After course turbulence as a result of Trump policy, the preliminary suspension of the US tariffs ensured relaxation. Experts see this a “Trump put” – but how sustainable is the turnaround?
• Market has been extremely volatile since the beginning of the trade dispute
• Break in the customs conflict brings relaxation with it
• Financial markets As a Vetomacht against Trump’s political excesses
Market reactions and “Trump put”
The stock markets have repeatedly fluctuations in the stock markets since US President Donald Trump. While Trump was celebrated as the “most listed president” in the US history at the start, he already added a trade dispute in January to extend for weeks and months. In the spring, the trade between the USA and China came almost to a standstill, which caused extreme shocks at the markets. Until Trump turned to a de -escalating approach, investors are increasingly afraid of an impending recession in the United States.
With Trump’s U -turn, however, there was a relaxation on the market. The S&P 500 has now clearly recovered from its April low of 4,835.04 points (April 7) and at times have a positive performance since the beginning of the year. The recovery on the stock market began when Trump announced on April 9 that the “mutual tariffs” against most countries – except China – were largely exposed. On May 12th there was another upward push after tariffs were also paused compared to Beijing.
According to “CNBC”, the ecstasy on the stock market made memories of the so -called “Trump Put” wake up. This means the assumption that a falling market prompted the president to be supported. “We know that the ‘Trump-Put’ is healthy and lively,” commented foundation expert Tom Lee, according to Marketwatch. “The White House does not want the stock market to fall.”
As Dario Perkins, Managing Director for Global Macrost Strategy at TS Lombard, told “CNBC”, however, be it “funny that the optimistic arguments for Trump 2.0 basically consist that he will undo the most of what he has done so far”. A Trump put may only be the attempt by the US president to put things back into their original condition.
Financial markets as a veto might
As early as November, Wharton Professor Jeremy Siegel pointed out that the financial markets could act as a veto might against the political excesses of the US President-be it aggressive tax cuts, mass deportations of immigrants or other decisions. Donald Trump himself, however, indicated several times this spring that he hardly noticed the drop in the exchange on the stock exchanges – an attitude that dampens the hopes of a rapid political reaction and the expectation fueled that measures to stabilize the market may have to come from another side. However, US Federal Residential Bank Jerome Powell rejected speculation about monetary policy support in mid-April.
At the beginning of April, the prospect of lacking interventions also led to noticeable nervousness in the markets. Tom Essaye, dealer and founder of Sevens Report Research, recently said in a customer notification: “The implicit Trump-Put for the S&P 500 now seems to be used at about the middle to low 5,000 mark.”
Trump’s most recent decision to suspend the tariffs against China for 90 days surprised Steven Blitz, chief economist for the USA at Globaldata TS Lombard, but not – given the extent of the previous price losses in stocks and bonds. Nevertheless, he expressed doubts about a permanent U -turn in trade policy. Rather, he suspects that the suspension was mainly due to tactical considerations in connection with the adoption of the Republican budget. “I am skeptical about Trump’s rhetoric on the subject of trading after signing the budget design,” Blitz told Marketwatch. “He needs these voices in the congress to get the project through.”
It remains to be seen in the customs conflict and on the market.
Editor finance.net
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