Bloomberg – Wait three days to see if you change your mind before doing operations. Hurry to sell bonds before you wake up and get written. Displace loans to preservative producers to tariff proof or mobile phone suppliers.
All these are ways in which credit investors and bond organizers desperately try to overcome the incessant bombardment of policies from the social media account of President Donald Trump.
See more: In which US corporate bonds
More than 12 credit entities and debt bankers with which he talked Bloombergmost of whom asked to remain anonymous to discuss delicate information from the commercial point of view, they said they had been forced to carry out a series of defensive movements after many resented themselves before the initial efforts to treat Trump’s pronouncements with total seriousness.
when Trump made public the imposition of a 200% tariff to the wine in Europe, for example, a series of investment banks began to carry out Extrabursatile operations in potentially harmed companies Below the market price to get ahead of the crowd, according to a person who knows the situation.
This included the bonds of Ardagh Group SA and Verallia containers, and the Italian manufacturer of Fedrigoni Spa labels.
But in a few days, The sudden fall of the prices of these bonds was completely erased Being clear that the threat was not real. When tariffs were announced, wine was not mentioned.
It was not an isolated case in credit markets, since Trump negotiates through social networks and floods the area with often contradictory messages. The threat of imposing 50% tariffs on Canadian steel was also quickly abandoned.
Some banks and investors have begun Adopt a “72 -hour rule” After all Trump’s messages, according to three important debt financiers, believing that this policy could really go into force if by then it has not yet changed course.
The markets staggered last month after Trump announced that he would impose unique tariffs in a hundred years, both allies and enemies.
See more: Blackrock changes strategy to balance their funds in the US and Europe
A strong wave of sales, especially in American actions and bonds, forced him to suspend purchases from all countries, except China, for 90 dayswhich triggered a relief rebound that helped compensate some losses, but not all.
“We no longer act because there is always the risk of reversal. I think we are becoming immune to part of it,” he said Insight Investment portfolio manager, who pointed out that the European garbage bond market has almost completely recovered after suffering one of the worst falls in years in early April.
The European credit risk has shot in April.(IHS Markit)
Credit has recovered more than other classes of assetsbut it is still impossible for corporate debt buyers to assume that this will continue to be so, which increases the pressure on a crucial source of business investment just when economists estimate a 45% probability of a Trump -induced recession during the next year.
S&P Global Ratings has even begun to add a note to many of its evaluations of the credit solvency of the borrowers, citing the “high degree of unpredictability around the implementation of policies by the US” And warning that, as a result, their “base forecasts lead to a significant amount of uncertainty.”
Early beginnings
Be in hourry areas other than the American can facilitate Survival to the sudden fluctuations of monetary policy.
In Europe, bankers are accelerating the process of selling bonds to try to have the details ready for safe investors before Trump wakes up and begins to publish. And to anticipate the volatility of US markets, which can destabilize trust.
“We are all fully aware of the risk of headlines during the 24 hours, whose frequency increases during the US hours,” he said Matteo Benedetto, Morgan Stanley investment grade union co -director for EMEA for its acronym in English, Europe, the Middle East and Africa). “Without a doubt, it is better to close an agreement before the start of the New York session.”
The Irish company of Telecommunications Eiracom Finance Dac announced a bond sale, made investors calls and set the price of the operation, all the same day, an unusual event in the garbage bond market.
At a higher level of qualification, the luxury giant LVMH Moët Hennessy Louis Vuitton set the final terms of an agreement to two parts for € 1.9 billion (US $ 2,150 million) before 1 PM, local time, closing it before the opening of the US market. It is a degree of urgency that is not usually justified for a frontline giant.
“We have to be very careful regarding exposure to market and prioritize the efficiency of the process and the execution schedule; we have to work with the two market openings in Europe and the USA,” he said James CunniffeHead of the Corporate and Structured Debt Markets Union of HSBC Holdings for Europe.
See more: US bonds had atypical performance in April: Did the worst happen?
Con Many companiesfrom General Motors (GM) and Mercedes to McDonald’s (MCD) and Procter & Gamble (PG), either reducing their benefits forecasts or reporting lower salessome debt investors are resorting to non -cyclic and everyday businesses, with greater capacity to survive a lasting change in US tariffs.
Insight, the Braganza firm, analyzes from canned tomato producers to mobile phone service providers.
“People do not stop overwhelming the tariffs and are not going to get rid of their mobile phones,” he said.
Others claim that debt buyers must return to the basics, focusing on the foundations of the business and fundamental valuations, although it is easier to say it than to do it when supply chains are so interconnected.
Pepsico (PEP) has reduced its forecast by 2025 and Face higher costs in the supply chain Due to tariffs.
Reacting to Trump’s publications is “more an art than a science,” he said Fabiana FedeliGlobal Director of Investments in Actions, Multi -Care and Sustainability of M&G Investments, at a recent round table.
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