Business/Markets/Stocks/Economics Random, Random

[Suliso]

Dow Jones is up 79% over five years and thus broader American stock market still a good place to invest. So far at least.

[ti-amie]

Stocks Fall Further on Trump’s Latest Tariff Talk
The S&P 500 is nearly 10 percent below its mid-February record — approaching a symbolic milestone known on Wall Street as a correction.

By Joe RennisonRiver Akira DavisDaisuke Wakabayashi and Danielle Kaye
Joe Rennison and Danielle Kaye reported from New York, River Akira Davis from Tokyo, and Daisuke Wakabayashi from Seoul.

Published March 10, 2025
Updated March 11, 2025, 5:15 p.m. ET

Markets whipsawed on Tuesday, as investors puzzled through President Trump’s commitment to tariffs, with stocks dropping in early trading before recovering late in the day.

The S&P 500 index fell 1.5 percent at its low point before recovering some ground and ending the day 0.8 percent lower. Recent waves of selling have left the S&P 500 nearly 10 percent below its mid-February record. Falling more than 10 percent would signify a symbolic milestone known on Wall Street as a correction.

Tuesday’s stock swoon followed Mr. Trump’s new threats of steep tariffs against Canada, with markets moderating hours later after a Canadian official said a delegation would head to Washington soon to lower the tension between the two countries.

The tech-heavy Nasdaq Composite index wavered between gains and losses, closing 0.2 percent lower after a 4 percent drop on Monday. The Nasdaq is already in correction.

Investors are struggling to understand the administration’s messaging on tariffs. Having previously thought Mr. Trump’s more extreme tariff threats were mostly a negotiating tool, investors are starting to worry that they may have been too blasé about the risks inherent in his strategy.

“Over the coming weeks, we expect further volatility and potential weakness in equity markets,” analysts at the Swiss bank UBS noted on Tuesday.

On Tuesday, Mr. Trump said he would double the planned tariff on steel and aluminum imported from Canada, to 50 percent, set to go into effect on Wednesday. After the close of trading, the White House walked back that threat. Mr. Trump also said that if Canada did not lower its levies on trade with the United States, he would set tariffs on cars from Canada so high that they would “permanently shut down” the Canadian car industry.

The shares of Ford Motor and Stellantis both fell. General Motors’ share price recovered late in the day to trade slightly higher.

Later in the day, Doug Ford, Ontario’s premier, said that Commerce Secretary Howard Lutnick had extended “an olive branch” to Canada, and that a Canadian delegation would head to Washington within the next day or two.

Mounting fears about the impact on economic growth appear to outweigh worries that tariffs could reignite inflation, reflected in falling government bond yields. Investors are also contending with the possibility of a government shutdown this week and additional tariffs put in place next month.

UBS joined others in raising the odds of a severe economic downturn later this year, but it noted that this was still not its expected outcome. “Our base case remains that the Trump administration’s aggressive stance on trade will weigh on growth, but not so much as to drive the U.S. into recession,” the UBS analysts said.

Airline stocks also wobbled on Tuesday after Delta Air Lines and American Airlines issued warnings about a worsening economy. Delta said late on Monday that it had cut its profit forecast for the first three months of the year, saying that rising concern among consumers was denting demand for air travel. American echoed those concerns early on Tuesday, noting that “softness in the domestic leisure segment” would result in a bigger loss this quarter than previously expected.

Delta’s shares fell more than 7 percent, while American’s dropped more than 8 percent. Airlines in Europe, like Germany’s Lufthansa and the parent of British Airways, and in Asia, like Korean Air, also posted declines.

Investors have become increasingly cautious in recent weeks as Mr. Trump has flip-flopped on tariffs, causing confusion and uncertainty.

Mr. Trump downplayed concerns over the jittery stock market on Tuesday, telling reporters in the afternoon that “markets are going to go up and they’re going to go down, but, you know what, we have to rebuild our country.”

The comments were a sharp shift from the president’s first term, when he consistently pointed to the stock market as a barometer of his success, and through Joseph R. Biden Jr.’s presidency, when Mr. Trump cherry-picked stock market moves to criticize his rival.

While current economic data has remained robust, surveys of consumers, business leaders and economists are growing pessimistic. Analysts at JPMorgan Chase now say there is a 40 percent chance for a global recession.

