“Do you use the duties? They will create problems for us, it is evident. If really, after the 90 -day postponement announced yesterday, they should be carried out how they were proposed by Trump, it is inevitable, but it is not the end of the world as it seems to appear by the violent reaction of the equity markets and the feeling of irremediable panic that has spread. For European and Italian companies, the only chance to continue to compete successfully in the world is always the same: rolling up the sleeves and finding solutions ». Giovanni Tamburi, number one of investment partners drums, has many reasons to intervene in the US-market duties debate since it is one of the main shareholders of many Italian companies that export abroad. “It is a major problem, but when we’ve got handed the tsunami of Covid, which was really an epochal occasion, we should essentially discover a means of coping with pragmatism additionally this section of the duties, nevertheless introduced” ‘, observes Tamburi, which invites to distinguish the effects for the real economy, which will be there and who will lead to a contraction of corporate profits, from those for the bags that ” Not very wise analysis, the results of the monetary drunkenness of the final two years, specifically of some securities within the USA and of European banks favored by the spreads on the charges and dangers transferred to governments “.
No fear for the sudden collapses of the equity markets?
I am not surprised, it has always been like this. Years ago it was used to say: the bags go up to the stairs and go down with the elevator. Now, however, we have algorithms, passive management, leverage derivatives and the artificial intelligence that operates on the indices, so everything multiplies and has become a true roller coaster, very steep. Very far from the real economy. Warren Buffett had long understood that the markets were going up too much and in fact it slowly reduced the exposure to the housing to increase liquidity. He was criticized for selling Apple actions. Now we are seeing that he was right and recent duties on imports from China will create further problems for the income statement of one of the most beautiful industrial groups in the world, but which depends a lot from Asia.
Staying in the USA, what repercussions do you see for the markets? Will the fears for the economy lead to a drastic cut of interest rates by the Fed?
First of all, the primary drawback that’s producing is reputational, as a result of what has been for many years The steering nation of the world is giving indicators of flaging. And if on the one hand the American shopper is confused and now not trusts himself as a couple of months in the past, on the opposite half world he sees the danger makes use of develop. The penalties are that the dangers of recession and inflation improve and that the need to signal Treasury decreases. In this context, the Fed is positioned in a pleasant dilemma, as a result of in reality it can not decrease the charges a lot, as the big public debt gathered Post Covid should be financed and, as has been seen in current months, the precise charges in the marketplace go in the other way to the official reductions. So if the Fed additionally lowered them of one thing, the market would wrestle to comply with it. So let’s not delude ourselves, the collapses of the charges that for a few years somebody foresees stay a pious phantasm. Then you may already glimpse the blackmail that Trump will quickly do: I take away the duties in the event you subscribe to me Treasury. And he’ll attempt to make us purchase titles with very lengthy deadlines, maybe even at 50, 100 years previous. A insanity. As Europeans we should not fall into the lure. Also as a result of it’s now clear {that a} weak greenback is comfy in Trump, so if we purchased titles with lengthy durations we’d have sturdy dangers on the gearbox. But it’s higher to return to observing the true financial system which, following the uncertainty that has been created in current weeks, not solely won’t get better as many preconated within the second half of the 12 months, however dangers slowing down much more. So I consider that choice between corporations that has not been seen for a while may happen. Market leaders, probably the most stable corporations, with good merchandise, applied sciences or manufacturers, however greater than anything the undesirable ones, will strengthen, will make investments and acquisitions, they’ll develop anyway, whereas those that should not have these traits will undergo lots. For a few years the dustment between the assessments of Wall Street and Main Street has been accentuated, that’s, these on the M&A market. Already the collapses of the previous few days are medicating the scenario, however the whole lot means that between 25 and 26 the parameters of each the markets will are inclined to method, as is logical that it’s.
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