“The risk is not only excessive valuations however a panic unwind of passive funding the place all people owns the identical shares,” mentioned Wood in his weekly e-newsletter, Greed & Concern.
He mentioned April 2-when Donald Trump introduced the imposition of tariffs on imports into the US-is an ‘impoverishment’ day, not a ‘liberation’ day, as termed by President Trump. On Thursday, Wall Avenue posted its worst day since 2020 in response to the announcement of worldwide tariffs the earlier night time.
“Tariff hikes are plain dangerous information because the historic precedent of the Smoot-Hawley Tariff Act of 1930 highlights,” mentioned Wood. “Additionally it is very important that the US greenback is weakening, which is the other of what the likes of Stephen Miran, chairman of the Council of Financial Advisers, would have anticipated.”
Wood mentioned Elon Musk leaving the US authorities in late Could is a ‘detrimental’.
“It’s changing into ever extra obvious that the second Trump administration is lacking an individual on the economic system to curb a few of Donald Trump’s extra excessive instincts, most significantly when they’re pushed by the notion that commerce is a zero-sum recreation,” he mentioned. “This was the function extraordinarily nicely performed by former Treasury Secretary Steven Mnuchin within the first Trump administration. Sadly, there seems to be a vacuum on this administration.”
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