Latest news with #Carmignac
Yahoo
02-07-2025
- Business
- Yahoo
Wall Street has faith in Trump. It could all end in tears
All is forgiven. Wall Street has soared to record highs just months after Donald Trump unleashed tariff chaos on the world. The S&P 500 stock index has surged nearly 25pc from the nadir it reached in the days after the US president announced his 'liberation day' tariffs on April 2. The benchmark completed its best quarter since December 2023 on Monday as it reached a new high, even as Trump threatens to impose fresh tariffs within weeks. This will please a president who has long viewed the stock market as an unofficial straw poll on his performance. But is such a full-throated endorsement of Trump's economic plans justified? Not everyone is convinced. '[Stocks] are at an all time high and the risks are still there,' points out Luca Paolini, the chief strategist at Pictet Asset Management. 'It is not as bad as it was but it is not as good as it was a year ago. 'Our view is that it's going to get weaker and that's why we don't buy into the strength of the market.' Stocks have surged even as official data, published last week, confirmed that the US economy shrank by half a percentage point at the start of the year. 'The US economy is somewhat slowing and when you have those types of stock valuations, there's not much room for deception,' says Kevin Thozet, a member of the investment committee at European asset manager Carmignac. Stock prices on the S&P 500 are trading at about 22 times earnings, which assumes that companies will experience astonishing growth in profits in coming years. 'This recovery is driven entirely by soaring valuations rather than earnings upgrades, signalling underlying fragility,' Susana Cruz and Joachim Klement, analysts at stockbroker Panmure Liberum, have warned. The current stock market rally is 'built on shaky ground, given the deep economic uncertainty'. There are some good reasons for stocks to have roared back since Trump announced his 'liberation day' tariffs. 'Markets are always navigating a very uncertain environment. The question is, 'Is it worse or better than a few months ago?' And I think the market, correctly so, came to the conclusion that it's probably better,' says Paolini. 'The trade war that was supposed to be terrible for the global economy. It doesn't look like it is going to be that bad because there are going to be deals between the US-UK, US-India, Vietnam, probably Europe and Japan. 'So yes, there will be higher tariffs, but we are probably going to avoid a devastating trade war of everyone against everyone else.' Rory McPherson, the chief investment officer at Wren Sterling, says: 'Corporate earnings have been really strong. The earnings for the rest of the year have not been downgraded by anything like what they were downgraded in previous crises. 'Yes, they have been downgraded and the downgrade for the year is almost 4pc but that's not too far out of whack.' However, Paolini warns that the surge in stocks means there is 'very limited upside from here because equities are very, very expensive'. The big question hanging over the stock market is the future of so-called US exceptionalism – the previously self-reinforcing theory that America is unique and distinct from other nations. This belief has long helped to prop up stock markets, with investors betting that American businesses will pull through even the most difficult patches. But there are signs that this faith is being shaken. The dollar has suffered its worst first half of the year since 1973 and concerns about Trump's plans to borrow hundreds of billions have seen borrowing costs jump, prompting jokes that the president could become 'Donald Truss'. 'If I'm looking further out I think Trump's policies would lead to a lower US dollar and higher interest rates,' says Thozet of Carmignac. 'The Trump administration wants to have more manufacturing, more stuff made in the US and this comes with a lower dollar policy. And there's a risk that these higher interest rates deflates the elevated prices on US equities.' The man who could make or break the Wall Street rally is Jerome Powell, the chairman of the Federal Reserve. Lower interest rates would spur economic activity and help boost corporate profits. Traders are currently pricing in two cuts before the end of 2025 and a 53pc chance of a third, anticipating that policymakers will react to a slowdown in the American jobs market, which added 139,000 jobs in May, down from 147,000 in April. However, Powell warned on Tuesday at the ECB Forum in Sintra that policymakers had kept rates 'on hold when we saw the size of the tariffs'. He also warned that the 'US federal fiscal path is not a sustainable one' as the Senate edged closer to approving Mr Trump's 'One Big Beautiful Bill', which would cut taxes and add an estimated $3.3 trillion (£2.4 trillion) to the American government deficit over the next 10 years. Those comments will infuriate Mr Trump, who has repeatedly pressured 'Too Late' Powell to cut rates. As the melodrama plays out, Wall Street waits. 'It is not blind hope,' insists McPherson. 'The US has a lot more upside from here.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
