02. MACROECONOMICS & STRATEGY
The election of Donald Trump and the Republicans to Congress
1. A positive effect on the results of listed companies through:
✓ Lowering the corporate tax rate from 21% to 15%: estimated impact on earnings per share of 3%/4% in 2026.
✓ Renewal of the household and business tax cuts enacted in 2017: $4,600 billion over 10 years
✓ Cheaper energy: end of restrictions on oil and gas drilling
✓
Banking deregulation
2. A significant risk of rising interest rates due to:
✓ Inflationary expectations: customs tariffs, expulsion of illegal immigrants, etc.
✓ The real rate: widening budget deficit, uncertainty about the future and rise in the terminal rate
3. Very different economic environment between Trump 2.0 in 2024 and Trump 1.0 in 2016:
✓ Positive growth deviation from trend, twin deficits (public 6.4% , current 3.7% )
✓ Market performance and valuation (PER 22.9 vs 17)
➔ Can artificial intelligence come to Trump's rescue?
Public
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Source : Rothschild & Co Asset Management – 2024
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