The stock markets are beyond the tax dip. Is trust completely back?

The stock markets worldwide when Donald Trump announced in the garden of the White House on 2 April and thereby unleashed a trade war. The American stock market gauge S&P 500 fell by 15 percent in the following days. In the meantime there is nothing to be seen of that: trade fairs in the United States, Europe and Asia have been restored. Is investors’ confidence completely back?

A good inflation figure – prices rose by 2.3 percent last month in the US, less than expected – the S&P gave one last push yesterday. This means that the index is back at the level of early this year. Still lower than the price increases that were shown around Trump’s inauguration, but the big losses were erased again.

Moreover, the price falls were already used for the announcement of the levies, notes Martine Hafkamp from asset manager Fintessa. « In the worldwide stock market indexes, American companies have a weight of more than 70 percent, but the US is not good for 70 percent of the global economy. » It is not strange that a correction takes place with such a overvaluation.

Certainly the tech shares were already falling, since it turned out that Chinese companies too Despite export restrictions on chips Greatly capable of building competing AI models.

Break

The current price repair was deployed on April 9, the day that Trump ‘paused’ his import duties. Instead of the high rates that he had shown a week earlier on a cardboard sign in the rose garden of his official residence, a general levy of 10 percent came. High percentages only continued to apply to China. With that, Trump gave himself and the American trading partners ninety days to negotiate and close deals.

That break caused relief in the financial markets. “The markets did not know or Trump one Loose Cannon Was or that he would listen to them, « says Nico Inberg of investors platform Deadeelhouder.nl. » And he appears to be listening. « 

In addition, the precise content of the deals investors does not seem to be very much. Inberg: « In any case, there is talk, the markets assume that the negotiators will come out. »

‘Historical’ Deals

The first deal was closed on May 8, between the Americans and the United Kingdom. It has been agreed that import duties from 25 percent go down to 10 percent for British cars and even to 0 percent for steel and aluminum. In turn, the UK buys 10 billion dollars in aircraft at Boeing, American, and the Kingdom lowers on, among others, American chemicals. A « historical » deal, found British Prime Minister Keir Starmer.

For British investors, the interpretation of the agreements made up less. The London index FTSE 100 was already back at Easter at the level of January 1. Almost a week before the deal, the prices were back at the level of before the trading rates.

Last Monday Trump closed in the words of the White House « another historic deal »; This time with China. Also for that country are the taxes, which had risen to 145 percent, now in the pause position. The stock markets in Hong Kong and Shanghai rose something afterwards, but were actually over the blow a week earlier.

The breaks are only temporary and run for most countries in about two months. « Investors hope that postponement will now come from postponing, » says Hafkamp. « The soup appears to be eaten less hot every time, and investors realize that. »

The soup appears to be eaten less hot every time, and investors realize that

« You never know, but there seems to be a good chance that everyone will have a deal in two months, » in Berg also thinks. « Or that nothing happens at all with those taxes that it is bleeding to death. »

Invest in autonomy

Spring back the stock prices shows that globalization cannot just be reversed. Economies are very intertwined worldwide and the Americans can’t just get out of it. It is not without reason that exceptions are made to the taxes, Hafkamp sees.

At the same time, the shock effect has ensured that countries want to be more autonomous. « You no longer know who your friends are, » says Inberg. Europe wants to be able to do more independently. That means investments in technology, infrastructure and defense on one’s own continent.

They find their impact in the movements on the fair. The Stoxx 600, a collection of six hundred European stock market listings used as a gauge, is now more than 6.8 percent higher than was the case on January 1. The European rates are rising faster than the American: counterpart S&P 500 is now only 0.3 percent higher.

The uncertainty remains. For example, Trump announced on Monday that he wanted to lower the prices of medicines in America. The prices of pharmaceutical companies fell promptly, to be largely recovered later when it turned out that many hordes can still be taken for the prices are actually reduced.

The reverse also happens. In the wake of the President, tech companies went to Saudi Arabia this week. They announced a trits to deals: Chip companies Nvidia and AMD will deliver AI chips to the Saudis and Amazon allocates $ 5 billion to build an ‘AI zone’ in the Gulf state. And hop, the rates are rising again.

« Unrest and excitement will always stay with Trump, » says Inberg. « But in the larger whole you can assume that things will be fine again. »

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