A new shortcut appears in Wall Street to explain investors’ reaction to the tariff around which President Trump revolves, unequal: Taco.
It was formulated by the Financial Times Robert Armstrong on May 2 columnThe term tongue in the cheek symbolizes “Trump always comes out.” This phrase aims to describe a pattern of shares that it overwhelms when the Trump administration announces new, severe definitions, then rises when Mr. Trump relieves days or weeks.
Since the Armstrong column, Mr. Trump has retracted import duties on other major partners in the United States. On May 12, A. 90 days of freezing On 145 % tariffs on Chinese goods, while on May 26 it is 50 % definitions are late On European goods until July. Either way, the markets jumped after Mr. Trump’s offer to reduce the definitions.
“[T]It has a rally recently a great relationship with the markets that realize that the American administration does not have a very large tolerance in the market and economic pressure, and it will be quickly to decline when the definitions cause pain. This is Taco’s theory: Trump is always going out. ”Armstrong wrote on May 2.
In the latter case, the market decreased On the sharpness of Friday After Mr. Trump said he intends to raise the definitions of European imports to 50 %. But on the day of the anniversary, Mr. Trump said he would reduce these plans until July to give the European Union and the United States more time to negotiate. On Tuesday, today the US markets were reopened after the holiday, S & P 500 2.1 % gathered.
When asked about the term White House correspondent on Wednesday, Mr. Trump answered that he was a “bad question”.
“He is called negotiation,” said Mr. Trump. “Today they will not be negotiated if I do not put a 50 % tariff” in Europe.
He added, “[T]He will say, oh, it was chicken. The chicken was. This is incredible. I usually have a opposite problem. They say, “You are very difficult, Mr. President.”
Whatever the strategy in the White House, investors have become more comfortable with the Trump administration style in putting high tariff rates at first, later reduced, Adam Krisiavoli pointed out.
“[T]It is increasingly listening as investors became more comfortable with the severity of the tariff threat (Taku “is adopted by more [earnings per share] Crisafulli wrote in a research note on May 28.
However, there may be a lot of self -consent in the market about the threat of Mr. Trump’s tariff, which was warned by major companies such as Wall Mart It will cause them to raise pricesCrisafulli added. Earlier this month, Moodyz It reduced the American credit ratingHighlighting the investor’s concerns about the growing government debts.
“However, the narrative of the customs tariff can remain in a state of benign optimism in the next few weeks (the big deadline is early/in mid -July, when the known tariff ends for 90 days/50 % of the identification tariff in the European Union) while the inflation driven by the customs tariff may not appear in the data until July (when the numbers of June are reported),” the analysis is not done. “
