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Why it turned red yesterday - The analysts estimates | TheGreekDeal.com
Athens Stock Exchange
Why it turned red yesterday - The analysts estimates
The Athens Stock Exchange and other European stock markets were down yesterday, in the wake of the tariffs decided by Donald Trump's administration.
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The Athens Stock Exchange and other European stock markets were down yesterday, in the wake of the tariffs decided by Donald Trump's administration. It is recalled that these are tariffs of 25% on imported goods from Mexico and Canada and 10% on imports from China.

Although so far no tariffs have been imposed on the European Union, investors are discounting and selling shares.

If tariffs are imposed, then European industries will be hit, and growth will be reduced. All this at a time when the Eurozone is flirting with recession, with major economies such as the German and French economies in bad shape. So if the next victim of Trump's tariffs is Europe, then it will make it very difficult for the economy, and of course the ECB will try to stimulate the economy with interest rate cuts. These are the reasons for the fall of the HA and the Euromarkets. 

WALL STREET

Trump's tariffs may reignite inflation and hurt the earnings of the companies that make up the S&P 500 index. "Our economists describe the outlook as unclear but believe there is a significant chance that the tariffs on Canada and Mexico are temporary. Large tariffs pose a downside risk to our earnings estimates and our expectations for S&P 500 returns. If company management decides to absorb higher input costs, then profit margins will be squeezed. If companies pass the higher costs on to their end customers, then sales volume may suffer. Companies may try to put pressure on their suppliers and ask them to absorb part of the cost of the duty through lower prices. We estimate that each 5 percentage point increase in the US tariff rate would reduce earnings per share of the S&P 500 by about 1% to 2%," Goldman Sachs said. 

DOLLAR

"Currency strategists believe that the tariffs will also lead to further strengthening of the dollar, although this will have a limited impact on overall S&P 500 earnings. Overall, S&P 500 companies derive 28% of their revenues from outside the US," the firm adds. 

BARCLAYS

According to Barclays' estimates, the tariffs could cause a 2.8% hit to the earnings of S&P 500 index companies, taking into account retaliation from countries targeted by the US.

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