Instant Reaction: Trump Tariffs Trigger Stock Market Meltdown

Bloomberg Audio Studios, podcasts, radio News. 0:00:09.200 --> 0:00:13.840 This is a breaking news update from Bloomberg instant reaction 0:00:14.120 --> 0:00:17.919 and analysis from our three thousand journalists and analysts around 0:00:18.000 --> 0:00:18.480 the world. 0:00:19.720 --> 0:00:23.759 Almost nothing was spared here on this Thursday afternoon, the 0:00:23.800 --> 0:00:26.840 first full day of trading. Once we learned about the 0:00:26.920 --> 0:00:30.639 new US tariff regime, an SMP five hundred that is 0:00:30.640 --> 0:00:33.040 going to pose the day lower by about four point 0:00:33.080 --> 0:00:35.720 eight percent. That's the worst day for the index going 0:00:35.760 --> 0:00:38.680 back to June of twenty twenty. It pushes the S 0:00:38.760 --> 0:00:42.280 and P five hundred back into correction territory down twelve 0:00:42.280 --> 0:00:44.720 percent from its all time high fifty three ninety six, 0:00:44.960 --> 0:00:47.000 and change is where it settles. On the day. The 0:00:47.080 --> 0:00:51.280 Dow Jo's Industrial average lost more than sixteen hundred points 0:00:51.479 --> 0:00:54.800 on the day, taking it down by four percent on 0:00:54.880 --> 0:00:58.040 the day. The Nazak composite down one thousand points or 0:00:58.080 --> 0:01:01.080 six percent, the Nazak one hundred down a thousand points 0:01:01.200 --> 0:01:04.040 or five point four percent, the Russell two thousand down 0:01:04.080 --> 0:01:06.880 more than one hundred points or seven percent, s and 0:01:06.920 --> 0:01:10.600 P four hundred mid caps down seven percent down, transports 0:01:10.760 --> 0:01:13.880 down nine percent. And I know, Alex you like to 0:01:13.880 --> 0:01:17.080 look at the equal weighted index that was underperformer relative 0:01:17.120 --> 0:01:19.000 to the S ANDP down four point a pers. 0:01:19.000 --> 0:01:22.920 I'm just tech, yeah, yeah, just across the board. Unbelievable. 0:01:23.160 --> 0:01:25.520 I don't even know that I should even mention how 0:01:25.560 --> 0:01:26.920 many year down in the S and P, but I'll 0:01:26.959 --> 0:01:29.959 go there. You got four hundred and seven names losing ground. 0:01:30.400 --> 0:01:33.119 You do have ninety five names to mention, some hitting 0:01:33.120 --> 0:01:35.040 fifty two week highs in the S and P, but 0:01:35.160 --> 0:01:37.399 ninety five names alex higher in the S and P 0:01:37.520 --> 0:01:38.280 five hundred yep. 0:01:38.319 --> 0:01:42.039 Taking a look that IMAM function really crystallizes the move 0:01:42.080 --> 0:01:45.080 that we're seeing within the equity market today. All sectors 0:01:45.120 --> 0:01:47.319 in the red except for consumer staples, as we just 0:01:47.360 --> 0:01:49.279 talked about, those are the kind of the only gainers, 0:01:49.280 --> 0:01:52.960 some hitting fifty two week highs, but energy, tech, discretionary, 0:01:53.040 --> 0:01:57.000 and industrials and financials all getting hit extraordinarily hard. Energy 0:01:57.040 --> 0:01:59.520 sectors off by over seven percent. 0:01:59.400 --> 0:02:02.280 And just to to those superlatives, a KBW Bank index 0:02:02.360 --> 0:02:05.000 down ten percent, the biggest drop going back to March 0:02:05.000 --> 0:02:08.640 of twenty twenty three. The Philadelphia Semiconductor Index Carol and 0:02:08.680 --> 0:02:11.680 TIM had their worst day since March of twenty twenty, 0:02:11.880 --> 0:02:13.360 down nine point nine percent. 