As Donald Trump’s odds of winning the White House seemingly improve, investors are being warned that a swift retaliation from Europe would likely deliver a hammer blow to US stocks.
The stark warning from Nigel Green, the CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations comes as a basket of 28 European stocks exposed to US tariffs compiled by Barclays has tumbled 7% since late September as the former president’s odds of an election victory shorten.
He says: “While market analysts are closely tracking the slide in European stocks impacted by the prospect of new US tariffs should Trump win the presidency, we’re issuing a crucial warning that’s been largely overlooked: American companies with substantial European sales may be next in line for a hit.
“As Donald Trump’s odds of winning the US presidential election improve, we believe the market is underestimating the risk of swift European retaliation and the pressure this could place on key American stocks.
“If Trump returns to the White House and reinitiates his hardline trade policies, Europe is likely to respond in kind, creating a significant downside risk for US companies with exposure to European markets.
“This includes leading firms across sectors from tech and consumer goods to luxury and automotive, which could see profits squeezed by tariffs and changing market dynamics.
“Many of these companies, which rely heavily on revenue from Europe, are still trading at robust valuations—a vulnerability that may soon be exposed.”
He continues: “Investors need to consider the very real possibility of a new trade conflict between the US and Europe.
“While much of the focus has been on European stocks with exposure to US markets, the impact on American companies with significant European sales has largely been ignored. This is a clear blind spot that we’re urging investors to take seriously.”
A proactive approach now could make all the difference. For investors looking to stay ahead of the curve, assessing portfolios for exposure to European markets and repositioning holdings in anticipation of potential volatility is essential. By heeding these early signs, investors can protect their assets and potentially capitalize on a market shift that others may overlook until it’s too late.
In a time of heightened global uncertainty, being prepared for unforeseen outcomes is key to safeguarding investments. Investors need to stay informed and ready, and seek advice, insights and guidance to face these challenging conditions.
Nigel Green concludes: “As Trump’s White House chances seem to approve, we’re sounding the alarm on US firms with heavy European ties and market dominance as retaliation is likely to be swift.”
