has returned indexes to exactly where they were on Nov 4, 2024. SPY was $569 in Nov -- It is $565 right now. So the simple analysis of this "crash" is that the Trump bubble busted. Any we all know who busted it.
To me the mystery is why markets aren't lower. As the analyst in your video points out, the tariffs and the negotiations will play out and we will see what the net effect is. Things will stabilize but to me the bigger challenge for those investing in US companies is on-shoring.
On-shoring is a very expensive transition. Globalization was cheap because it did not require capex to build factories and it leveraged low wages abroad. On-shoring is just the opposite. Onshoring began around 2015 and Trump pushed it with tariffs during his first term. We know that most of the tariffs he is threatening now are not aligned with what it would take to make onshoring profitable. IOW if another country is widgets at $50 and they cost $75 to make in the USA then an effective tariff has to be above the number generated by that example --- $50 times X = $75. But DJT isn't doing that. He is throwing out round numbers and claiming they will apply to all imports from a given country. Then he rolls it back a little and says "all except A. B and C" then he moves the deadline.
More interesting to me as we go into these uncharted waters is how much interest rates will be cut and when. If the federal government really does cut $1T in spending then the US economy contracts by that much plus the knock on effects. That would kill inflation. But while the prices of many things will go down or already are -- hotel rooms, rents, gasoline, food that can't be exported due to reciprocal tariffs, etc, other things will go up -- steel, lumber, insurance, some wages.
The market found a floor last week as retail investors had sold almost everything they were inclined to sell. But 85%+ of the market is institutional and they stopped selling. They are now hedging in case the 4/2 tariffs don't happen or a rate cut comes early.
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