0:02:13.160 --> 0:02:15.720 YEP dollar wiping all of its gains out since the 0:02:15.760 --> 0:02:18.960 president's win on November fifth, that election win. So yeah, 0:02:19.000 --> 0:02:21.520 a lot of superlatives, no doubt about it. On this Thursday, 0:02:22.120 --> 0:02:24.280 I actually found some gainers, guys, and let's go to it. 0:02:24.320 --> 0:02:27.040 We were talking about certainly the consumer staples area, which 0:02:27.080 --> 0:02:31.079 was an outperformer easily the group overall. Coca Cola among 0:02:31.160 --> 0:02:35.200 that list, up two point six percent here in today's session, 0:02:35.240 --> 0:02:39.040 so that was gaining. Another consumer staples Philip Morris, that 0:02:39.080 --> 0:02:42.000 one was up just shy of four percent here at 0:02:42.000 --> 0:02:45.120 the close. And then actually some fundamental reasons or at 0:02:45.160 --> 0:02:48.480 least something that could possibly change maybe the outlook for Intel. 0:02:48.760 --> 0:02:51.400 This one up at its highs almost nine percent today, 0:02:51.400 --> 0:02:53.960 finishing with about a two percent gain at the close. 0:02:54.000 --> 0:02:57.440 The information coming out and reported that the company tentatively 0:02:57.520 --> 0:03:01.200 agreed to a chip making joint venture with TSMC Taiwan 0:03:01.280 --> 0:03:05.080 Semiconductor Manufacturing. Bloomberg News, you might remember back in February 0:03:05.120 --> 0:03:07.640 reported that the companies were talking about the idea at 0:03:07.639 --> 0:03:10.800 the request of the Trump administration. And in this one, 0:03:11.160 --> 0:03:13.000 the number one gainer in the S and P five 0:03:13.080 --> 0:03:17.079 hundred French fries YEP gotta love it. LAMB Weston Holdings 0:03:17.160 --> 0:03:20.720 up ten percent here at the close. The company came 0:03:20.760 --> 0:03:24.320 out and it posted fiscal third quarter results top estimates, 0:03:24.360 --> 0:03:26.360 and the management hired a consulting firm to look for 0:03:26.400 --> 0:03:29.600 cost saving. So even in a sell off, guys, fundamentals 0:03:29.919 --> 0:03:31.200 still do matter. 0:03:31.240 --> 0:03:32.960 And can I just add an honorable mention to there, 0:03:32.960 --> 0:03:36.400 and is actually on a sec on a country basis, please, Actually, 0:03:36.440 --> 0:03:39.040 one of the Mexico's main benchmark index actually had stage 0:03:39.080 --> 0:03:41.320 a pretty decent rally earlier in the day. It ended 0:03:41.400 --> 0:03:43.000 up flat on the day, and you actually saw some 0:03:43.080 --> 0:03:46.480 Indicas in Canada rally largely because of the fact that 0:03:46.600 --> 0:03:49.800 they did not get the worst of those reciprocal terists, 0:03:49.840 --> 0:03:51.840 if you will, that Trump laid out yesterday. 0:03:52.200 --> 0:03:54.320 All right, well, let's go to some of the decliners. 0:03:54.320 --> 0:03:56.760 I had the easy job today, and in fact, there 0:03:56.760 --> 0:03:59.160 were so many decliners. I went with an entire index, 0:03:59.200 --> 0:04:02.240 the Bloomberg mag seven Total Return index following dated by 0:04:02.280 --> 0:04:05.200 six point seven percent. It's worst day in more than 0:04:05.240 --> 0:04:07.800 three years. Everything in there in the red. Apple down 0:04:07.840 --> 0:04:10.800 more than nine percent, Amazon and meta platforms down nine percent, 0:04:10.800 --> 0:04:14.080 and video down close to eight eight percent. Tesla down 0:04:14.280 --> 0:04:16.719 six five and a half percent, Alphabet down four percent, 0:04:16.800 --> 0:04:20.679 Microsoft down two point four percent, all the biggest weights 0:04:20.680 --> 0:04:23.200 on the major indices and all among the most actively 0:04:23.240 --> 0:04:26.840 traded stocks today. Also did want to focus on retail 0:04:26.839 --> 0:04:29.440 today because we saw some deep, deep moves there, Nike 0:04:29.520 --> 0:04:31.800 following by fourteen point four percent. In fact, it's now 0:04:31.839 --> 0:04:34.040 trading at the lowest level going all the way back 0:04:34.040 --> 0:04:37.480 to twenty seventeen. It was among the US and European sneaker, 0:04:37.520 --> 0:04:40.120 clothing and jewelry makers that plunged amid this shock to 0:04:40.160 --> 0:04:44.200 supply