S&P 500 future are down 3.7% today.
It could be worse.
One of the biggest decliners is Nike, which is down 14% after tariffs hit almost every country it manufactures in. The company reportedly has 150 factories in Vietnam and a half-million workers. No one was expecting a 46% tariff on Vietnam and it will be catastrophic to margins for the company.
There is some thinking that it can’t last. Apple is similar as with China tariffs, the cost of an iPhone would have to go to $1500 from $1000 to maintain margins.
As Dario Perkins writes:
talking to investors this morning, the tariffs were so bats*** crazy, nobody really believes them. Maybe there is a sort of Laffer curve. Very low tariffs OK, bats*** crazy tariffs also OK
Tech equity analyst Dan Ives took a similar line:
The reason we are saying this is over: in the coming 24 hours the world will quickly realize these tariff rates will never stay as they are shown otherwise it would be a self-inflicted Economic Armageddon that Trump would send the US and world through over the coming year. We have to assume this is the start of a negotiation and these rates will not hold…stocks will sell-off massively but ultimately our view is these numbers would throw the US into a clear recession and cause stagflation almost immediately…if they hold (and they will not for long, in our view).
Place your bets but my inclination based on comments from Lutnick and Trump is that they’re not considering a big U-turn.
