The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Tariff talk.
It was a quiet day at first. The S&P opened about flat and began to drop around 9:45 AM. The tape legged down further just after 11 AM and by lunch the index was -45 points. Along the ride down, the administration announced that President Trump would announce auto tariffs around 4 PM today. While Trump tariff announcements should not be surprising to *anyone* they surprised the market just the same. I can’t explain it, nor will I try. Anyway, the market sank gradually by the afternoon and was -75 points with an hour to close. Yields were up a little and Fed Funds price 63 bips of cuts into 2025.
Maybe the Monday bulls convinced the market too well, that tariffs and Liberation Day were non-events? With a bolt-from-the-blue tariff announcement today, the broader market felt the bearish chill that perhaps President Trump isn’t going to do small things with lots of exemptions. The truth is unknown, so we’ll just have to find out.
We’re waiting for the auto tariff news. From that, the market will attempt to frame expectations for the April 2nd announcements. Who knows what’s in store. The market *thought* it knew on Monday. Today it was rudely awakened.
My advice is to not speculate on what the tariff talk *might* be and to simply react to what gets implemented.
Understand along the way also… that while the market remains unsure about the future of trade, decisions that matter, capital expenditure and allocation decisions, are being paused. That fact in and of itself has consequences.
See you tomorrow.
-Mike
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