chains. Vietnam is the issue for Nike. It's the 0:04:44.240 --> 0:04:47.240 largest supplier of footwear for Nike. Today half of Nike 0:04:47.320 --> 0:04:50.440 branch shoes are made in Vietnam. Nike also faces additional 0:04:50.480 --> 0:04:52.680 challenges because it's so dominant in the US, which is 0:04:52.680 --> 0:04:57.000 the world's biggest single sports market. And finally, another retailer, 0:04:57.160 --> 0:05:00.560 RH plunging the worst day ever the owned company of 0:05:00.600 --> 0:05:03.320 Restoration Hardware. They plunged as much as forty five percent, 0:05:03.760 --> 0:05:06.560 a record declined. This after the annual revenue growth forecast 0:05:06.560 --> 0:05:10.320 trailed Wall Street expectations. Fourth quarter sales and profit also 0:05:10.400 --> 0:05:14.000 missed the average analyst estimate. Trading now at levels last 0:05:14.040 --> 0:05:17.000 seen in twenty twenty, shares falling today by more than 0:05:17.000 --> 0:05:17.640 forty percent. 0:05:17.800 --> 0:05:19.359 Where do you go. You go to lam Weston and 0:05:19.400 --> 0:05:21.599 you also go to the bond market. It was the 0:05:21.640 --> 0:05:24.280 front end that really outperformed here. The two year yield 0:05:24.279 --> 0:05:26.680 at one point was down by about seventeen basis points. 0:05:26.920 --> 0:05:29.320 It fell the most since August of twenty twenty four, 0:05:29.600 --> 0:05:32.680 and we're now at the lowest level since October, so 0:05:32.800 --> 0:05:35.240 before the election. But overall, guys, we're looking at a 0:05:35.279 --> 0:05:37.320 twenty one basis point moved to the downside for the 0:05:37.360 --> 0:05:40.159 two year in just these four days alone, not even 0:05:40.520 --> 0:05:42.960 taking into account we're going to see tomorrow with the 0:05:43.040 --> 0:05:43.560 jobs number. 0:05:43.720 --> 0:05:45.440 It was interesting too if you were looking for any 0:05:45.440 --> 0:05:47.240 bright spots, I mean, I'll leak you saw a lot 0:05:47.240 --> 0:05:50.240 of healthcare stocks move higher. Of course, again that defensive trade. 0:05:50.279 --> 0:05:52.360 In fact, that managed Healthcare index, the one that tracks 0:05:52.360 --> 0:05:54.680 the ones in the smb I, had a really good day. 0:05:54.839 --> 0:05:56.680 And it gets to that question as to if you 0:05:56.720 --> 0:05:58.800 do want to stay invested, you want to keep that 0:05:58.880 --> 0:06:01.440 money there you go, I mean, is there a safe 0:06:01.440 --> 0:06:03.640 spot out there right now other than you know, consumer 0:06:03.680 --> 0:06:04.599 staples and healthcare? 0:06:04.720 --> 0:06:05.080 I don't know. 0:06:05.120 --> 0:06:07.119 It's a good question, right, And I also do wonder 0:06:07.200 --> 0:06:09.320 if you do move that money at this point, you know, 0:06:09.400 --> 0:06:11.120 with what's certain, dear, what will it take for you 0:06:11.160 --> 0:06:15.559 to get more actively back into the market at some point. Certainly, again, 0:06:15.640 --> 0:06:17.560 you go back to so much coming out of the 0:06:17.560 --> 0:06:20.039 White House, so much coming out of Washington, and we 0:06:20.120 --> 0:06:22.359 know that this stuff can change, and so when do 0:06:22.400 --> 0:06:24.919 you believe that, Okay, this is the policy, this is 0:06:24.920 --> 0:06:26.920 what stays in place. And I think that's what's going 0:06:26.960 --> 0:06:29.839 to continue to make it tricky, certainly for investors in businesses. 