Nov 16, 2024 12:32 PM IST
The US authorities spent $6.75 trillion throughout the US fiscal 12 months 2024, which suggests a $2 trillion lower by Elon Musk will quantity to 32% off from this spend
Elon Musk’s plans to chop US spending by $2 trillion below the Trump 2.0 administration will strengthen the greenback and be adverse for markets, Christopher Wooden, world head of fairness technique at Jefferies stated in a tv interview on Thursday.
Musk, one in all Donald Trump’s largest endorsers, has now been appointed to co-head the brand new Division of Authorities Effectivity for chopping prices of the US authorities(Reuters)
Musk, one in all Donald Trump’s largest endorsers, has now been appointed to co-head the brand new Division of Authorities Effectivity for chopping prices of the US authorities.
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The US authorities had spent $6.75 trillion throughout the US fiscal 12 months 2024 (October 2023 to September 2024), which suggests a $2 trillion lower will quantity to 32% off from this spend.
“Treasury bond market will sell-off, unless Musk does a surgery of the US administration and is able to pull off the $2 trillion cut,” he said. “This will give a deflationary shock to the US economy and can lead to investors looking elsewhere. If Trump really champions such a policy, since it would mean cutting entitlements.”
The rising bond yields can be the largest problem for the inventory market, he stated.
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Relating to India, Wooden stated that the autumn in Indian shares, particularly the mid-and small-caps, is wholesome and a ‘pure correction’ after a pointy run.
“The Indian stock market has had a healthy correction of late, most particularly in the small to mid-cap space,” he said. “This is in the context of a July-September 2024 quarter (Q2-FY25) earnings season, which has seen the biggest earnings downgrades since early 2020. This seems to reflect the impact of a cyclical slowdown, and is healthy as it has impacted the most expensive part of the market.”
Wooden additionally stated the Reserve Financial institution of India (RBI) appears to be in no hurry to chop repo charges regardless of the worldwide developments.
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