"What happened instead reinforces my conviction that markets are no longer driven solely by numbers, but by "predictability." Professional investors fear negative news far less than they fear sudden decisions with unclear trajectories, and this is precisely what is reflected in the series of statements and proposals issued by President Donald Trump over the span of just a few days, ranging from banking and technology to energy and even monetary policy."
"The drop in JPMorgan's stock despite its operational outperformance reflects, in my opinion, an important shift in how bank equities are being priced. The market did not punish results; it punished the potential future. Talk of imposing a cap on credit card interest rates, even if only for a single year, directly undermines the profitability model of both the banking and consumer sectors."
The S&P 500 pullback from record highs signals a shift toward a market phase where traditional economic factors intertwine with direct political intervention. Investors are reassessing political risk with the same weight as inflation and interest rates, and the decline occurred despite better-than-expected inflation data. Markets now prioritize predictability over raw data. Sudden, unclear policy decisions have heightened fears among professional investors. Statements and proposals from President Donald Trump across banking, technology, energy, and monetary policy have increased regulatory uncertainty. That uncertainty is pressuring bank equities and spilling over to payment companies as investors reprice future profitability.
Read at London Business News | Londonlovesbusiness.com
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