BeBeez roundup with eToro support about the performances of private capital firms listed on global exchanges.
Donald Trump Administration’s announced 25% increase in tariffs on imports from Mexico and Canada, and 10% on imports from China resulted in a weekly loss of 2.6% for the Dow Jones index and 3.1% drop for the S&P500. The S&P posted a worse loss despite its focus on companies that target the domestic market rather than international sales as US companies import commodities and production inputs from these three countries.
Higher tariffs mean lower margins and stronger inflationary pressures which may lead to higher interest rates. The announcements of possible retaliatory tariffs of EU countries and many nations exporting in USA also triggered further general uncertainty and had negative repercussions on the opposite sides of the Atlantic and Pacific Oceans.
Such a scenario is a deadly cocktail for the private equity stocks, including those that BeBeez and eToro included in the Trading Floor portfolio. The interest rate trend and the the profitability of portfolios are the key drivers for the stock price of private capital firms.
Only three managers closed the week with a positive performance, while the share price of US private equity giant KKR sinked with -15%. Blackstone share price posted a -10%. The firm’s co-founder Steve Schwartzman supported the electoral campaign of Trump.
Frankfurt-listed turnaround investment holding Mutares (a comparable of Milan-listed Italmobiliare) surprisingly increased its market capitalization by +13.8% as it improved its P/Sales ratio that was previously lower (0.1) despite a 132% increase of portfolio companies’ turnover in 2022-24. Since the tariff storm sowed panic in the stock markets maybe because of the impact on the sales of many firms, investors may have decided to purchase the stocks of businesses that already faced a situation of distress.
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