the stock market It has been severely hit by President Donald Trump’s war so far, but a Wall Street research company says that there are potential incentives on the horizon that can help transfer the situation to investors.
BCA Research said they saw a handful of “upscale scenarios” that could restart the assembly. Although the scenarios may all be long, they are all reasonable-and may lead to the main indexes dating back to the highlands at all, said Peter Peresin, the company’s chief international strategy in the company.
“We are still maintaining a declining point of view on stocks on the basis that the United States will likely enter this year,” Peresin said. “Everything that has been said, although we are very willing to arrows, we are open to anything that can challenge our thesis.”
Below are five things that the company believes may cause a shift in the market.
Trump used the stock market to measure the success of his presidency during his first term, although he is less focused on the market now. However, the president can be disciplined by the markets Commercial policy As the stock decrease it becomes very sharp so that it cannot be ignored.
This dynamic has not yet played. Peresin referred to the cases in which the Trump team informed that the president was no longer used stock market As a measure of his success.
Last week, Trump also admitted that the economy was going through.Transition“After his last tour of the definitions, which suggested to the markets that the president is fine with some fluctuations at the present time. Treasury Secretary Scott Besent reiterated the administration’s view that he would tolerate market fluctuations with following the goals of politics.
“Our strong doubts are that tolerance between the Americans for economic pain is very low, especially in the case where the pain appears to be infected in particular. This indicates that Trump will decline,” said Peresin.
The markets were concerned that bond investors can organize a large sale in a revolution Against Trump’s plan to extend it 2017 tax cuts. It would send a yield heading towards a level that can harm stocks.
BCA research has said that there is no opportunity, which will be positive for stocks.
Return on American treasury bonds for 10 yearsIndicating the long-term interest rate expectations in the economy, increased to 4.8 % in early January-one of the signs that investors expect a lower demand for American debt, which may be due to concerns about the incomprehensible financial situation.
The return has been rejected since then, and it is a sign that these concerns have now abandoned it. The return was traded for 10 years about 4.3 % on Friday.
“Investors should monitor the terminology of the excellent treasury to measure whether the excellent risks of bonds are rising to dangerous levels. So far, it hasn’t happened,” said Perezin.
Financial stimulation and structural reforms in Europe can enhance growth abroad – which can be positive for American markets as well.
“There is a great room to achieve gains from discrimination of internal barriers against trade. This is true in the European Union. This is also true in countries like Canada,” Peresin said, noting that the removal of commercial barriers that affect Canada can increase the gross domestic product by up to 8 % in the country.
European stocks It has already succeeded well so far this year. the EURO Stoxx 50 Index It has increased by 9 % since the beginning of January, as it surpasses the S&P 500, which decreased by 5 % of the year.
Oil prices They already suffer from depression but can fall more as a result of Trump’s plan to enhance US energy production. Peresin said that when the prices rise as a result of the increase in the supply, it was traditionally a positive signal.
Things look really positive on the production side. OPEC+ said it would recover some of the production restrictions that begin in April this year, and Trump, who announced a National Energy Emergency On his first day in his post, he said he would pour more resources in the American energy infrastructure.
Oil prices have decreased since the beginning of the year. Brent crudeThe international standard was traded, about $ 70 a barrel on Friday, a decrease from $ 82 a barrel earlier in the year.
Artificial intelligence can end Increase productivity The company said that the method is more than expected, which will be a blessing for the US economy and markets.
BCA Research has estimated that growth could expand anywhere from 30 to 100 times as a result of Amnesty International. He pointed out that this is similar to what the American economy saw during the agricultural and industrial revolutions.
BCA research said that the growth caused by artificial intelligence can resemble the growth seen in the previous revolutions.BCA Research
However, the company noted that productivity gains may take some time to appear in the economy. While the United States is in the midst of Amnesty International’s investment boom, there are returns for a decrease in those investments, which may be a risk to investors.
