The opinions expressed below are my own and do not necessarily represent those of Visdom Investment Group, LLC.
Canadian tariff-talk.
President Trump announced 35% tariffs on Canada and US equity markets flinched. S&P 500 futures dropped last night about 35 points and bottomed out around 6 AM ET, down 45 points. They slowly climbed from there and the S&P opened
down about 30 points, only to lose another 20 early on. Chalk up another instance of post-open weakness for the week. As per usual, dip-buyers dip-bought and slowly repaired the damage. The S&P was only down modestly by the afternoon. Yields climbed today, significantly on the back end and 2025 Fed cuts are priced at 51 bips.
Considering the bombshell of the Canadian tariff announcement, one observes that the market is less and less influenced by these surprises. This will all work out swimmingly, if the tariffs get negotiated away quickly. What happens if they don’t?
We’ve faced these questions before and uncertainty dominated the investing landscape as a result. For tariff-talk 2.0, the uncertainty is *perceived* to be much less. I hope the wisdom of crowds prevails because if everyone gets hoodwinked on tariff-talk 2.0, it is going to be U-G-L-Y.
There’s little else to say at this point. We’re in the midst of summer trading, markets don’t want to react to much, and unless something really rocks the current narrative, things will probably be quiet and the usual trends will continue.
See you Monday, have a great weekend.
-Mike
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