02-07-2025
- Business
- Telegraph
Wall Street has faith in Trump. It could all end in tears
All is forgiven. Wall Street has soared to record highs just months after Donald Trump unleashed tariff chaos on the world. The S&P 500 stock index has surged nearly 25pc from the nadir it reached in the days after the US president announced his ' liberation day ' tariffs on April 2. The benchmark completed its best quarter since December 2023 on Monday as it reached a new high, even as Trump threatens to impose fresh tariffs within weeks. This will please a president who has long viewed the stock market as an unofficial straw poll on his performance. But is such a full-throated endorsement of Trump's economic plans justified? Not everyone is convinced. '[Stocks] are at an all time high and the risks are still there,' points out Luca Paolini, the chief strategist at Pictet Asset Management. 'It is not as bad as it was but it is not as good as it was a year ago. 'Our view is that it's going to get weaker and that's why we don't buy into the strength of the market.' Stocks have surged even as official data, published last week, confirmed that the US economy shrank by half a percentage point at the start of the year. 'The US economy is somewhat slowing and when you have those types of stock valuations, there's not much room for deception,' says Kevin Thozet, a member of the investment committee at European asset manager Carmignac. Stock prices on the S&P 500 are trading at about 22 times earnings, which assumes that companies will experience astonishing growth in profits in coming years. 'This recovery is driven entirely by soaring valuations rather than earnings upgrades, signalling underlying fragility,' Susana Cruz and Joachim Klement, analysts at stockbroker Panmure Liberum, have warned. The current stock market rally is 'built on shaky ground, given the deep economic uncertainty'. There are some good reasons for stocks to have roared back since Trump announced his 'liberation day' tariffs. 'Markets are always navigating a very uncertain environment. The question is, 'Is it worse or better than a few months ago?' And I think the market, correctly so, came to the conclusion that it's probably better,' says Paolini. 'The trade war that was supposed to be terrible for the global economy. It doesn't look like it is going to be that bad because there are going to be deals between the US-UK, US-India, Vietnam, probably Europe and Japan. 'So yes, there will be higher tariffs, but we are probably going to avoid a devastating trade war of everyone against everyone else.' Rory McPherson, the chief investment officer at Wren Sterling, says: 'Corporate earnings have been really strong. The earnings for the rest of the year have not been downgraded by anything like what they were downgraded in previous crises. 'Yes, they have been downgraded and the downgrade for the year is almost 4pc but that's not too far out of whack.' However, Paolini warns that the surge in stocks means there is 'very limited upside from here because equities are very, very expensive'. The big question hanging over the stock market is the future of so-called US exceptionalism – the previously self-reinforcing theory that America is unique and distinct from other nations. This belief has long helped to prop up stock markets, with investors betting that American businesses will pull through even the most difficult patches. But there are signs that this faith is being shaken. The dollar has suffered its worst first half of the year since 1973 and concerns about Trump's plans to borrow hundreds of billions have seen borrowing costs jump, prompting jokes that the president could become 'Donald Truss'. 'If I'm looking further out I think Trump's policies would lead to a lower US dollar and higher interest rates,' says Thozet of Carmignac. 'The Trump administration wants to have more manufacturing, more stuff made in the US and this comes with a lower dollar policy. And there's a risk that these higher interest rates deflates the elevated prices on US equities.' The man who could make or break the Wall Street rally is Jerome Powell, the chairman of the Federal Reserve. Lower interest rates would spur economic activity and help boost corporate profits. Traders are currently pricing in two cuts before the end of 2025 and a 53pc chance of a third, anticipating that policymakers will react to a slowdown in the American jobs market, which added 139,000 jobs in May, down from 147,000 in April. However, Powell warned on Tuesday at the ECB Forum in Sintra that policymakers had kept rates 'on hold when we saw the size of the tariffs'. He also warned that the 'US federal fiscal path is not a sustainable one' as the Senate edged closer to approving Mr Trump's ' One Big Beautiful Bill ', which would cut taxes and add an estimated $3.3 trillion (£2.4 trillion) to the American government deficit over the next 10 years. Those comments will infuriate Mr Trump, who has repeatedly pressured 'Too Late' Powell to cut rates. As the melodrama plays out, Wall Street waits. 'It is not blind hope,' insists McPherson. 'The US has a lot more upside from here.'
