Tariffs
In his latest Thoughts Of The Day, Peter Berezin discusses the different moving parts of the global economy today and the potential impact of Trump's policies.
Europe is about to become President Trump’s next target. The good news: a US/EU trade war will be short as common ground to achieve a deal exists. The bad news: European assets remain at the mercy of heightened uncertainty. How should investors position themselves in this tricky context?
Some thoughts on this morning's employment data and Treasury Secretary Bessent's recent attempts to talk down the 10-year Treasury yield.
This week, our three screeners focus on providing equity insights based on the impact of tariffs, and trade policy uncertainty in general, helping clients identify stocks exposed to these shocks.
All the growth in the US labour supply since mid-2023 has come from immigration. This means if net immigration comes to a grinding halt, as Trump wants, it will hurt economic growth as well as keep the labour market supply-constrained. An increase in productivity growth could save the day, both to maintain growth and to kill inflation. Yet hopes that AI is about to usher an imminent and sustained boost to productivity growth are misplaced. Hence, expect a slowdown in US growth combined with inflation stuck close to 3 percent, a combination that I call a ‘mini stagflation’. We go through the investment implications. Plus: Tactically overweight Portugal versus Europe.
Our Portfolio Allocation Summary for January 2025.
This Insight is a post mortem on Canadian assets, after the threat of tariff wars.
We revisit our view on the “fiscal gravy train” as well as President Trump’s negotiating style. We re-print parts of our March 2024 net assessment, particularly for the benefit of our new clients who have joined us at BCA Research. Our analysis of President Trump’s first term is our guide into how the White House will negotiate future trade wars and skirmishes.
We expect market volatility to remain elevated due to uncertain economic, monetary, and trade policies. Barbell is the best portfolio strategy at this time. We recommend boosting defensive allocations to lower portfolio beta. We downgrade Industrials to equal weight and upgrade Pharma to overweight.