GlobalData TS Lombard: Perkins Vs Beamish Markets Bounce but Damage is Done
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Apr 29, 2025 Dario Perkins and Freya Beamish, both economists at TS Lombard, dive into the turbulent waters of today's financial markets. They discuss the impact of recent political events, especially Trump's influence on trading sentiments. Could a sudden stop in Chinese imports trigger a recession in the U.S.? They also explore the surprising correlation between equities and bonds and the ongoing resilience of the U.S. dollar as the world's reserve currency amidst rising geopolitical tensions. A whirlwind of insights awaits!
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Market Response to Trump's Policies
- Markets showed some relief rally as Trump's initial market shocks began to peter out.
- However, damage remains from uncertainty and policy impacts are yet to fully hit economy and earnings.
Rare Bonds-Equities Correlation
- Positive correlations between bonds and equities signal rare financial stress and changing market dynamics.
- The usual safe dollar appreciation during crises is breaking down, indicating deeper investor concerns about the US dollar.
Impact of Sudden Chinese Import Stop
- Sharp drop in US imports from China is expected due to tariffs and order slashing, creating supply chain fragility.
- This will likely hit US corporate profits significantly, regardless of pricing power.