Time of India
19-06-2025
- Business
- Time of India
Trumponomics: How US president Donald Trump has triggered a financial roller coaster; shaken global markets in 5 months
Ever since US President Donald Trump took office, five months ago, his economic policies have unleashed widespread volatility across global financial markets, triggering investor pullback, a weakening dollar, and a sharp divergence in global stock performance. Here is a look at the financial roller-coaster rise: Wall street After years of dominating global markets, US stocks are now lagging behind — with Europe reaping the gains. Since the start of the year, Wall Street's S&P 500 index has risen just two percent, while Frankfurt's main index has surged 16 percent. London and Paris have also outperformed, recording gains of eight and three percent respectively. Kevin Thozet of investment firm Carmignac attributed the underperformance to President Trump's inconsistent stance on tariffs. Thozet told AFP that the president's shifting stance on tariffs had fuelled significant uncertainty around how they might affect economic growth. Dollar The US dollar has shed 10 percent of its value against the euro over the past six months, its steepest decline in three decades, according to Robert Farago, analyst at British investment firm Hargreaves Lansdown. While President Trump's tariff policies are seen as the primary driver, mounting concerns over the ballooning US debt, amplified by a costly presidential budget proposal, have further weighed on the currency. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Thị trường có dấu hiệu suy thoái không? IC Markets Đăng ký Undo Though some have floated the idea of the Chinese yuan as a possible alternative to the dollar, ECB President Christine Lagarde recently highlighted the euro's potential for a stronger international role. Still, significant hurdles remain for any currency seeking to challenge the dollar's dominance. Debt American debt has long been seen as a bedrock of the global financial system, with investors worldwide turning to US Treasury bonds as a safe haven. But that confidence is starting to crack. JPMorgan Chase chief Jamie Dimon recently warned that the ballooning US debt is a "real problem" and that bond markets are entering a "tough time." At the end of May, yields on 30-year US Treasury bonds crossed the key five percent threshold—an indication of waning faith in America's ability to manage its debt. "I've always told clients they need US debt if they want an asset that remains intact even in a disaster, but I think that's no longer the case," said Alexandre Hezez, strategist at Banque Richelieu. Adding to the concern, Steve Sosnick of Interactive Brokers noted that the dollar is weakening even as interest rates rise, "a sign that money is leaving the US." Oil Donald Trump made lowering oil prices a key priority in his efforts to curb US inflation. In April, crude prices dipped below $60 a barrel, their lowest level since 2021. However, this drop was driven less by policy success and more by market fears. Investors, rattled by Trump's tariff moves, anticipated a global economic slowdown that would weaken demand. More recently, rising tensions in the Middle East have pushed prices back up. The military escalation between Israel and Iran has driven oil back to around $75 a barrel. Gold and crypto winning the game Gold has traditionally been seen as the ultimate safe haven during times of uncertainty and 2025 has been no different. Soaring demand has pushed its value up by nearly 30 percent since the start of the year. Much of this rally has been fuelled by major central banks, which are increasingly turning to gold over the US dollar to shore up their reserves. At the same time, Donald Trump has thrown his weight behind cryptocurrencies. Alongside his personal investments, his administration has introduced measures to integrate digital assets more firmly into the financial system. Bitcoin surged past the $100,000 mark for the first time shortly after the US election, capping off a nearly 60 percent gain over the past year. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
France 24
19-06-2025
- Business
- France 24
How Trumponomics has shaken global markets
Many investors are pulling money out of the United States, the mighty dollar has lost its lustre and Wall Street is being outpaced by European stock markets. Here is a look at the financial roller-coaster ride. US stocks under pressure After years of global dominance, US stocks are feeling the heat -- and Europe is the main beneficiary. Wall Street's S&P 500 index has gained just two percent since the start of the year, compared with 16 percent for Frankfurt's main index. Growth at the exchanges in London (eight percent) and Paris (three percent) is also outstripping Wall Street. Kevin Thozet from the investment firm Carmignac pinned the blame firmly on Trump. The president's flip-flopping on tariffs had created a "high level of uncertainty" about their potential impact on growth, Thozet told AFP. Dollar slides The dollar has lost 10 percent of its value against the euro in the past six months, "its worst performance in 30 years", according to Robert Farago, an analyst at the British investment firm Hargreaves Lansdown. Trump's tariffs are the main culprit but the global reserve currency is also suffering from concerns about the size of the US debt -- exacerbated by a budget proposal from the president that many analysts say will be hugely expensive. While some have suggested the Chinese yuan could become a dollar alternative, ECB chief Christine Lagarde has touted the euro, discussing in May its potentially greater "international