The “breadth and depth” of President Trump’s plans have caught companies by surprise, a leading asset manager has said.
“He had deeper plans than expected,” Fabiana Fedeli said when discussing the import tariffs which wiped $2.5trn (£1.8trn) off the value of US stocks when they were introduced by Donald Trump at the start of April.
M&G’s chief investment officer for equities, multi-asset and sustainability was speaking at a briefing which examined how markets are reacting to the first 100 days of the second Trump presidency.
Fedeli explained that the new administration has created uncertainty and that confidence is weakening “significantly”, hitting companies’ willingness to make long-term plans.
For her colleague, Andrew Chorlton, who is chief investment officer of fixed income, Trump’s second term appears to be different from his first.
“It feels like the guardrails around the powers of the president have been reduced,” he said.
Indeed, Trump has signed 138 executive orders within the past 100 days, compared to 24 at the same point in his first term.
“There is an air of instability,” Chorlton said. “People do not know what comes next.”
And this uncertainty is being priced into the bond markets, Chorlton said. “The markets are craving stability or a period of calm.
“Whatever the tariff, if you have stability, you can plan,” he added. “Investors want a safe environment to make decisions.”
Yet Chorlton remains optimistic. “There will be no shortage of opportunity with governments having lots of bonds to sell in the coming years.”
And Fedeli is already seeing clients who were overweight the US now allocating more to Europe.
And how should investors react to future tweets by President Trump? “It is an art not a science,” Fedeli replied.
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