The Republican premiered his first mandate with an explosion of the business “animal spirits” that no one foresight so vigorous. Trump 2.0 begins with a sudden implosion of trust that was not in the papers either.
“America will take off as a rocket,” President Trump tells a group of governors. “The best investors, the most successful on Earth, are running to invest in the US,” he says in another speech. It’s true. In their meetings with the prime ministers of Japan and India the promises of both were public and very generous. But it is not the best thermometer. Who in his healthy judgment would miss the occasion of close contact to get ready, except Ukrainian President Zelenski, for understandable reasons, and only after being rebuked for having initiated the war with Russia (sic).
Trump is a volcano of sharp initiatives, not exempt from dangers or contradictions, very debatable. But discussed at the polls, voters resolved in their favor. It is an agenda that pushes with vertigo. You need to impose it quickly by taking advantage of the confusion. Who opposes? Long rates, from the campaign. But Trump, and his Treasury Secretary, Scott Besentthey have already established a truce. And the bonds, and the dollar, satisfied, canceled their complaint. Wall Street ONE THAT THE AGENDA – as it is announced – is a Bluff. And so he lives in peace.
Companies and consumers, overwhelmed by concerns
Not everyone shares the idea of lowering the official discourse with a ton of salt. And it is perceived in the hard data, which in its first figures after the transfer of command, is really very hard. The PMI report, which is published by S&P global, is lapidary. The US would have stopped dry. “The visible optimistic mood among entrepreneurs at the beginning of the year evaporated, and is replaced by a picture of increased uncertainty, stagnation of business activity, and rising prices.” Trump did (Biden was not able). In record time. He assumed on January 20, and the part collects information taken between February 10 and 20. Optimism, Rayano to the maximum of the last three years, turned good to first in the “more bleak” feeling from the pandemic.
Trump should take note. Companies are overwhelmed by concerns. What will be the impact of the policies it drives? Expenditure cuts, tariff rise, geopolitical changes. All sum. Sales have already begun to fall for uncertainty. And prices scale as suppliers preventively adjust their numbers covering the future tariffs. Did everything spoil? No, the manufacturing industry rebounded. But the expansion is mounted on the brios of the services, which were first contracted since 2022. If at the end of 2024, S&P global detected solid growth, well above 2%, the February figures point to a hesitant rhythm of 0.6% annualized. Trump premiered his first mandate with an explosion of the business “animal spirits” that no one foresaw so vigorous. Trump 2.0 begins with a sudden implosion of trust that was not in the papers either.
Will the report be fine? The evidence accumulates in that sense. The basket of leading indicators fell with heaviness in January, reversing the progress of November and December. Retail sales recuired 0.9% in nominal terms last month. House sales, 4.6% year -on -year. Already in February, the confidence of the builders slipped to the floor of the last five months. A raw winter, and the fires in Los Angeles are non -negligible adversities. But Trump’s uncertainty is the crucial burden. Consumer confidence rushed almost 10% in February, according to the University of Michigan. The conditions to buy durable goods fell 19%, to a large extent because “imminent price increases” are afraid of tariffs. And as the PMI report suggests, inflation expectations, after two important monthly increments, were unbalanced in February. One year old, the expected inflation jumped from 3.3% to 4.3%. And five years, from 3.2% to 3.5% (The largest increase since May 2021). It was already said here last week: the consumer knows what Trump ignores. He is who must pay the tariff circus. Not foreigners.
MARKETS: A CALL OF ATTENTION
The bag anticipates. But he did not foresee the corrosion of uncertainty about companies and consumers. On Wednesday, the S&P500 established a brand new record. On Thursday, Walmart warned that its results will not be “immune” to the application of tariffs proposed to imports from Mexico and Canada. And on Friday, the PMI report and the consumer distrust pushed the index below the average of 50 wheels.
This is a call for attention. On time. Not yet firefighters. It forces yes to recalculate the plans. It is urgent to lower the discourse voltage. It is not enough to calm the bonds, you have to do it with the population. Trump 2.0 is not an extreme case of chaos theory, the one that says that a butterfly flutter can produce a cataclysm in antipodes. The president is an elephant that gestures in a bazaar. You must find out that what crumbles are the shelves of your own business, and not abroad. What will happen when tariffs really upload? It is not necessary to simulate it. The effects are already visible to the league. It will be appropriate to change the subject. And it would be much better, for its impact on expectations, definitely file it. But a module rise of tariffs will have to be done to save the face. Gesting a fast commercial pact with a relevant country could be an elegant way to overcome the trance. An agreement with China, perhaps? It is possible, Trump said, passing, this week. It was a patch solution (the phase one agreement) in 2020. It is clearly much more necessary today.
Source: Ambito
