Latest analyzes by Goldman Sachs Highlighting a 5 % potential decrease in the US stock market in the coming months, a scenario attributed to the latest definitions imposed by the Trump administration.
The latter can negatively affect corporate profits. However, experts believe that the customs tariff for Canada and Mexico may be temporary.
The impact of the new definitions on the economy of the United States (USA), according to Goldman Sachs: What is Trump’s relationship with?
according to Goldman Sachs StrategiesThe latest tariff measures can put great pressure on corporate profits. The companies listed in the S&P 500 index can face a direct impact, with an estimated decrease of 5 % in the stock value.
This decrease reflects the increasing concerns of investors regarding the additional costs that companies will have to confront to import the goods subject to definitions.
Indeed, the customs tariffs are not only more than corporate costs, but can also reduce the competitiveness of American companies in international markets.
David CostinThe chief strategic expert in Goldman Sachs confirmed how these dynamics can lead to a declining review of profit expectations for many companies, which contributes to a more cautious feeling among investors.
The main component is represented in the current economic scenario through trade relations between the United States, Canada and Mexico.
Despite global trade tensions, Goldman Sachs believes that the definitions imposed on these two countries can be temporary by nature. This hypothesis is based on the possibility of negotiations that can reduce trade restrictions.
The relationship with Canada and Mexico is particularly relevant, given the importance USMCA (USA-Mexico-Canada), The Trade Agreement that replaced NAFTA.
Any major change in this agreement can have repercussions on the main sectors such as cars, agriculture and technology. However, optimism about a temporary solution can provide some stability for bull and bear markets.
Risk analysis for investors
For investors, the current context represents a complex challenge. On the one hand, definitions can reduce the company’s profit margins, which negatively affects stock prices. On the other hand, geopolitical uncertainty nourishes instability in the market.
Goldman Sachs asserts that the risk of a decrease in a decrease in the stock market is realEspecially if the customs tariff continues or condenses.
Investors may consider governor diversification strategies to alleviate the exposure of special sectors in particular, such as the manufacturing and energy industry.
The decisive aspect of Goldman Sachs analyzes related to the effect of customs tariffs on corporate profits expectations.
The estimates of profit growth can be reviewed for 2023Especially for companies that rely heavily on imports under definitions.
Companies working in sectors such as technology and consumer goods can be among the most affected companies, as they often depend on global supply chains.
Increased production costs may lead to high prices of consumers, with possible effects on demand.
