Tariffs, Schmariffs! Why some Wall Street power players arent worried about stocks
They are lonely souls, but there remains a power contingent of Wall Street executives and wealth managers who are telling their clients to ignore the noise.Their message: The US economy is just fine.The market will work through its current puke and reach new highs before the end of the year.
In other words, Tariffs, Schmariffs!I’m not saying I agree with that sentiment – there are powerful indicators that just the opposite is likely to happen.A significant rally in the bond market foreshadows an economic slowdown, which is considered good for bonds because recession usually accompanies lower inflation. Investors generally hate tariffs because they lead to slowdowns when countries respond with tariffs on US goods.
A top hedge fund manager – with around $12 billion in assets under management — described the market mood as “pretty bad.”Here’s why: Trump won’t shut up about tariffs.Yes, this week’s inflation read was better than expected but unpack its implications.
The CPI was down at 2.8% and its core rate – minus volatile food and energy costs — is the lowest in four years.That suggests consumers aren’t spending in anticipation of bad stuff to come.
The closely watched Producer Price Index similarly showed lower inflation.And yet one of my top sources at UBS says the big brokerage house is predicting a 1,000-plus-point rise in the S&P by the end of the year to 6,600.Pimco, the big asset manager that focuses on bonds, is telling clients there is just a 35% chance of recession.
Veteran tech analyst Dan Ives said in a report that he remains “firmly bullish,” on the tech-stock sector, which has taken some of the biggest hits of late.He believes “tech stocks will ultimately make new all-time highs during the second half of 2025 despite a disaster panicked sell-off to start the year.”Tariffs have a history of igniting economic gloom.
Economists believe they were the root of the Great Depression.After the 1929 crash, Congress pas...