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It may not be his intention, but Donald Trump has again made the European market wonderful.
Since the election date of November, BenchMark US Stocks Index and S & P 500 have shattered 6 % for the first time for the first time. U.S. companies and global investors have revealed that the president’s agenda element, especially the impulse to cut the deficit (let’s see the fear later) and taxes. So far, many American exceptionalism.
But European market performance was not too poor. The Pan-Continental Euro Stoxx 600 indexes consistent with the US counter part and 6.2 % of the profit over the same period. In the assumed economic rough areas in Germany, stocks increased by nearly 14 %, reaching record highs after record high prices. Even European bank stocks have increased by more than 11 % this year.
In the UK, the index of the domestic FTSE 250 mid -cap stock remains a place where the fun is died, but the FTSE 100 has also been broken and gained almost the same as the United States.
Can the US President really take responsibility for all of them? In his own way, partially.
In one, Trump has at least not struggling with trade duties in Europe. Of course, he still has time, but in his first two weeks in his first two weeks to change his place in the White House, he is Mexico, Canada, Colombia (easily). , (Easily) focusing on tariff efforts, with a surprisingly low degree, China. Trump has not hit the European drums intensely, except that the flaging of the designs expanding in Greenland’s autonomy territory to make Denmark anxious.
In the latest investor survey, Bank of America means “catch up” high -risk assets, combined with the reasonable level stability in the bond market, in combination with the stance of risk seeking risks. Is possible. ” The bank stated that switching from US stocks to the January survey and switching to the EU was at least 25 years.
“It was probably useful not to have US tariffs in Europe,” said RBC analysts. “This is not to say that this may not come in the future, but the most imminent concern.”
Another factor is the value of other European currency related to the euro, sterling, and dollars. The dollar is not ripping quickly or smoothly as Trump’s trader wants. It is a black eyes for very popular bets, especially among hedge funds. However, the value of the dollar is clearly a classic case that clearly rises strongly, prior to Trump’s victory and inauguration, and then “buy rumors and sell facts.”
Thus, for example, the euro has been featured since mid -January, but is about 7 % less than 7 % in late September. It is useful for exports in Europe.
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On the other hand, as I saw this week, the European Central Bank will maintain a straight reduction mode and slice a quarter of a fourth from the benchmark rate on Thursday. In contrast, the Fed is stuck, and the market has contracted a small number of pencils, even if it has been reduced any more during this calendar. Again, this is a recipe for maintaining at least the euro, at least, is relatively weak, even if Trump’s trade supporters do not collapse in the way that Trump’s trade supporters expected.
Furthermore, although the lack of famous glossy high -tonic, European, has long been regarded as a weak point, it has been more advantageous since the emergence of inexpensive and high -quality artificial intelligence tools has shocked the market this week. It looks like. From China.
This is useful for Europe in several ways. First, if China can do it, Europe can strengthen AI games, as French mistakes and others have already tried. The other emphasizes that US tariffs are potential goals that can end as the benefits of other major economies.
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In this week’s event, INVESCO’s Paul Jackson sketched how US import restrictions were long -term. “Because US companies are less competitive, they will be higher for the same amount of products,” he said.
Angela Chan, the author of high wire: China regulates big technology and dominates the economy is the same point on the financial Times page in the previous week before the unstable global market in China. He points out that trade restrictions have forced China to work harder and wise to catch up with the United States. The wider lessons here are that it is too early to declare that the United States is a high -tech race winner. Europe and Asia can catch up.
This is a cloudy vision of the American exceptional theme, which has dominated this year’s outlook from both banks and investors. It may be a good idea to knock up some blue and gold mega hats (of course in China).
katie.martin@ft.com
