Gold bars to be exempt from tariffs, White House clarifies
Investing.com - Stocks are likely to see volatility in the coming months as markets gauge ongoing debate over a massive U.S. tax-and-spending bill and assess the impact of recent trade tensions on upcoming second-quarter earnings, according to analysts at Barclays (LON:BARC).
"We see choppiness over the near term as markets await clarity on U.S. fiscal policy," the analysts said in a note to clients on Wednesday.
Republicans in the U.S. Senate are racing to release an updated version of President Donald Trump’s "big, beautiful bill," with the GOP facing a self-imposed July 4 deadline to pass the sweeping measure.
Lawmakers remain at odds over the spending cuts and borrowing increases that will be neededto fund tax relief and elevated expenditures on defense and border security. Slashes to the Medicaid program for low-income Americans and clean energy tax breaks are among the most pressing points of contention.
The House of Representatives previously passed its version of the multitrillion legislation by a thin margin, with Republicans in control of the lower chamber just about overcoming party holdouts and Democratic opposition.
Should the Senate pass its version, the House would then need to approve it before a final bill is sent to Trump’s desk to be signed into law.
Meanwhile, the Barclays analysts said second-quarter earnings are likely to feature the "first substantive hit" from Trump’s aggressive trade agenda. The effective U.S. tariff rate has risen sharply since Trump returned to office in January, although the president has delayed heightened "reciprocal" duties on most countries until July.
The U.S. and China also reached a fresh deal this week to put their trade truce back on track.
Speaking at the end of two marathon days of discussions in London on Tuesday, U.S. Commerce Secretary Howard Lutnick said the agreement will put "meat on the bones" on a prior deal struck in Geneva last month -- which, despite easing some fears over an intensifying trade conflict between the world’s two largest economies, has shown signs of fragility.
Still, the analysts said uncertainty around Trump’s tariff drive is "in the past," while the broader economic environment has remained "resilient" and investors are re-focusing on the possibilities of artificial intelligence.
Against this backdrop, the strategists led by Venu Krishna said they favor U.S. stocks against equities in other regions around the world.
"[The] ex-U.S. valuation tailwind has lessened with large-cap European/[Asia Pacific] stocks trading at similar 10-year percentiles as large-cap U.S. stocks," they wrote. "Style-wise, U.S. also offers better quality exposure at lower volatility than Europe/[Asia Pacific]."