The president Donald Trump he admits not to exclude the recession and the bag of Wall Street sinks And it burns about a thousand billion capitalization, dragged by Nasdaq (-4%) and the magnificent 7. Heavy Nvidia, Apple and Microsoft. Crash also of Tesla (-15%) which burns over 100 billion on which the drop in sales in China weighs (-49%). The beginning of the week was therefore dramatically negative for Wall Street, with the three main indices that zeroed the earnings recorded after the American presidential elections of November. The truth is that the American market had risen a lot, not always supported by the fundamentals and therefore one correction was expected as well as greeting.
The white house minimizes
The White House tries to minimize the collapse of Wall Street by claiming that there is one difference between the bag and the situation of the business in the United States.
“We are witnessing a strong divergence between the animal spirits of the share market and what we are actually seeing happening by companies and corporate leaders, and the latter is obviously more significant than the first because it concerns what the economy reserves in the medium and long term,” he said in a note through his spokesperson, Kush Desai.
Spasmodic waiting for macro data
The turbulence on the stock market could also continue this week, since they are Several important economic data is planned: the most important appointment of the week is tomorrow, Wednesday 12 March, when the index of Consumer prices of February, which will include the first month full month of the Trump administration since she returned to the White House in late January.
It will be one of the latest important data that the Federal Reserve will receive before his next meeting of 18-19 Marchafter a series of not brilliant readings for the US economy. Last Friday the official report on the monthly employment places showed an addition of 151,000 jobs In February, slightly below expectations, with the unemployment rate that went up to 4.1%.
Who is at risk of duties?
With Trump’s return to the White House, investors around the world are still digesting the change of direction -SettoLinea Andrew Rymer, Strategic Research Unit, Schroders -unlike his first term, says the expert, the Actions on the commercial front They were a political priority and the rules of the game are changing.
Trump has been unequivocal on trade and his political agenda gives precedence to duties as a tool to protect national industries and jobs. He has often mentioned commercial imbalances as a fundamental concern, both during his first term and more recently. THE commercial deficits of the United States (in which the value of imports exceeds that of exports) with i partner countries They therefore offer an indicator to assess the tariff risk.
Commercial deficits are only one of the parameters with which Trump could measure commercial relations. Previously, he mentioned currency manipulation, iniquitous national subsidies and the theft of intellectual property between the potential catalysts of a tariff action. With the preparation of mutual duties, the average actual rate of duties is another metric to consider.
China, European Union and Mexico I am obviously at the top of the list. However, explains Rymer, there are other countries that could attract attention, including various exporting Asian economies. Trump, continues the analyst, agreed a free trade agreement revised with the South Korea In his first term, but several economies in the region have great deficits with the United States.
For those who export to the United States, the key demand is which percentage of GDP represent exports to the United States. From here, adds the expert, you can understand what the economic impact would be. Mexico and Canada They are the most affected by this aspect. Also Asian exporters, Taiwan and Thailandare exposed to a considerable extent.
Which share markets have greater exposure?
For equity investors, evaluating the individual exposure of a market to the United States in terms of revenues is equally important. Which percentage of revenues could undergo a negative impact from the imposition of duties?
Looking at the equity markets of the economies with which the United States have a commercial deficit, and therefore are more likely to the sights of the duties, Taiwan It clearly distinguishes itself from the other markets, with 43% of the revenues deriving from the United States. Microchips are the main export and Taiwan is the most avant -garde chip manufacturer in the world. Consequently, it could be expected that such a strategically important resource can be exempt or benefit from some facilities, even if this is not guaranteed. Also Europe (excluding the United Kingdom) It stands out, as well as various Asian markets.
The implications for global share investors
There are different Economies at risk Due to the duties, considering those with which the United States have a commercial deficit. However, there is some nuances when it comes to the economic and market impact.
The duties have the potential to upset the supply chains Both for US companies and for international ones listed on the stock exchange. Companies of the economies concerned could also suffer a reduction in competitiveness or reduced access to the market. The potential Reddirizing of trade Far from the United States would determine chain effects for companies around the world. The same could be supported for US companies, if mutual measures were implemented. The ability of companies affected to transfer the tariff impact on customers is a key factor. Some companies may be more isolated, or able to bear the duties than others.
If the dollar American it will strengthen Compared to the local currency, in response to duties on partner economies, this would represent a potential obstacle for investors’ returns from partner markets in terms of US dollars. The dollar is also relevant for US multinationals with international revenues. It is worth remembering, concludes the expert, that the generation of revenues of the’s & p 500 It is nationally only for about 59%. That is, US companies earn over 40% of their non -US market revenues. In addition to the impact of the currency conversion, these companies could also be subject to duties or retaliation.