“The focus will remain on the broader economic concern that spurred yesterday’s huge risk-off trade,” John Canavan, the lead U.S. analyst at Oxford Economics, said in a note on Tuesday.

Analysts pointed to Mr. Trump’s refusal to rule out a recession in an interview broadcast on Sunday, when he stated that the economy was undergoing “a period of transition.” The Trump administration has offered little to assuage investors’ fears, continuing to drive a hard line on tariffs on the major U.S. trading partners Canada, Mexico and China.

In a research note on Tuesday, Takahide Kiuchi, executive economist at Nomura Research Institute, said financial markets had been caught off guard by Mr. Trump’s “unwavering” commitment to push ahead with tariffs despite the economic pain that it might cause.

“Even if the tariffs lead to inflation and economic deterioration, President Trump is likely to place the blame squarely on former President Biden rather than acknowledge any shortcomings in his own economic policies,” Mr. Kiuchi wrote.

In a recent note, Goldman Sachs said the stocks making up the main equity indexes in Taiwan, South Korea and Japan would be the most exposed in Asia if the Trump administration imposed a universal tariff on trading partners.

Technology shares declined in Japan on Tuesday, with Sony, SoftBank, Hitachi and Fujitsu each falling more than 2 percent. The chip giant Taiwan Semiconductor Manufacturing Corporation and the Apple supplier Foxconn were both down more than 2 percent.

Shares of the Japanese automaker Toyota Motor fell nearly 3 percent, while the South Korean automaker Hyundai Motor dipped slightly. Japanese and South Korean automakers are expected to be particularly damaged by a potential 25 percent tariff on foreign cars that Mr. Trump has indicated could take effect as soon as April 2.

Bruce Pang, an adjunct associate professor at the Chinese University of Hong Kong business school, said Chinese markets were moving out of step with the United States and other global counterparts. Chinese shares are getting a lift from the government’s ambitious target of around 5 percent growth and recent business-friendly comments about supporting the private sector and entrepreneurship from top leaders.

“These factors collectively help mitigate the headwinds arising from the Trump administration’s news flows,” he said.

In the year to date, shares of Chinese companies listed on the Hong Kong Stock Exchange have risen about 20 percent, compared with a 4 percent slide on the S&P 500.

https://www.nytimes.com/2025/03/10/busi ... trump.html

[ti-amie]

Carl Quintanilla‬ ‪@carlquintanilla.bsky.social‬
·
57s
WSJ EDITORIAL BOARD: “.. We said from the beginning that this North American trade war is the dumbest in history, and we were being kind.”

@wsj.com

www.wsj.com/opinion/dona...

[ponchi101]

Dow Jones is up 79% over five years and thus broader American stock market still a good place to invest. So far at least.

I wonder who was president during that time.
Agree. Investment is still a good choice. But right now, I would perhaps put investing in the US on hold. These policies are too erratic, which is what markets hate. They like boring, so their calculations can work out according to theory.
And you have to admit that Trump is as irrational a president as can be.

[Suliso]

Not so sure. Investing now for a 10 year return might still be a good bet. No 99%+ guarantee, bit which alternative would provide that?

[ponchi101]

You are correct. But the markets nowadays don't think that way. If you are looking at 10 years from now, your stock broker has nothing for you. Markets keep looking at smaller and smaller time frames for a return on their investment.
That is the reason why a one day drop makes so much news, when in reality, a drop of 1% in one day is easily explained by statistical fluctuations alone. But the pundits on TV need to have their soundbite.

[Suliso]

My own rather modest investments are in diversified Swiss fund aggregates. They are doing fine and most likely I won't touch them till ready to retire a bit more than 15 years from now. Of course I'm not making huge profits, but that you could only do by taking lots of risk on individual stocks or crypto.

[ti-amie]

S&P 500 slides into a correction as tariffs and inflation weigh on traders
The widely followed stock index closed more than 10 percent down from last month’s record high as Trump threatened to escalate a trade war with Europe.

March 13, 2025 at 4:03 p.m. EDT Today at 4:03 p.m. EDT

By Hannah Ziegler and Aaron Gregg

The S&P 500 dropped into correction territory Thursday, sinking below an important symbolic landmark amid investor anxiety over trade policy and inflation.

The widely followed stock index closed at 5,521.52, down more than 10 percent from its record close last month. A correction is defined as a fall of at least 10 percent from a peak.

