I listened
to this interview with a think tank connected to the 'new conservatism'
movement that Vance is part of.
The concludion is Vance's team will push for this, Trump
might not agree with all the policies though but I think must be on
board with much of it, basically pro worker, pro SME policies:
Tariffs will hurt goods producing platform company profits and encourage nearshoring within the US, not Mexico
Some question marks on NAFTA and Mexico
Regulate big tech, but I think a super profit tax is more likely than utility style price controls.
- All this is bad for S&P heavyweight stocks/ NASDAQ specifically
Labour
and industrial policies - so pro primary and intermediate industries
win, min wages (retail/ labour intensive consumer industries lose), work
with unions etc, benefits the fly overstates and hurts silicon valley
and wall street
Can
see some policies encouraging investment on wall street and not short
term trading or speculation, such as short term capital gains taxes.
They will want people to make money from investment and creating jobs not speculation on asset prices or real estate.
Pro family policies, so cant see taxes going up on bottom 75% but can see it on top wealth/ earners/ rent based sectors
Has to be pro-cyclical and inflationary after the coming recession scare
In
2019 I looked at the TIC data since 2008 as I wanted to see how the CA
deficit had been supported (havent bothered looking at it since as I doubt it has changed all that much), it was $4Tn in total at that time. Half had been equity
flows and half fixed income. Any sign of neg equity outlook for listed
equities and some of that money will hit the exit and the USD I think.
To
put it in context, for after tax corporate profits as a percent of GDP
to come down to post-WW2/ pre-credit super cycle/ global platform
company averages, they would need to fall from 10-11% to about 6%, so a
40% fall on through cycle averages.
Post downturn profits historically fell to 4-5%.
S&P average margins are currently about 12%, so slightly above average.
