Bloomberg Surveillance How Equities are Pricing in Trump Policies
Feb 6, 2025
In this discussion, Amy Wu Silverman, Head of Derivatives Strategy at RBC Capital Markets, shares insights on navigating market volatility amidst political shifts. David Rosenberg, Founder of Rosenberg Research, elucidates the bullish sentiment in equities while wondering about inflation risks and the Federal Reserve's ability to steer a soft landing. Wendy Schiller, a Brown University professor, analyzes the legal fallout of President Trump's actions and the impact of judicial challenges on market dynamics.
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Active Management in High-Dispersion Markets
- Focus on stock picking in high-dispersion markets.
- Sector and individual stock choices matter more than overall market trends.
Hedging Against Headline Risks
- Headline risks, like those from Trump's policies, create market potholes.
- Hedging is advisable due to increased long positioning after two strong S&P years.
Client Perception of Trump's Market Influence
- Clients believe Trump will manage the stock market, viewing tariffs as negotiation tactics.
- This explains why volatility isn't fully priced in despite headlines.