role". But any currency attempting to topple the dollar faces plenty of challenges. "The yuan is not convertible, and the euro is too fragmented," said Jean Lemierre, chairman of the board of directors of BNP Paribas. Debt worries American debt is a cornerstone of the financial system, as the rest of the world lends to the United States in search of a safe investment. But Jamie Dimon, head of JPMorgan Chase, said in early June that the level of US debt was a "real problem" and that bond markets were facing a "tough time". In a sign of the loss of confidence, interest rates on 30-year US Treasury bonds surpassed the symbolic five percent mark at the end of May. "I've always told clients they need US debt if they want an asset that remains intact even in a disaster, but I think that's no longer the case," said Alexandre Hezez, a strategist at Banque Richelieu. Steve Sosnick, chief strategist at US-based Interactive Brokers, told AFP the fact the dollar was falling while rates were rising was "a sign there's money moving out of the US". Winners: gold, crypto Investors have long regarded gold as the ultimate safe harbour in a crisis, and the clamour for the metal has seen its value jump by almost 30 percent since the start of the year. Major central banks have also had a hand in pushing up the price, as they look to gold as a more sure bet than dollars to hold in their reserves. Meanwhile, Trump has leant heavily into cryptocurrencies with investments of his own and official measures to bring the assets into the mainstream. Bitcoin passed $100,000 for the first time just after the US election, increasing almost 60 percent in a year. Oil uncertainties Trump made it a priority to bring down oil prices so that US inflation would come down. Crude oil fell below $60 per barrel in April, its lowest price since 2021. But that was because investors spooked by Trump's tariffs were anticipating weaker demand worldwide if economies slowed. The military escalation between Israel and Iran has seen prices climb again to around $75 a barrel.
Int'l Business Times
19-06-2025
- Business
- Int'l Business Times
How Trumponomics Has Shaken Global Markets
US President Donald Trump has taken just a few months since his election to upend global financial markets with his economic policies. Many investors are pulling money out of the United States, the mighty dollar has lost its lustre and Wall Street is being outpaced by European stock markets. Here is a look at the financial roller-coaster ride. After years of global dominance, US stocks are feeling the heat -- and Europe is the main beneficiary. Wall Street's S&P 500 index has gained just two percent since the start of the year, compared with 16 percent for Frankfurt's main index. Growth at the exchanges in London (eight percent) and Paris (three percent) is also outstripping Wall Street. Kevin Thozet from the investment firm Carmignac pinned the blame firmly on Trump. The president's flip-flopping on tariffs had created a "high level of uncertainty" about their potential impact on growth, Thozet told AFP. The dollar has lost 10 percent of its value against the euro in the past six months, "its worst performance in 30 years", according to Robert Farago, an analyst at the British investment firm Hargreaves Lansdown. Trump's tariffs are the main culprit but the global reserve currency is also suffering from concerns about the size of the US debt -- exacerbated by a budget proposal from the president that many analysts say will be hugely expensive. While some have suggested the Chinese yuan could become a dollar alternative, ECB chief Christine Lagarde has touted the euro, discussing in May its potentially greater "international role". But any currency attempting to topple the dollar faces plenty of challenges. "The yuan is not convertible, and the euro is too fragmented," said Jean Lemierre, chairman of the board of directors of BNP Paribas. American debt is a cornerstone of the financial system, as the rest of the world lends to the United States in search of a safe investment. But Jamie Dimon, head of JPMorgan Chase, said in early June that the level of US debt was a "real problem" and that bond markets were facing a "tough time". In a sign of the loss of confidence, interest rates on 30-year US Treasury bonds surpassed the symbolic five percent mark at the end of May. "I've always told clients they need US debt if they want an asset that remains intact even in a disaster, but I think that's no longer the case," said Alexandre Hezez, a strategist at Banque Richelieu. Steve Sosnick, chief strategist at US-based Interactive Brokers, told AFP the fact the dollar was falling while rates were rising was "a sign there's money moving out of the US". Investors have long regarded gold as the ultimate safe harbour in a crisis, and the clamour for the metal has seen its value jump by almost 30 percent since the start of the year. Major central banks have also had a hand in pushing up the price, as they look to gold as a more sure bet than dollars to hold in their reserves. Meanwhile, Trump has leant heavily into cryptocurrencies with investments of his own and official measures to bring the assets into the mainstream. Bitcoin passed $100,000 for the first time just after the US election, increasing almost 60 percent in a year. Trump made it a priority to bring down oil prices so that US inflation would come down. Crude oil fell below $60 per barrel in April, its lowest price since 2021. But that was because investors spooked by Trump's tariffs were anticipating weaker demand worldwide if economies slowed. The military escalation between Israel and Iran has seen prices climb again to around $75 a barrel.
