Trump says "Buy the dip!" Then, makes the announcement. The SEC would call that suspicious. But, doesn't matter because all in a day's business as the Supreme Court gave him the power of not being liable for actions performed in conduct of his duties or therewithin....or whatever. Now we know what Trump's endgame was. He was playing brinkmanship to get them to come to the table. It's political bullying to get his way. But, that alone is enough to restore at least some certainty back to what was chaos in the markets.
I still think you have to take Miran and Bessent at their word. Trump didn't create these ideas that he has rolled out in his 2nd term.
If it’s a 90 day pause I don’t understand how this changes anything. just gives these large hedgeunds more time to do what they wish they could in a day. Countries will not negotiate these ridiculous terms. Trade will suffer. seems like todays Green Day is nothing but comfort for the average investor to be used as exit liquidity
It's days like these where you wonder where all that money comes from and where it goes when investors hide...
In the short term it is probably best for their countries to negotiate and give Trump what he wants. It could easily be political theater that placates him. In the long term, they will work together to kill these tariffs, but that will take time and collaboration. I'm not sure how long anyone other than China is willing to suffer in the short term.
I hope future presidents aren't this ****ing corrupt and continue manipulating the market for their rich friends.
What does your crystal ball say? I think the market is pricing in some sort of deal with China, so if that fails then it will hurt...but I don't think enough to test a new low. The 10% ongoing tariff will hurt but I think that is manageable in the big picture. I think a new deal happens with Mexico/Canada even if it is the exact same as the old deal - all in the name of "victory". Aluminum, Europe, cars - I don't know how those end up though. And obviously even if trade armageddon is off the table, corporate earnings will still take a hit from all this nonsense (whether it is less travel/investment in US or more long term with countries hedging by pivoting more towards each other than to the US - a la Europe towards China, etc). If I had to guess, we'll see volatility (duh!) but we won't test the lows. I don't think he will do anything in 90 days* - the bond market has spoken and it is undefeated. *Unless he did all this so that he can get the tax bill passed and then does what he does.....
More volatility to come. Trump admin has called their shot and they want massive global trade and monetary restructuring. The rollout was horrible and this will cause business investment to take a hit because how exactly can you even invest in the future if you don’t know what the tariff landscape is going to be. Let’s also not forget there is the other wildcard of the govt potentially taxing foreign holders of treasuries and potential open market operations to control the dollar if they follow the white paper that Miran wrote. This creates a whole other set of issues. They need to get a lot of bilateral deals signed in rapid fashion and they can’t procrastinate during the 3 month delay. The Fed has made zero indications they are stepping in and seem comfortable with being on the sidelines. M2 money supply is trending up so that does help the market in general. Let’s also remember the market was getting out of control in 2024 and after the Trump election. The valuation bubble seems to have popped and it will be really hard to regain it after all the volatility. Buffet was moving to cash for these valuation reasons. The govt is still running massive deficits and any kind of austerity seems dead. That will help the money printer keep running which is good for the market. But that gets much more complex if changes to treasury taxation occur and if they want to limit the usage of the dollar globally. Less dollar demand means less ability to finance major deficit spending. I tend to like the SPY at that 460-480 range. We had a massive cup and handle formation that broke out in 2024 and a retest of those prior highs and creation of support there would be an excellent place to build a base for the market and get long. I had been moving some of my cash into the market on this crash but only got about 25% or so in. If we get a V bottom then so be it but with so much left unresolved and the creation of even more issues it seems difficult. And again it can’t be forgotten that Buffet moved into hordes of cash because valuations were wild prior to this drop. I think the downward trend has been established and you have to go with it until a clear change in direction breaks it but that will take time to develop in my opinion. Sell the rips and buy the dips.
BofA says all clients were buyers during last week’s sell-off Investing.com -- Bank of America Securities reported a significant wave of equity inflows last week, with clients adding $8 billion to U.S. stocks as markets faced their steepest weekly drop since October 2008. It marked the fourth-largest weekly inflow since 2008 in dollar terms and the 31st-largest relative to market cap, the bank said in a Tuesday report. All investor categories were net buyers, led by institutional clients, who recorded their biggest inflows since December and broke a three-week selling streak. Private clients extended their record-setting start to the year with a 17th consecutive week of net buying, including their sixth-largest inflow on record. Hedge funds also turned modestly positive for the first time since early February. Somewhat of a summary/bulletpoints of the BofA report is here : Equity Inflows Surge Amid Market Slump: What Bank of America’s $8B Report Signals
The Nightmare Scenario of US Treasuries Sell-Off convinced Trump to hit the pause button on tariffs btw, as per Reuters, much of the treasury selling was done by hedge funds to raise cash for margin calls, as the value of their portfolios continues to decline amid the ongoing market rout. effectivley, they sold treasuries and then bought treasury futures.
The history books will require an asterisk for this day that says “see preceding four trading days for clarity”.
the pause erases the "uncertainty" in the market. the market can take bad news, it just can't deal with uncertainty just my guess, effectively. the pauses will be indefinite
