Uddrag fra Market Ear/ Goldman/ Datastream
Trump Trump Trump
“Trump trades” have of course been the key focus in the market over the recent past. Most of it on bonds & the dollar. Here are three “other” Trump-trade observations.
1 – M&A bankers love Trump
Expectations for a more business-friendly regulatory regime are the boon private markets have been waiting for. As a proxy for future M&A activity, shares of investment banks Evercore (+7.7%) and Lazard (+9.3%) have soared WTD.
Source: Yardeni
2 – Credit does not care
Trump’s odds in November have tracked quite well with an equity basket that is long/short Republican policy out/underperformers…
Source: Goldman
…showing much less correlation
Credit markets have shown a much less clear correlation with Trump’s election odds.
Source: Goldman
3 – Tariffs: A European hit
1. Goldman: “Proposed tariffs would likely lower GDP by 1% in the Euro Area”
2. Goldman: “We estimate that a 1pp change in sales-weighted GDP would shave off c.10% of earnings for European companies”
Source: Goldman
Trading Trump’s tariff threats
Companies affected by potential US tariffs underperform as the probability of Trump winning rises.
Source: Goldman
World trade exposure
Beta of equity returns to world trade growth across global markets.
