Editorial. There are debates that, in hindsight, should not have been held. And the one that pitted Biden against Trump last week on the other side of the Atlantic is one of them. The long-awaited event has, in fact, turned into a disaster for the Democratic candidate. A shipwreck that, once again, raises questions about the outgoing President’s ability to serve a second term. And, in the meantime, to grapple politically with his opponent over the rest of the campaign. Bluntly, some are now even inviting him to hand over without waiting for the November vote count. In short, this debate too many seems to have increased the chances of seeing Trump redecorate the Oval Office next January. The potential future tenant of the White House is of course not in his first lease and makes no great secret of his conduct of affairs. We already know the economic color. The opportunity to anticipate, a few months in advance, what the consequences could be for the markets.
Internationally, Trump II has already announced that he wants to continue the trade war he has started with the Middle Kingdom by raising customs duties to more than 60% on imports “made in China”. A prospect that could, if pushed too far, weigh on stocks as well as bond yields. Beyond that, the increase in tariffs on imported products could also impact sectors such as distribution, textiles and even furniture. In terms of the environment, he would once again throw the Paris Agreements in the trash – from where Biden had taken them in 2020. Trump II would also authorize the oil majors to resume their Swiss cheese-style drilling and would eliminate subsidies for wind turbines. A horizon – bleak for the climate – which would logically be favorable to the energy sector on the stock market and, on the contrarypenalizing the renewable sector – and, in addition, a sector like electric vehicles. Finally, he has every reason to believe that he would continue the relaxation of American financial regulations started under his first term, which will not fail to benefit the banking sector… Response to these hypotheses, on the evening of November 5.
Chart of the week:
US inflation slows
Source : Bloomberg, June 2022-June 2024 – US Core Personal Expenditures Price Index (month-over-month and %)
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