Treasury bonds are the prominent play with the high temperature of Trump’s trade war

(Bloomberg) – Intensive World Trade War increases the risk of slowing out of sharp growth in the United States and bypassing investor portfolios.

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Both stocks and bonds were on a wild journey in the first three months of the year as a reaction to President Donald Trump’s halls of definitions. But one thing has become clear in this background: bonds are a better bet of stocks even as the dollar is eliminated as a safe haven.

US Treasury bonds outperformed the shares in this quarter, heading to achieve more than 2 % gain, while the S&P 500 stock standards decreased by about 5 %. It represents the first time since the beginning of the epidemic in March 2020 that decreased the shares, and the bonds rose in a period of three months.

Strategists, Barclays, led by Ajay Rajadiaksha, transformed the point of view of allocating their assets last week in favor of bonds on global stocks for the first time in “several” quarters, saying that uncertainty in politics is risks “on the negative aspect” on economic growth.

More than 5 trillion dollars has evaporated from evaluating the stock market in the United States since late February, where Trump plans to impose mutual fees on commercial partners on April 2 as part of a comprehensive tariff boost. Its administration also targeted sectors such as cars and industrial minerals, which aim to enhance American manufacturing and employment.

“If the stock market is lower, it tightens the financial conditions,” said Jack McNantter, Director of the Governor in Brandiin International Investment Management. “This is a good thing for bonds. It is better to be buying weak.”

In addition to the definitions, investors will turn their attention to the job report on Friday to get the last reading in the labor market. Economists expect a slowdown in the growth of salary statements and fixed unemployment rate.

“We believe that the risks that suffer from its revenues tend to the negative side if the employment data is disappointed,” wrote Subdra Rajaba, head of the American interest rate strategy at Societe Genereale.

“A real return”

The initial return of the traditional relationship between stocks and bonds is a welcome comfort for investors. After each cornerstone in the 60/40 portfolio, the strategy that was largely out of 2022 was when the increase in inflation after birth declined at one time.

Since the bonds offer investors a “real return”, with higher returns from inflation, “it is ideal for increasing customization in a comprehensive portfolio.”