The row between Ukraine's President Zelenskyj and US President Trump in front of the world's eyes should perhaps have created a scare on the stock exchanges. But instead, the leading indexes on Wall Street surged in the final Friday trading.
I miss the logic in the stock exchanges' reaction, says Robert Bergqvist.
But if he takes out the magnifying glass, as he puts it, and is to find some substance in why, then the tariff issue may be what primarily drives the economic reactions in this extremely uncertain situation.
Most important in the near future is the tariff war, even if it is also uncertain, he says.
New Tariff Figures
This week, it is said that the US's 25-percent tariffs against Mexico and Canada will come into effect. But Mexico has now announced, according to information that came during Friday evening, that it intends to follow the US and also introduce tariffs against China. Since many goods pass through Mexico into the US, it may possibly appease Donald Trump and get him to change his mind in the tariff war against his neighbors.
Normally, a positive stock market development in the US would rub off on the Stockholm Stock Exchange. But it is absolutely nothing that Robert Bergqvist would rely on in this situation.
It is two days ahead where extremely much can happen.
Trump can come with new statements. And Europe's leaders will meet on Sunday.
Discomfort
As a small investor, one can probably feel discomfort. It is important to be aware that stocks are risky, but also to think long-term if one is to be on the stock exchange. Right now, it is a very uncertain world, reasons Bergqvist.
So far this year, the stock market picture has been rewritten. The Americans have lost momentum and Europe has ended up in the center among investors, even among Americans who have shifted money across the Atlantic with rising European stock exchanges as a result.
One explanation is that the uncertain security policy situation has put the European defense industry in the spotlight.
The concern lifts the European defense industry, which in turn creates ripples with, among other things, more investments in infrastructure. This war of words can likely lift the defense sector even more, says Bergqvist.