0:06:29.960 --> 0:06:31.839 I just add though too, I'm sorry to interrupt, but 0:06:31.880 --> 0:06:33.760 just on the consumer staples front, because I think a 0:06:33.760 --> 0:06:36.159 lot of people were flocking there. You saw the rally 0:06:36.160 --> 0:06:37.640 and Pepsi and some of those names. But then you 0:06:37.680 --> 0:06:40.960 have the CEO of ConAgra was talking a little bit 0:06:41.000 --> 0:06:44.280 earlier today who really talked about how he's concerned. He said, 0:06:44.480 --> 0:06:46.320 right now, they're not being hurt. Right now, they don't 0:06:46.360 --> 0:06:48.440 have to make a lot of changes. But he basically 0:06:48.440 --> 0:06:50.600 said that you know, once the dust starts to settle here, 0:06:51.160 --> 0:06:53.080 you know, things may not look good. And he actually 0:06:53.080 --> 0:06:55.359 talked about this idea of not really being able to 0:06:55.360 --> 0:06:57.520 give firmer guidance, and that might be the story of 0:06:57.560 --> 0:07:00.440 this earning season which really kicks off and in just 0:07:00.480 --> 0:07:01.720 about the four or five days. 0:07:01.800 --> 0:07:04.320 Yeah, we'll certainly look forward to hearing from the executives 0:07:04.320 --> 0:07:06.719 of those companies and certainly the commentary from the banks 0:07:06.720 --> 0:07:09.480 about how consumers are doing in the meantime. Romayne, in 0:07:09.480 --> 0:07:11.720 your question about where actually to invest your money is 0:07:11.720 --> 0:07:14.360 a question we've been posing to our guests throughout the day. 0:07:14.600 --> 0:07:17.800 We did speak to Mace McCain over at Frost Advisors, 0:07:18.040 --> 0:07:21.560 who's actually not buying the trade of going to Europe 0:07:21.640 --> 0:07:23.360 right now. He thinks that's going to end very soon 0:07:23.400 --> 0:07:26.360 and it's going to end poorly. He's sticking with US companies, 0:07:26.360 --> 0:07:30.400 but midcaps because they have less exposure to international markets. 0:07:30.560 --> 0:07:32.560 He's still bullish on the US in the long run. 0:07:32.600 --> 0:07:35.400 But does that take into account economic slowdown though? 0:07:35.760 --> 0:07:38.480 Yeah, I mean, look, he's staying invested right now. He's 0:07:38.480 --> 0:07:41.360 getting a lot of calls from clients. They're obviously very concerned. 0:07:41.360 --> 0:07:43.840 They want explanations of what's happening to the market. But 0:07:43.880 --> 0:07:44.760 he's staying invested. 0:07:45.320 --> 0:07:47.920 Well, here's my thing too. And then in the short term, though, 0:07:47.960 --> 0:07:49.360 I wonder if we're going to see a lot more 0:07:49.440 --> 0:07:52.360 downside in that. When you have volatility spikes like this 0:07:52.440 --> 0:07:55.480 guy so and we're up to nearly thirty for the vics, 0:07:55.760 --> 0:07:58.480 you have funds that rebalance. Whether you're looking at ETPs 0:07:58.520 --> 0:08:01.480 or etns, or whether you're looking at say CTA's commodity 0:08:01.760 --> 0:08:04.880 trading advisors, or you're looking at volatility funds. They have 0:08:04.960 --> 0:08:08.480 to rebalance when volatility spikes and they have to sell stocks. 0:08:08.600 --> 0:08:11.960 That's on a long term call, right, but that churn 0:08:12.200 --> 0:08:14.160 could continue through the next couple of days and they're 0:08:14.200 --> 0:08:15.640 forced to kind of rebalance here. 0:08:15.720 --> 0:08:18.000 Actually, we put that question to Peter at Order over 0:08:18.040 --> 0:08:20.200 at William and Mary. You know, he's worked on Wall Street, 0:08:20.200 --> 0:08:23.000 he's now an academia, runs his own investment firm as well. 0:08:23.400 --> 0:08:25.840 And we said, you know, especially with the S and 0:08:25.880 --> 0:08:29.680 P five hundred from peak to trough down more than 0:08:30.240 --> 0:08:32.840 ten percent? Was it of almost twelve percent? So was 0:08:32.840 --> 0:08:34.760 this a bear market? Could it go lower? And his 0:08:34.880 --> 0:08:37.840 expectation was that, yeah, he thought things could actually go 0:08:37.880 --> 0:08:40.520 lower from here. So I think that's a really good point. 0:08:40.840 --> 0:08:43.000 You know, have we bottomed out? And that's the question, 0:08:43.520 --> 0:08:50.800 all right, Dot that dot