Latest fraudulent alert - last updated on Apr 2023. To find out more information and how to protect yourself, please click here.

Investment Institute
Macroeconomics

Remember “Trumpnomics”?

KEY POINTS
Consumer confidence is surprisingly low in the US. This does not bode well for Biden’s re-election bid. We look into what could be the trade policy of another Trump presidency.
Christine Lagarde was quite straightforward about anchoring June as the likeliest start for the rate cuts.

Donald Trump’s victorious Super Tuesday, combined with so far favourable decisions by the Supreme Court, make it now highly likely that the November duel will be a re-run of 2020 at a time when, in the general polls, Joe Biden is slightly trailing his Republican opponent. The current President used his State of the Union speech to highlight the country’s strong economic performance. What is however striking is that consumer confidence is now significantly lower than what a so far successful model combining the unemployment rate, inflation and equity prices suggests. It seems the US extreme political polarization is colouring citizens’ assessment of the state of the economy, but Biden cannot count of Democrats’ enthusiasm about their economic conditions. Indeed, even they assess them as slightly below their long-term average. Looking back at all incumbent’s re-election bids since 1972, the level of consumer confidence at this stage of the campaign is lower than those seen in successful bids. Now, elections are not necessarily won on the economy. Donald Trump’s lost his own re-election bid in 2020 despite a high level of consumer confidence. We think it is however time to start looking hard at what a possible second Trump mandate could mean. We focus on a recent contribution of Peter Navarro, Donald Trump’s former international trade envoy. He unveiled in detail his plan for the US to threaten – and potentially ultimately enforce – additional custom levies to systematically bring the US tariffs on par with the tariffs imposed by the US clients. Some of these elements have already found their way into Donald Trump’s campaign. This would hurt geopolitical allies of the US such as the EU, as well as an emerging power such as India, on top of China, the explicit key target there. Separately, we think Christine Lagarde hinted quite clearly as June as the likeliest moment for the first rate cut. The ECB still needs more clarity on wage growth in particular, but the more dovish than expected new batch of forecasts signals a clear readiness not to waste too much time before starting to remove some of the current policy restriction.
Download the full article
Download report (458.59 KB)

Related Articles

Macroeconomics

Electrify Europe

Macroeconomics

October Op-ed - Meeting in the middle

Macroeconomics

October Monthly Investment Strategy - A far-reaching US election

    Disclaimer

    This website is published by AXA Investment Managers Asia Limited (“AXA IM HK”), an entity licensed by the Securities and Futures Commission of Hong Kong (“SFC”), for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy, sell or enter into any transactions in respect of any investments, products or services, and should not be considered as solicitation or investment, legal, tax or any other advice, a recommendation for an investment strategy or a personalised recommendation to buy or sell securities under any applicable law or regulation. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation, investment knowledge or particular needs of any particular person and may be subject to change at any time without notice. Offering may be made only on the basis of the information disclosed in the relevant offering documents. Please consult independent financial or other professional advisers if you are unsure about any information contained herein.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee such opinions, estimates and forecasts made will come to pass. Actual results of operations and achievements may differ materially. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Information herein may be obtained from sources believed to be reliable. AXA IM HK has reasonable belief that such information is accurate, complete and up-to-date. To the maximum extent permitted by law, AXA IM HK, its affiliates, directors, officers or employees take no responsibility for the data provided by third party, including the accuracy of such data. This material does not contain sufficient information to support an investment decision. References to companies (if any) are for illustrative purposes only and should not be viewed as investment recommendations or solicitations.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and that past performance is no guarantee of future returns, investors may not get back the amount originally invested. Investors should not make any investment decision based on this material alone. 

    Some of the services listed on this Website may not be available for offer to retail investors.

    This Website has not been reviewed by the SFC. © 2024 AXA Investment Managers. All rights reserved.