Summary

1. TACO – Trump always cashes out. May D. Trump outsmart the market by employing the anchoring effect?
2. As of now, it´s not the US trading partners paying the tariffs (as Trump claimed) but US companies. In that sense, Trumps tariffs are the greatest increase of US corporate taxes since the 1980´s.
3. MAGA doesn´t mean make profits great again. Even though we have higher risk for (already lower) growth, clear evidence for margin pressure and an at least quadrupling tariff rate, earnings expectations and valuations are back to a “goldilocks” scenario. We reiterate our underweight rating on US equities.
4. How do you spell opportunity? I-N-F-R-A-S-T-R-U-C-T-U-R-E -> Easing trade frictions, growth tailwinds form defense and infrastructure spending as well as an increasingly attractive shareholder yield premium makes European equities hard to resist. We upgrade to overweight.
5. Earnings outlook: Over the last few weeks, earnings expectations have rebounded in the US, whereas they are under pressure in Europe. The outlook (especially related to tariff impacts and margins) may be more important than the actual numbers.      
6. In Europe, we still prefer domestic sectors and those sectors that are benefiting from the massive fiscal stimuli being put in place. Banks remain among our top picks

No sector change in the US.