Carlsquare/Vontobel weekly trading note: The Trump circus is just getting started
Prenumeration
We believe that the strong rally in the S&P500 since the middle of last week may have been overdone. A period of negotiation is now beginning between the US and other countries over the level of tariffs. However, despite some reduction following these negotiations, the US tariffs are still significantly higher than those in place on 20 January. The new US tariffs mean a large increase in corporate taxes, which could trigger a global recession.
The S&P500 has enjoyed some of its strongest rallies since 2008 over the past week. However, despite the Trump administration's willingness to negotiate tariffs with many countries, it has managed to raise the average US tariff level from 2% on 20 January this year to 24% now. While the recent rally reflects hopes of de-escalation, history, such as in 2001, has shown that sharp rebounds in volatile markets can be fleeting.
This week marks the start of the Q1 2025 reporting season, with some blue chip companies reporting. Thursday's ECB rate decision is a key one, with expectations for a cut from 2.50% to 2.25%.
Please find out more in our weekly letter on certificates Vontobel.com: Read the weekly newsletter here
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