From the desks of Stanley Katz & Lauren Madera
HOLY COW! ~ HARRY CARAY
The three major U.S. stock market indices suffered dramatic losses this week (i.e., DJIA: -7.86%, S&P 500: -9.08%, Nasdaq: -10.02%), delivering the most severe market correction since the pandemic era as President Trump’s sweeping tariff announcement sent shockwaves through global markets. On April 2nd, the administration implemented what J.P. Morgan called “the most significant tariff action in a century,” imposing a minimum 10% universal tariff on all U.S. imports plus additional country-specific duties that bring the effective average rate to approximately 25%. The market reaction was immediate and severe. Technology stocks bore the brunt of the selling pressure, especially those with manufacturing concentrated in highly-targeted countries like China (34% tariff) and Vietnam (46% tariff).
The global implications of this policy shift are profound and far-reaching. The European Union, China, Canada, and Mexico are all formulating responses after being targeted with country-specific tariffs. Trading partners have already vowed to retaliate despite Treasury Secretary Bessent’s warning that doing so would lead to further escalation. James Investment Research notes, “the risk of a sentiment-driven recession represents a particularly challenging scenario for policymakers.” The Federal Reserve now faces a difficult balancing act as tariffs simultaneously threaten growth and reignite inflation. Bond markets have already begun pricing in additional rate cuts to counter economic weakness even as Fed models suggest tariffs could add as much as 1.5% to consumer inflation this year. From an investment perspective, sectors less vulnerable to import disruption and companies with strong pricing power may weather the storm better than others.
Below are links to a number of third-party research reports that we have read and analyzed over the past week. We hope you will find the information interesting, useful, and worthwhile.
J.P. Morgan Asset Management:
James Investment Research:
Invesco:
Argus:
BlackRock:
Stanley Katz & Lauren Madera, Financial Advisors
ClientFirst Financial Strategies, Inc.
937-293-5500
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