In recent years, he struck me and was still surprised at me how the markets were ignored by the most dramatic political and economic events. Pandemics, wars, the collapse of the World Trade System, the growth of right -wing nationalism and left populism: nothing seems to soften the spirit of animal investors.
Various reasons for this were approved: from corporate profit, still high to the promise of artificial intelligence (AI), through the trade, Tac Donald Trump Trump (the president of the announcement of high tariffs that cause economic shock and fall to the stock markets, and then treat pauses or reduction, which create a bouncer of the markets). But I would like to offer another reason: the world simply did not accept the new economic narrative. Until we do this, we will probably remain in the period of vague intraitinity in the markets.
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Several reasons are mentioned, such as high business profit, an increase in artificial intelligence and trade promoted by Trump. Photo: EFE.
Historically, the political economy, as a rule, is determined using a wide and strong narrative. The mercantillism of the 18th century gave way to the “Lisses-Fair” of the nineteenth century, which eventually created Keynesianism, which, in turn, gave way to Reagan-Ter’s revolution and the Neoliberal era.
But today there is no unique story about where we are and what is waiting for us. Instead, there are many narratives competing with each other around globalization, inflation, capital markets, politics and technology. All this creates a kind of effect of Ranomon, thanks to which different market participants can interpret the same data and events contradictory.
For example, we know that the World Trade System is in a constant state of changes. Since 2017, there has been less trading between a remote geopolitian. The main economies are “islands”, as the Kearney consultant expresses, focusing on national self -esteem instead of global integration.
However, as the Asian participant told me at the Conference of Executive Directors, on which I visited two weeks ago, all this “occurs in the spectrum”. If you are in the Pacific Ocean, “globalization is more than before, and it is likely that there is even more.”
According to the recent McKinsey report on the change in world trade, of the 50 largest current commercial corridors, 16 will vigorously grow even in the midst of 10% growth in world tariffs and an increase by 60% of tariffs for China and Russia. These are new ways to unite the economy from India to the Middle East.
The effect of Rashomon is also manifested at the corporate level. Obviously, the sector to which you belong is of great importance. But the size is also important. The destruction of trade caused by tariffs will be nothing more than another wind in favor of large companies, since they can demonstrate more resources than small ones to soften side effects.
Several executive directors and experts in the supply chain, with which I recently said, confirms that such optimization of the post -pamic supply chain occurred in large companies, that many can soften 80%or even more inflationary pressure related to tariffs with greater efficiency.
But this is not the case of other key companies. JPMorgan states that Trump’s tariffs will cost us an average of $ 82 billion companies, or 3% of their wages, which will probably mean dismissal and margin of narrower profits. Meanwhile, economists are afraid that many small companies simply break.
The main economies are “islands”, as the Kearney consultant expresses, focusing on national self -esteem instead of global integration. Photo: Archive.
If this happens, and this is that regional officials of the federal reserve system begin to ensure that this, in turn, will have a disproportionate effect on the distribution of employment and wealth in rural areas and in the smallest cities in which smaller employers. This would aggravate the influence of a geographical superstar, in which urban works working in large companies, everything is fine, while the owners of small enterprises and workers in the less populated areas do not.
This separation is part of what contributes to the political unstable and many other countries. In the United States, both right and left populism are currently growing. Those who are under pressure in American republican states can vote as supporters of Trump, while liberal young people who cannot pay a rent in support of the Big Apple Zoran Mamdani, a democratic socialist who may become the next mayor of New York.
I suspect that this narrative will be reproduced in the 2028 presidential election, if the Democrats ultimately choose an economic populist as a candidate that all the reasons why the centrists failed, including Kamalu Harris. But this dynamics opens the door for even greater uncertainty regarding the future of the United States.
As the recent Deutsche Bank survey showed, investors are practically divided equally regarding whether they believe in the future of American exclusivity. 44% were optimistic, believing that, ultimately, no other country could compete with growth and dynamism, despite recent events. But 49% thought that the American position in the world would slowly collapse in the coming years. 78% preferred to keep the euro instead of dollars over the next year, although the share was from 50/50 to five years.
As if all this was not uncertain enough, AI should also be taken into account. Will the technology increase productivity, maintain profits and high prices? Will there be too many jobs to move too quickly, causing greater unemployment and even more populist reactions? Or none of the two things? What countries and companies will win? Can we even afford to pay for energy and water costs?
There is no clear answer to any of these questions. Throughout my career, I have never seen so many factors that could affect the market at the same time. The fact that the markets still do not reflect, this does not mean that they are not going to do this.
