The severe definitions recently returned by President Trump pushed its highest -level tax tax.
Trump launched the Bls Statistics Commissioner after hinting at the latest non -agricultural salary numbers.
A mixture of severe definitions and questions about the integration of economic data and the already high assessments may lead to another collapse in the stock market.
The US Securities Market took investors to ride a rough ride this year. Standard S & P 500(Snpindex: ^Gspc) He decreased by up to 19 % of his high record when President Donald Trump announced the definitions of “Liberation Day” on April 2, however The index recovered quickly When you stop duties for 90 days.
However, Trump only gave investors to worry about another collapse in the market: he recently returned the modified versions of the severe definitions announced earlier this year, and shot the work statistics commissioner in an office threatening the independent agency responsible for collecting economic data.
Here is what investors should know.
Source: The official White House image Andrea Hanks.
Trump recently restored Mutual definitions It was first announced on April 2. After a period for months, during which the United States is awarding commercial deals with a few countries, new duties entered on August 7. Listed below are customs tariff rates on the United States trade partners.
European Union: 15 %
Mexico: 25 %
China: 30 %
Canada: 35 %
Japan: 15 %
More importantly, Canadian and Mexican imports are not subject to the free trade agreement of the above definitions. Also, 30 % tariffs are excluded on Chinese imports in advance, and the rate is subject to change depending on the results of the ongoing commercial conversations, which must be concluded in the coming days.
The Yale Terifs budget laboratory has increased the average US import tariffs to 18.6 %, which is the highest level since 1933. Economists in Goldman Sachs and Jpmorgan Chase Put the number closer to 17 %, but the large image is the same: the United States government imposes taxes on imports at an unprecedented rate in almost a century.
It is difficult to predict the results due to the lack of historical data, but economists generally expect to increase once in inflation and constant withdrawal on GDP (GDP). For example, the YALE Budget Laboratory will be estimated at 0.5 percentage points in the next two years, and the tax institution estimates on GDP are estimated at 0.8 % over the next decade.
This may be drowned in the stock market because economic turmoil will lead to the weakest company profits. Consequently, the Wall Street analysts reduced their profit estimates for the S&P 500. The January consensus called for a growth of 14 % in 2025, but the current consensus calls for 9.6 % growth. This number may be reviewed even after the unwanted salary statements report earlier this month.
Modern data from the Bls Statistics Office (BLS) indicates that the customs tariff began to hurt the labor market. Non -agricultural salaries, which measure the number of employees throughout the American economy with the exception of farms workers, increased 73,000 in July. That was a huge Miss for the estimation of the consensus that called for 110,000.
The most anxious was the reviews of non -agricultural salary statements from the previous months, as shown below:
It was reported that non -agricultural salary statements increased 144,000 in May, but this number was revised to 19,000.
It was reported that non -agricultural salary statements increased 147,000 in June, but this number was revised to 14,000.
Reviews are common because investigative studies used to estimate the number of workers in the economy continue to intervene for weeks after the initial report. But Trump, without providing evidence, stressed the latest descending reviews to be an attack on political motives. His reaction was to shoot at Bls Erika Mcensarfer.
In some respects, this decision is more concerned than the salary salaries numbers that are not cultivated themselves. Michael Ferrolly, a JPMorgan analyst, commented, “The risk of politicizing the data collection should not be overlooked.” and Barclays “This step can lead to markets that question the integration of data, especially for the publications that surprise investors.”
In short, investors now have a reason to wonder whether the next BLS commissioner will process data to make Trump happy. After all, it seems that Mcentarfer simply lost its job because the agency issued data that thwarted the president, as it suggested that the labor market weakens in response to its definitions and the uncertainty they created.
To summarize, Trump imposed the harshest definitions of the American economy for decades. On the other hand, Wall Street tightly reduced the S&P 500 profits, and there are more possible declining reviews (if not possible) after the latest report of non -agricultural salary statements.
Meanwhile, Trump invented more uncertainty by launching a BLS Commissioner with confirmation without evidence that the latest non -agricultural salary numbers were false. This asks: Will investors wonder whether Future BLS has been processed? If so, the consequences of the stock market may be disastrous.
These events are particularly concerned because the S&P 500 is already trading with a very rich evaluation of 22.2 times from the profits forward. Historically, the S&P 500 index decreased by 6.4 % in the year following accidents in which many price is led to profits 22, according to the director of the hedge fund, Leon Cobman.
In short, the stock market will be on a shaky land without tariffs or questions about data integration, but these variables make the current situation not in particular unstable. Therefore, investors must be mentally prepared to decline. This means avoiding stocks that are traded in ridiculous assessments and building a modest cash position.
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