The latest exceptional results for American companies in the scholarships, which are now being interrupted by the Trump Government’s trade war against all countries in the world, may be directly linked to pro-cyclical fiscal policy adopted in the United States in recent years.
The assessment is from economist Gustavo Medeiros, macro research global head of head Ashmore – one of the most relevant in the world in emerging markets. He brought his current view of markets during participation in the program Warehouse pickerPresented by Lucas Collazo and Henrique Estets.
Medeiros explained that, when analyzing profit data per share of US companies since 1955, he available on the Bloomberg platform, observed an average growth of 6.6% per year in 2017. However, from 2017, this growth jumped to 9.2% per year-an implementation as it considers atypical and strongly driven by extra-chair.
According to its estimates, if EPS had followed the historical average of 6.6% and the market worked on the same multiple observed at the end of January (25.5 times profit), the S&P 500 index would be about 4,600 points – well below 6,100 points.
“This difference in valuation represents about $ 13 trillion – the same amount that the US government has spent more than it should. This is not just a coincidence: it makes sense from the macroeconomic point of view.”
Medeiros also questioned the dissertation that the performance of technology giants – the conversations Magnificent seven – It would be explained only by technical progress. He points out that even with the growth of the Internet and innovation since the 1990s, EPS growth has not accelerated significantly in 2017.
In addition, the proportion of revenue from these companies from 55% in 2016 fell to about 45% in 2024, even with economies such as China and India that grew more than the US during the period.
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“American exceptionalism over the past eight years has been more related to fiscal impulse than to structural factors such as technology or the rule of law, which already existed before.”
Non -sustainable dynamics
For Ashmore’s strategist, this dynamic is not sustainable. He believes that 2025 will highlight the beginning of a fiscal consolidation in the United States, as the country will not be able to continue to increase public expenses indefinitely without meeting debt difficulties.
“The United States must roll $ 10 trillion a year. If there are no credible signs of financial adjustment, this may generate serious distortion on the market.”
Trump’s customs
If commercial tariffs defended the strategist a pragmatic strategy. He sees prices of up to 12% as an effective collection form, comparable to a tax tax (VAT).
“Part of the ticket price is absorbed by export companies and the internal value chain, which can make an impact on the end consumer less than a direct tax increase.”
However, he warned that prices above this level can be counterproductive by adversely affecting GDP and consequently the collection.
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The implementation of new prices is scheduled for Tuesday, April 9. Medeiros believes that the United States will use these prices as a negotiating tool in international negotiations, especially with China, which can be avenged the next day.