Tariff Terrorists Strike

In my nearly 3 decades in this business this has to rate as one of the worst weeks that I can remember. The S&P 500 lost 507 points or 9.08%, The NASDAQ managed an official correction in just one week falling 1,735 points or 10.02%, while the DOW lost 3,269 points or 7.86%. As the Tariff Terrorists put an exclamation point on a bruising week. Year to date the Tariff Terrorists have sent the major averages deep into the red with the S&P 500 down 13.73%, The NASDAQ has given up 19.28% nearly an official correction, While the DOW is down 9.94%.

Liberation Day?

Trumps Liberation Day Tariffs are widely panned as the culprit for this week’s market meltdown. With the mainstream media devoting the lions share of its coverage to their supposedly Armageddon inducing qualities. Taking a hard look at the numbers shows us that the much hyped reciprocal tariff program was actually half. Another interesting fact that appeared was the comparison of tariffs charged by other countries compared to what we now charge them. Highly skewed comes to mind, as does predatory and number of other concepts. It is hard to argue with president Trumps claim that the rest of the world has been ripping us of for a very long time.
As the list below shows.

While the mainstream media won’t present a balanced argument, imagine my shock. A quick look at the table above tells you who the real tariff terrorists are. It isn’t the good ol’US of A. Other things that come to mind include. No wonder our manufacturing base has been decimated, with the byproduct of an affordability crisis as one of the unintended consequences. Interestingly enough if a person takes the time to search the video archives there are numerous clips of Nancy Pelosi, Bernie Sanders, Chuck Schumer and many others warning in the late 80’s that free trade without tariffs would decimate our industrial heartland. Remember NAFTA and the giant sucking sound? My how things change.

What About Valuations?

A significant concern at the beginning of the year. After blow out 4^th quarter earnings and this weeks drubbing. It’s a safe bet that they have fallen sharply as the chart below shows. Compliments of Bloomberg.

After the Nasdaq 100’s worst quarter in years was followed by a week that produced an official correction with a 10%+ decline to kick of the 2^nd quarter.

A Stake Through The Heart Of The Markets?

Or an over reaction exacerbated by non-stop negative mainstream media coverage pushing an agenda? It is extremely hard to deny the existence of a mainstream media agenda at this point. In all fairness a sober look at this week’s tariff developments reveals the following.

• The rest of the world, and in particular our major trading partners were in fact ripping us off as Trump asserted.
• Even with the Liberation Day tariffs announced this week America’s reciprocal tariffs remain by and large half of what other nations charge us.
• A number of significant trading partners have already announced a willingness to negotiate. China being a major exception as they announced tit for tat tariffs. Will see how long it lasts.
• The hollowing out of our manufacturing base has indeed created a national security risk as we no longer manufacture much of what we need.
• The history of closed factories in America is well documented. As is the decimation of the middle-class. The affordability crisis that has emerged recently as well.
• While our trade deficits have seen us as a nation export our wealth accumulated over generations, and replace it with debt currently 36-trillion Dollars and counting.
• It is long past time to do something. Despite the sensationalistic headlines. Tariffs are a good start especially in light of the tariffs currently being levied against the US. By our trading partners and in many cases allies as well.

Please hit the like and share buttons. Have a great weekend, I’ll be back next Friday.

Last Week’s Post: Liberation Day

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