- President Trump broke the break button on some of his prices Friday, before the big banks were head-to-face with analysts on their advice on the results. The president’s announcement on social networks had an immediate impact on the markets, the NASDAQ ending the day by 12%, while the S&P 500 increased by more than 9%. Individual shares have climbed: Delta Air Lines raised 23%, Nvidia increased by more than 18%and Apple, which experienced more than $ 770 billion in value evaporating after the concerns about the retail price of iPhones, closed the day by 15%.
The stock markets broke out with a torrential increase in optimism following the publication of President Donald Trump on social achievement on break some of his prices, and comments from the secretary of the Treasury Scott Bessent reassuring the world that the United States is not involved in a trade war.
Despite the brief respite from the carnage of the week, however, frightening uncertainty is looming over the next 90 days.
“Each portfolio manager is trying to determine if you can draw a straight line to future negotiations,” said Jake Schurmeier, Harbor Capital portfolio director and former member of the Markets Bank of New York group of the Federal Reserve Bank. “We get another 90 days before having to do this song and dance again.”
At a level level: President Trump announced a multitude of prices during a Roseraie address last week which had been telegraphed from his campaign. Investors had evaluated the prices and the subsequent impact on commercial policy, but the extent of the prices was greater than expected. The markets dropped in the negotiation days after Trump’s announcement. The word “recession” – generally avowing At all costs – arise a subject of discussion, and the chances that the United States stumbled headlong in a rose, according to Jpmorgan Chase, whose CEO Jamie Dimon publicly announced that a recession was a “probable result” after the tumult price. Trump said Dimon’s comments took into account his decision to issue the partial break on Wednesday.
After Trump’s announcement, the markets organized a rally defying gravity, the Nasdaq ending the day by 12%, while the S&P 500 increased by more than 9%.
Michael Orlando, executive director of the JP Morgan Center for Commodities and Energy Management from the University of Colorado Denver, said Fortune The price break is a relief, mainly uncertainty, which had continued to weigh on stock prices. But the greatest development, which emerged during the weekend, was that we, the treasury bills, ceased to look like a port in complete safety in a period of uncertainty and began to look like a risky bet, themselves, “said Orlando.
“I think this price of” cooling “tariff has done a lot to dispel the concerns that the president may not understand the idea of trade gains,” added Orlando.
But the question remains: what is going on?
“ Ample air cover ”
First, there is consideration as to the duration of damage caused by prices, as well as the cost of omnipresent economic uncertainty, said Schurmeier. All planning of capital expenses and major strategic movements has just been thrown out the window because there is no certainty, he said.
The portfolio manager noted that there will be critical signs to seek during income calls between large companies and analysts this week, in particular with regard to the way CEOs and financial directors plan to answer questions on prices – and all that could cause disruption.
“This provides large air coverage to drop any bad news,” said Schurmeier. “All bad news you have, go out this trimester.”
Currency managers will also look to see how major bank leaders, such as Dimon, will talk about how their customers react, the prospect of the activity of mergers and acquisitions and advice on their desire to provide credit, added Schurmeier. Currently, it is too early to talk about potential loss of loan, but other subjects will be indicative of knowing if there is a stronger commercial feeling.
“Everything they say will be quite instructive,” said Schurmeier.
China: from 104% to 125%
The other problem of major buildings is China.
The next few weeks are likely to focus on the impact of new additional reprisals after China is committed to “fighting to end” even before Trump increases the country’s prices at 125%. Trump a counters without break on the prices of China and rather traveled them because of the “disrespect” of China, wrote the president on social networks.
Idanna Appio, portfolio manager at First Eagle Investments and former deputy chief of the World Economic Analysis of the Federal Reserve Bank of New York, said that the situation with China is extremely serious, tariff levels to the potential of a broken commercial relationship between the two largest economies in the world.
It is not known if Trump’s last decision pushes China to negotiations on prices or if economic tensions will reach such a level that China becomes more conflict in the geopolitical sphere, Appio said.
“Given the strong escalation and economic friction between the United States and China, which is obviously not good for the world economy, this overflow on the geopolitical side?” She said. “If they feel that he has nothing more to lose … Does China are starting to push in other areas?” I hope the answer is “no. »»
Economic perspectives: “very tenuous”
Beyond what could happen with China, the American economy remains in a “very tenuous place,” said Appio.
She put a recession in her forecasts, but Appio said that she did not know if she suppressed it at this stage because of imminent uncertainty even if the prices are not as large as those initially announced last week. In addition, there is still room for additional tariff action and few uncertainties have been really eliminated at this stage.
“The fear that I have is that we end up repeating this whole exercise in 90 days,” said Appio. “It was a roller coaster, to say the least.”
This story was initially presented on Fortune.com
