💼📈 Trumponomics and the rallying cry to “Make America Great Again”, so far, does not appear to be working too well for the US.
🌍 But will Europe or China stand to benefit from this underperformance?
📽️ Watch our latest episode of The Debrief, with Jean-François ROBIN, who explores these evolving economic narratives ⬇️
Everything is not according to the plan. It's not that good for the US and maybe it's not that bad for Europe. Are we coming from make America great again to make Europe great again, Make China great again? Maybe not that much. But still, obviously things are not as expected. It's not that good for the US. What we look at is a lot of indicators are showing that the Trumponomics so far not so good. You see consumption is down, inflation expectation out at the highest since 32 years in the US. So while confidence is is falling, unemployment goes up. And more than anything else, what was the thermometer of the needle in the compass, The stock market is clearly. Underperforming, imagine that. That's not something we have seen in the last 40 years, such underperformance of the SNP compared to the euro stocks. This is very rare event we are looking at, which is that the euro is not crossing parity. It's up by 5% since the low we have seen after Trump election. So everything is not according to the plan. It's not that good for the US and maybe it's not that bad for Europe because tariffs are going to impact Europe big time and the bulk of it is. Forming the second of April so it's going to impact Europe but on the other around Europe is reacting with much more public spending on defense 800 billion and more than anything else Germany is having a big revolution with this new setup for its public finances with potentially 1.5 trillion of additional spending. It means that Germany the sick man of Europe is going to be the engine of growth in Europe. So Germany can be up by 2% meaning that. It's going to be very positive for its main trading partner, which is France, which is going to be very positive for the main trading partner of France, which are Italy and Spain, blah, blah, blah. It's going to have spillover effects, very positive. And so goes for China. We see that China stocks are performing because China at the end of the day is less dependent on the US and there again, not that bad. So once again, we have to be a little bit more balanced in our expectation. Not that good for the US, but no. Decision not that bad for Europe, still remains to be seen how much positive is going to be and China probably is not going to be as much as impacted as before.
