.
Miton’s chief investment director Neil Birrell said the second half of this year will be when Trump’s prices are obvious.
“It is difficult for me to look at all of this with any form of confidence or certainty,” he said, referring to the unpredictability of the development of Trump policies and the possible impact of his “Big Beautiful Bill”.
His main concern about actions was the strong participation of American households in Wall Street, where a drop could quickly spread on a global scale.
“All stress in the American economy which has an impact on the consumer and then has an impact on the stock markets becomes a rather brutal and bloody descending spiral.”
The 90 -day Trump break after the announcement of Trump’s “release day” price was replaced by an application of state -of -the -art and small business dispersion statements, just in front of the second trimester results which could produce the first clues to the severity of business profits.
“Things have settled but not positively,” said Amundi chief of the Macro Macroine Mahmood Pradhan.
“The effective rate rate for all imports entering the United States, if you calculate an average at all levels, would be around 15%,” he said. “This is largely negative for growth in all countries involved in world trade.”
Last month, the World Bank reduced its global growth forecasts for 2025 per four tenths of percentage point to 2.3%, saying that higher prices and increased uncertainty laid a “significant front wind” for almost all economies.
With so much uncertainty that goes beyond American assets, investors’ species have flowed elsewhere for a large part of this year, such as European actions and bonds, Chinese technological actions or emerging market currencies.
The lubrication of the wheels of the stock market rally was the anticipation that the fed chair, Jerome Powell, will transform at Trump pressure to offer a rapid series of rate reductions.
However, the data was too strong to justify an aggressive relaxation of monetary policy and too soft to affirm that the prices have no effect. American employment figures show that the economy still creates jobs in a farm clip, while surveys on commercial activity show that factories and services are decreasing.
Meanwhile, tax reduction and Trump Trump expenses will add 3.3 billions of additional dollars to the national deficit.
The 20 -year -old American treasury yields (^ TNX) withdrew peaks from 15 months from January to 4.8% to 4.35%.
“The bonds are much more focused on growth (down) than on inflation, so when you see an increase in business war announcements, bond yields are tilted towards lower growth and rate reductions. But shares are embraced because prices have not yet appeared in the number of inflation,” said Joost Van Leenders, a main investment strategist Lanschot Kempen,.
“We do not think that this can continue,” he said, adding that it remains neutral on the actions, with a small overweight position in state bonds.
Gold (GC = F) organized a rally of 26% this year, exceeding $ 3,300 per coverage, serving as a coverage against macro and geopolitical uncertainty, as well as an alternative to the dollar, the largest pricing victim, which has lost more than 10% of value this year against a basket of currencies.
Kevin Thozet, member of the investment committee at the director of French assets Carmignac, said that he is hiding against a drop in the American stock market, but thinks that this is unlikely at the moment because retail merchants are diving to buy market cuts.
Further on, he said that the Trump tax reduction bill could compensate for part of the prices’ impact, but that the additional debt he could take to finance these reductions could stimulate the treasury yield to 5% in the next three months, a level whose political decision -makers are concerned given its impact on households, businesses and the government.
“We see significant cracks in the American markets, even if the Fed has ample space to cut,” he said.
(Report by Amanda Cooper and Naomi Rovnick; edition by Elaine Hardcastle)
