Trade

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?

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.   

Our Portfolio Allocation Summary for January 2025.

This is a follow-up report on Bessenomics – the policy mix that US Treasury Secretary Scott Bessent plans to pursue. The direction of US and global financial markets depends on the amount of fiscal tightening required to bring down US interest rates. Can the Trump administration cut fiscal spending just enough to bring down US bond yields but not cause a recession?

The 10% tariff hike announced on Saturday will likely serve as the opening salvo in a broader wave of protectionist measures. In this report, we assess the increase in US import tariffs on China. While the direct impact on China’s overall economy may be manageable, the country’s economy faces significant risks from potential disruptions in global trade.

Trump’s Tariff ObsessionDonald Trump was elected on his promise to reduce inflation, curb illegal immigration, and expunge woke ideology. Tariffs were never very high on the agenda for most voters. Nevertheless, Trump has been obsessed with tariffs for years, largely because he thinks of…

Markets and forecasters anticipate a “Golden Age” for Trump’s America, with US growth expectations soaring while the rest of the world lags. However, this extreme optimism means that there is a lot of room for disappointment. Cooling income growth, weak housing and less deficit spending than expected will result in US growth underperforming expectations. Maintain a modest underweight to equities and modest overweight to fixed income. US markets have become more expensive relative to the rest of the world even as quality differentials have stabilized. Prepare to downgrade US equities to underweight and to upgrade Euro Area and China to overweight. We will wait to pull the trigger until we have more clarity on trade policy and when the dollar's momentum turns negative.