In full disclosure, as I’m writing this at 11:00 AM, the markets have done two complete 180s already on the day, and I’m not sure we’re done.
It’s a perfect encapsulation of the totally unpredictable environment we currently find ourselves in.
As I’m fond of reminding people, the market fears uncertainty more than anything. And there is a higher degree of uncertainty right now than at any point that I can remember — perhaps even more than COVID.
Here’s just a sampling of the questions investors are faced with right now:
- How committed is the Trump Administration to a tariff policy that has already wiped trillions from the stock market?
- Is the Administration using these tariffs as a bargaining chip to lower foreign trade barriers, or are they a permanent part of international trade policy?
- How will foreign nations react to the increase in these tariffs?
- Will these tariffs result in an international trade war? In a global recession?
- Will Congress step in and try to block tariffs?
- How quickly can American companies reshore manufacturing and offset the impact of tariffs — if that is even possible?
And there are a thousand more I could list.
The fact that the Administration doesn’t even seem to know the answers to some of these questions is only fueling this chaos and uncertainty.
I heard an interview with Ezra Klein last week where I thought he made a really valid point.
He said the tariffs have at least four aims, citing these:
- To raise money
- To insource production (reshoring)
- To create leverage against other countries (and get concessions on things like fentanyl and border policy)
- To reshape global trade policy
And then added that you cannot pursue all of that at once. You can’t raise money from taxes on foreign goods (which is essentially what tariffs are) and simultaneously re-shore foreign manufacturing. They won’t both work.
You can’t keep prices as low as possible and also move manufacturing back to the U.S.
And the fact that these disparate aims are all part of the conversation swirling around tariffs leads to mass confusion in the markets, which is why the five-minute chart since Friday’s close looks like this:
Now, even Bill Ackman, one of Trump’s vocal supporters during the campaign, is openly begging him to pause tariffs and forestall what he called an “economic nuclear winter.”
But on Sunday night, President Trump said the markets need to take their medicine, implying that he’s perfectly ok with what’s going on right now.
It’s all a lot to stay on top of. And I wish there was some easy answer to give you right now.
There isn’t. But what I can do is call together another LIVE roundtable session this afternoon, and that’s what we’re going to do.
I’ll be hosting a LIVE roundtable at 3:00 PM ET today.
I’m working to confirm guests as we speak, but I know Nate and I will be there, navigating you through whatever the markets look like four hours from now.
You can RSVP and get yourself a free reminder from Zoom if you sign up here
Even as I’m writing, the market environment keeps shifting, and it looks like the Mag7 (or, a lot of it at least) is trying to drive us back higher:
Who knows what the markets will look like when we’re LIVE at 3:00 PM ET today. But I can’t wait to see you there.
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