Tariff Turbulence

Fresh news and strategies for traders. SPY Trader episode #1068. Hey everyone, it's your pal Wally Pip here, back with another edition of Spy Trader! It's 12 pm on Thursday, April 3rd, 2025, and things are looking a little…spicy in the market today. Fasten your seatbelts, folks, because we're diving headfirst into some choppy waters. Why did the market analyst go on a diet? He needed to reduce his bonds! So, here's the deal: today the market's taking a nosedive, and we can mainly thank President Trump's new tariffs for the turbulence. The Dow, the S&P 500, the Nasdaq – they're all feeling the pain, and some folks are saying this could be the worst day since 2020. It's not just a US problem either; global markets are feeling the heat too. Now, let's break down what's happening. The tech sector is getting hammered, especially those big names like Apple, Nvidia and Tesla. Sectors that depend on international trade or overseas production are also struggling. Think metals, mining, retail that manufactures overseas, and semiconductors. Pharma seems to be a possible exception to the rule, but that remains to be seen. And get this: Consumer Discretionary is up, while Consumer Staples are down, go figure! Trump's throwing a wrench in the gears with these tariffs. We're talking a baseline 10% on all imports, with even higher tariffs aimed at specific countries. He's calling them 'Liberation Day' tariffs, starting April 5th, and experts are worried about retaliation, higher inflation, and a slower economy. Seems like India might be okay though, relatively speaking, because of lower tariff rates. Speaking of the economy, these tariffs are sparking recession fears. Some economists are even predicting negative GDP growth in the first half of 2025. The US trade deficit is surging, which is the opposite of what the tariffs were supposed to do. There's even chatter about the Fed potentially cutting rates sooner than planned if things get worse. It's a whole mess of uncertainty out there. Companywise, RH, formerly known as Restoration Hardware, is tanking because of a weak housing market outlook. Stellantis, the carmaker, is announcing temporary layoffs linked to the tariffs. On the M&A front, Amazon and AppLovin are apparently battling it out to buy TikTok. So, what do we do in all this craziness? First, stay calm! Market corrections are normal, so don't panic sell. Stick to your longterm investment plans. Review and rebalance your portfolio to match your risk tolerance. Diversification is your friend right now. Be careful with those sectors heavily impacted by tariffs. Look for potential opportunities in sectors that are less affected. Some folks might consider moving some money into safe havens like US Treasury bonds or gold. Bottom line: keep a close eye on the situation and adjust your strategy as needed. And as always, if you're feeling lost, talk to a financial advisor. That's all for today, folks! Stay safe out there, and I'll catch you on the next Spy Trader!