Markets React to Trump's Tariffs | Roundup Clip

Transcript

Michael, what do you think about the market reaction here? So, we're actually down. I will say people are treating this like it's Armageddon. We're almost at parody to where uh the S&P was when Trump took office back in November. So, I will say I have seen and you know, we could say this and then tomorrow when this podcast airs, the market could fall off a cliff and go limit down. But, you know, the market actually has been relatively orderly here in the sell-off. Obviously, crypto's down a good amount. It does surprise me that the market hasn't sold off more on this news. if you were to take it at face value. So my assumption is that the market is discounting that cooler heads will prevail here. What are your what's your read on on the market?

Um well it's one of two things. Either they're calling his bluff, the market is calling the the Trump put or the tariff put. Um and it's not going to actually get implemented. Negotiations are going to relax these tariffs. Um whatever happens isn't actually going to go through. Um I I don't necessarily think that that's gonna happen at this point. Like it he's he's not one to back off. Um and I think having all of this um uh attention on it just furthers further entrenches the perspective. Um I I think what is good is that we're hap this is all happening at once where where I

think we could have gotten into a really tough even tougher place would be this week it's this next week it's that the week after that it's this other thing and we just kind of over the last couple of months since he started talking about this it has felt like he's gone back and forth two or three times in terms of you know what's going to happen what's not going to happen we're you know delaying the implementation it seems like there's a plan now so like Everybody knows and it's not surprise. Uh it was surprised yesterday but everybody now knows and I I I think the other option is it's not going to affect um as much because there will be either workarounds or there will be um ways of of mitigating this and there will be certain companies that

take much larger hits than others. I mean, yesterday, uh, the Restoration Hardware CEO had, uh, the live chart as this was getting announced as he was on the earnings call and didn't see what happened and like into the mic literally goes like, "Oh, shit." Oh, Everybody's surprised, right? Um and and so certain companies that are literally importing their product uh or or their manufactured um product to be sold in the US um they're going to have issues like Nike's down I don't know how much percent but they were 12 or 13% was what I saw earlier today. Um so may maybe there is sort of like a a re-evaluation

of like which companies are going to do well with this new new construct and which ones are not. Um what will be really interesting is kind of like what's excised out of this. Um and and it seems like semiconductors had a pretty clear excise from from this policy. Um and and so maybe it is something where you know certain companies it it like dispersion happens where certain companies aren't doing as hot, certain companies are going to be okay. Uh but that net net doesn't actually affect that much in terms of like the S&P 500 or the NASDAQ. Um what is unclear is what basically the retaliation uh could be. Um you know we are we are large exporters of digital

services uh and and digital products. What what if those uh are are you know reciprocally uh tariffed in the same way um or gone after you know that would be a much larger hit to the S&P 500 and the NASDAQ. Um so I don't know. I mean it it it is moving in real time. Um but I agree. I think I mean the market's sold off a lot. Uh and this is this is definitely one of the larger single days in the last few years. Um but there's still so much to be uncovered. It's unclear as to you know what could happen. Um and and that's where I think you know another limit down day could be um you know reciprocal digital services where the MAG 7 is attacked. Um, like if if

that was to happen then that would have a much bigger effect than even what happened today. Yeah, I saw a quote from Scott Bessen and I don't this was one of those you know DB accounts that uh so I don't know if this is actually 100% accurate but this is a mag seven problem not a MAGA problem and you know to your point oh by the way just on the uh the calculation of trade deficits as well they just did this on goods not on not inclusive of services and as you mentioned we export services so just another you know pretty large omission here but it also does I can tell you where it's one of two things, right?

Either, you know, he is just so focused and this administration is extremely focused on kind of the common man and main street here above Wall Street or this is a very clever there's another ulterior motive here that's being hidden that this to my mind relatively complete story is offiscating. So I have no idea. Um but I I do think that you know a huge problem in the United States for a very long time was that we were exporting middle class jobs overseas and I think there was a decadesl long scop that that's not the case and don't you understand comparative advantage and you know the comparative advantage people

are right on a global basis but comparative advantage doesn't mean that has to occur to everyone equally and it was really disproportionately hurting a large portion in voter base in America. And so, you know, my thought on this is I don't like this. This does not benefit me. I do not like these policies. However, you know, this is what you get. This is this you reap what you sow. You you did not solve this problem. You gaslight this huge portion of the population. And you know what? Finally, there has to be the pressure built up and it exploded out of a valve. And it could have been any valve, but the valve happened to be populist policies and tariffs. So, there you go.

Right. And I completely agree with all that. Um I I think uh yeah, this is definitely a re-shifting of Wall Street to Main Street. Yeah. And it it I I guess the broader point is that that reshifting isn't going to happen overnight. It's not it's not services and it's not digital that we're talking about. It's it's physical products and physical manufacturing that we're talking about onshoring again, which takes time. Um I I I I think for that reason alone, you know, it's it there's going to be, you know, more market pain. Um and yeah, it's there there's still so much to unravel um with all of this and uh the reactions I I think people are

still digesting uh you know, the our trade partners are still digesting how this will work and what this will look like. Um I think the implementation dates are like you know April 5th for some of these, April 9th for some of them. Um so you know they're up they're coming um very soon but it'll be it'll be really interesting to see um kind of what the reactions to all of this will be because that will dictate you know new earnings forecast, new revenue forecast like all of that has to be rewritten. Um and and I think maybe that's one of the reasons why the market hasn't sold off as much as people would have expected.

because we still just don't know. Um, and you know, there there's the the knee-jerk reaction of like, okay, get to cash, sell, um, and wait. Or there's the other reaction, which is we just don't know. So, and the market's already down so much in the last, you know, month and a half. Yeah. Right. You want to wait and find out more information before you make a decision like that. um which should lead to to further days like