Peter Malmqvist believes that the market reactions to President Donald Trump's 30-percent tariffs will be relatively mild.
The market wants to believe in its initial analysis, that the president is for growth, he says.
Previous major downturns, such as the tariff chaos on April 2, the rate shock and the pandemic, have been recovered with ease. Then it becomes low interest in selling now, despite negative information, he explains. It is simply worse to be outside than in the market.
Those who sold at the bottom became losers. The stock market becomes afraid to sell in a downturn.
Manageable
The tariff threat is not good, but still manageable for companies, believes economist Frida Bratt.
If the stock market's logic holds, the market could interpret this as "it could have been worse - it could have been 50 percent, which he initially threatened with", says Frida Bratt, economist at Nordnet.
Of the many export-dependent companies on the Stockholm stock exchange, it is particularly the engineering companies - a dominant sector on the stock exchange - that will be affected by the tariffs.
Some margin
Of course, there is a vulnerability there, but there is also a certain margin on the stock exchanges, given that they have gone so well despite the fact that we have had these threats latent over us all spring, says Frida Bratt.
So how likely is it that the tariffs will end up at 30 percent?
It is probably the question that the market has asked itself all spring and come to the conclusion that it will not be that bad. The hope is that the last word has not been said and that companies can pass on the increased costs to the consumer, says Frida Bratt.
However, it is easier said than done in a low-growth economy where consumers are already holding their wallets tight.