The Dow Jones Industrial Average fell more than 1 percent Thursday, while the tech-heavy Nasdaq composite index ended the trading session more than 2 percent lower.

Wall Street has been fretting about the direction of the Trump administration’s tariff policies, which have been rolled out sporadically, bewildering investors. Stocks have also been dragged lower by concerns about slower economic growth at a time when inflation still isn’t as low as policymakers would have hoped. Several prominent investment banks have said recently they think the odds of a recession are getting higher.

“It remains to be seen if all the revolutionary changes to the economy and transatlantic alliances will lead to a recession or it will lead to higher growth rates in the future,” said Chris Zaccarelli, chief investment officer for Charlotte-based Northlight Asset Management. “But in the meantime, a more cautious and risk-averse posture is warranted.”

The S&P 500 sank into correction territory Thursday afternoon after Trump threatened to escalate a trade war with the European Union by enacting a 200 percent tariff on the E.U.’s wine, champagne and other alcoholic beverages after the bloc announced it would place a 50 percent tariff on U.S. whiskey in response to Trump’s tariffs on steel and aluminum.

Trump administration officials have defended his aggressive use of tariffs despite recent market volatility and continued fears of an economic slowdown. Trump himself declined to rule out a recession during an interview Sunday, noting that it will take “a little time” before Americans will see a payoff from his policies. On Tuesday, Commerce Secretary Howard Lutnick told CBS News that Trump’s trade policy is “worth it” even if it leads to a recession.

Positive economic data this week hasn’t eased market concerns. The producer price index, which measures the cost of producing consumer goods, was flat in February, according to data released Thursday. The better-than-expected reading comes after inflation eased slightly in February, providing an unexpected signal of progress in combating high inflation. Those metrics provide a “silver lining to slowing growth,” said Adam Turnquist, chief technical strategist for LPL Financial, even as the broader market approaches “washed-out territory.”

But the outlook for inflation depends on “tariffs, deportations and DOGE” more than backward-looking economic data for February, said Bill Adams, chief economist for Comerica Investment Bank.

“In short, the other shoe hasn’t dropped yet in the economic statistics,” Adams said. “Financial markets are paying more attention to announcements from the White House about tariffs and job cuts than the hard numbers.”

Retailers are watching Trump’s tariff rollout. A slew of companies have pared their expectations for this year, predicting economic uncertainty and tariff pressure could undercut consumer spending.

Recent market routs, Adams said, have hit tech stocks especially hard — a shift for a sector that typically props up the broader market. Among the “Magnificent 7” stocks, six of them — Alphabet, Amazon, Apple, Microsoft, Nvidia and Tesla — are down 10 percent or more for the year. The lone exception, Meta, remains up slightly year-to-date.

https://www.washingtonpost.com/business ... on-stocks/

[ashkor87]

The looming budget battle..here the concept of BATNA provides a clue..who has the best alternative to a negotiated agreement here? The alternative is the government shuts down. Isn't that what Trump is anyway trying to do? The Dems have no cards really! (Caveat: I am not a citizen/voter so I don't really care, this is just academic for me!)

[ti-amie]

Dow pops more than 650 points in relief bounce Friday, but still posts worst week since 2023: Live updates
Lisa Kailai Han
Alex Harring

https://www.cnbc.com/2025/03/13/stock-m ... dates.html

[ti-amie]

[ponchi101]

Republicans will never vote based on economy issues. They don't care about them.
It doesn't matter how many times you show them the stats. They believe that the GOP is good for the economy and the dems are bad. Nothing will change that opinion.

[ashkor87]

True, the economy is such an amorphous thing, it is so hard to ascribe anything to any given policy or action..

[ponchi101]

But that is the problem. There are some patterns that are discernible enough to make the claim that it is dems that are better at handling the economy. As has been pointed out above: the GOP starts more recessions, they add more to the deficit, they create fewer jobs. It gets to the point that the end results are clear.
And people should use that data.
It is the opposite in S. America. ALL governments that are leftist end up hurting the economy more. Leftists governments in S. America are detrimental for the economies. Yet, the people vote for them believing they will be better for the economy.
Again, sometimes, drop your cognitive dissonance and look at the data.

[Suliso]

Right, but people vote for economic reasons at most 50% of the time. Cultural reasons are far more important.