LIVE MARKETS-Tentative optimists mull best outcome after Trump tariffs

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TENTATIVE OPTIMISTS MULL BEST OUTCOME AFTER TRUMP TARIFFS

The market reading looks clear: U.S. Donald Trump's tariffs are seen as bad for growth, recession risks are rising, and we're all in the dark over how this will play out.

But a few investors are mulling best case scenarios as they assess the damage.

Altaf Kassam, Europe head of investment strategy and research at State Street Global Advisors, said a best-case scenario would be announced tariffs planting "a flag in the sand" from which the U.S. administration would be comfortable retreating over the medium term.

"Only the feeling that we have ‘reached a limit’ could allow equity markets to move on", he said, but adds that feels a long way away.

Kasper Elmgreen, CIO of fixed income and equities at Nordea Asset Managament, said the tariffs were worse than expected but offered one cautiously optimistic view.

"One potential positive outcome is this is a shock to the system and it stabilises, this is a negotiation, a tactic to reset what is seen as an unfair system. That could create some kind of certainty," he said.

On Thursday, the STOXX 600 .STOXX was last down 1.7%, its biggest drop in a month.

Dan Coatsworth, investment analyst at AJ Bell, said the selloff could have been a lot worse, though that might not be the boon it seems.

"It might simply be a coil that takes some time to unravel and that's potentially a worse situation for investors as confidence could remain weak for some time."

"At least with a rapid and severe sell-off, investors deal with the pain and then hunt for bargains as the dust settles."

(Lucy Raitano)

EARLIER ON LIVE MARKETS:

TARIFF RISKS, IS PHARMA OUT OF THE WOODS? CLICK HERE

DEFENSIVE BUYING LIMITS THE DAMAGE CLICK HERE

EUROPE BEFORE THE BELL: HEAVY SELLOFF COMING CLICK HERE

SEEMS INVESTORS REALLY DON'T LIKE TARIFFS CLICK HERE