Savita Subramanian, head of US equity strategy at Bank of America Securities, shares her insights on the market’s misconceptions about President-elect Donald Trump’s second term trade strategy.
According to Subramanian, the market’s expectation that Trump’s second term will focus solely on mergers and acquisitions (M&A) is incorrect. She believes that while M&A will be a significant theme in the coming years, it is not the only factor at play.
“I think companies are going to buy other companies if there’s accretion, if there’s value,” Subramanian explains. “Being able to buy a company is a necessary condition for engaging in M&A, but actually unlocking value and finding accretive value is what companies want to do.”
Subramanian also disputes the notion that Trump’s trade strategy is purely inflationary, suggesting that tax cuts could have disinflationary effects. While tariffs are potentially inflationary, she argues that other factors should be considered.
Overall, Subramanian’s insights offer a nuanced perspective on the market’s expectations for Trump’s second term and highlight the need to consider multiple factors when analyzing the impact of his trade strategy.
Source: https://finance.yahoo.com/video/2-things-wall-street-wrong-000000803.html