Get ready, people: We’re going over the top.
The market’s recent battering has a lot of investors running for the bunkers.
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Stocks are racing toward their worst first-quarter performance in five years, having shed more than $5 trillion in value since the accelerated selloff began in mid-February.
President Donald Trump’s tariffs have proved the most significant downside driver and several banks have trimmed their forecasts for growth, inflation and corporate earnings in the past three weeks.
Goldman Sachs analysts warned that the U.S. economy faces a sharply higher risk of recession over the next 12 months, as tariffs reduce growth, stoke inflation and deepen the market’s first quarter decline
Trump said he’ll be imposing a range of fresh tariffs on imports on April 2, calling it “Liberation Day.” This includes reciprocal tariffs that would match the rates charged by other countries and account for other subsidies.
U.S. President Donald Trump says people will buy American-made cars if foreign auto makers raise their tariff-struck prices.
Andrew Harnik/Getty Images
Analyst says markets may get some clarity
“Markets closed last week and are starting this week with heavy selling, due in part to increasing uncertainty around tariffs, potential tax hikes and some economic data pointing to stagflation,” said Scott Ellis, head of fixed income at Penn Mutual.
“Over the weekend, the narrative around tariffs potentially hit peak fear and uncertainty, but markets may get some clarity on April 2,” he added.
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Trump said in an interview with NBC News that he “couldn’t care less” if foreign automakers raise their prices due to these new tariffs.
“I hope they raise their prices because if they do, people are gonna buy American-made cars,” he said.
Stocks have been tanking in light of all the tariff drama. The Dow Jones Industrial Average tumbled 715.80 points, or 1.69%, on March 28, while the S&P 500 shed 1.97% and the tech-heavy Nasdaq sank 2.7%.
The Dow was up marginally at last check, while the S&P 500 and the Nasdaq were both in the red.
If you’re looking for a theme song to accompany all this tariff turbulence, Stephen Guilfoyle suggests we look no further than “Panic Attack” by the British heavy metal band Judas Priest, which warns that “the clock is ticking down to doomsday hours.”
“What was that?” the veteran trader asked in his recent TheStreet Pro column. “Was it panic? It was close. You could smell the fear. I’ve only smelt that kind of market fear a few times in my career. Brings me back to 1987, or maybe 2008, in my head. Felt it again in 2020, but that was different. Perhaps panic, pure panic … is still to come.”
Guilfoyle, who career dates back to the floor of the New York Stock Exchange in the 1980s, saw a military aspect to all the agitation.
Veteran trader: Could be a rainbow beyond tornado
“When I enlisted in the military, conditioned as I was to what I had seen in the movies, there were three things that really surprised me,” he said.
“One, how truly loud and earth-shattering, hand grenades could be,” Guilfoyle explained. “Two, similarly, that mortars did not make a ‘thump’ sound when fired, but could make your ears bleed, and three … that unlike John Wayne in ‘The Longest Day’… everyone buckled the strap on their helmets.”
Related: Goldman Sachs analysts overhaul S&P 500, GDP targets as Trump tariffs bite
In fact, he added, “one was likely to get smacked around by one’s sergeant if one tried to walk around with an unbuckled helmet.”
Guilfoyle has some sobering advice for the investment community.
“Well, kids … I think you better cover those grapes with some kind of protective gear and buckle those chinstraps,” he said. “There may be a buying opportunity here somewhere, as there had been two weeks or so ago. That said, it’s very possible that that was an invitation to trade and not to invest.”
Guilfoyle said we would find out soon enough just how terrified portfolio managers are of this remodeling of the U.S. economy. He noted, “There very well may be a rainbow on the other side of this oncoming tornado,” and maybe even another invitation to trade offered as soon as this week.
“You well know what I try to teach at times like this,” he said. “Narrow the book. Make sure cash levels are elevated. Understand, Identify, Adapt, Overcome and Carry On. In that order. Everything done is done for a reason that one could explain to a novice. No gambling. OK, Saddle up. Full battle rattle. Let’s go….”
He advised investors to mark Liberation Day on their calendars and keep in mind that there is a plan, “and that reduced taxes as well as a deregulated corporate environment are part of it.”
“The goal here is obviously the rebuilding of the American middle class,” he said. “That would be a truly wonderful destination. Getting there might not be so wonderful.”
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
