The market action is all about President Trump and his tariffs, with opinion divided on political lines on effectiveness of tariffs. Personally, I believe he’s not wrong about manufacturing needing to return to US, but the message gets lost in the divisive messenger. Luckly for us charts don’t have opinions, writes Ian Muprhy, founder of Murphy Trading.
Tariffs of 34% on China (total 54%), 24% Japan, 20% EU, and 10% UK were added, in addition to 25% on autos. Some Asian nations (Cambodia 49%, Vietnam 46%, Bangladesh 37%), off-shore for China. Treasury Secretary Scott Bessent said: “As long as you don’t retaliate, this is the high end of the number.”
Meanwhile, gold made another all-time high, while stocks, bonds, and the dollar sold off. As highlighted over past few months, and in last month’s meeting, pivot away from US equities.
European defense firms can’t carry the whole world’s investment, though, and are getting overbought. Talk of a global recession is back in the cards. Remember: The market will precede the economy, so the selloff will happen first, then the recovery in indices will come at what appears to be the worst time!
