Trump 2.0 Begins... Expectations for Policy Risk Mitigation
Daishin Securities:
"Policy risk burden to ease with Trump's inauguration"
"Tariffs are a negotiation tool, not for maximizing damage"
Expectations for a KOSPI rebound driven by easing policy uncertainty and China's recovery
Focus on undervalued sectors such as automobiles, banking, and steel
Daishin Securities predicted on the 20th that policy risk burdens would ease following the inauguration of Donald Trump as the President of the United States.
Lee Kyung-min, a researcher at Daishin Securities, explained, "It is impossible to impose tariffs on multiple countries immediately after the president's inauguration," adding, "The U.S. trade policy uncertainty index is already approaching an all-time high."
He continued, "Just the calming of anxiety regarding the speed and intensity of policy implementation is expected to lead to a rebound in the stock markets of affected countries," and added, "The key point is that President Trump's tariff policy is a negotiation tool." He emphasized, "It is intended to maximize U.S. benefits through negotiations, not to maximize damage to other countries."
The researcher expressed expectations that "the easing of Trump's policy uncertainty, the visible recovery of China's economy, U.S. price stability, and the normalization process of monetary policy?along with bond yields and the dollar stabilizing downward?will combine to become the driving force behind a KOSPI rebound."
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He advised paying attention to undervalued stocks relative to earnings and sectors that have experienced excessive declines, such as automobiles, banking, insurance, retail (distribution), hotel & leisure, utilities, steel, and chemical industries. He analyzed, "Sectors that have fallen excessively are promising both in terms of earnings and stock prices," and added, "If market stability increases, attempts at rebounds in undervalued sectors relative to earnings will become more distinct."
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