00:00 Speaker A
this exact moment in the market with standing, it seems like the tumult is nowhere near the end even with this 90-day pause.
00:07 Speaker B
You guys just played a mash-up of I think five or six guests and basically none of them had anything positive to say about where the tariff story has gone in the last week, right? So I think that’s just the reality of where we’re at here, right? So if you look at something just simply like the effective US tariff rate, right? That was at Yale Budget Lab has been doing great estimations on this. Ernie Tedeschi over there has been following it minute by minute. They were at 22 and a half percent, still your highest level and basically a century. And that was after liberation day on April 2nd, you come to now, the effective US tariff rate has only gone up in the last week. We took tariffs from other countries and essentially just put them on China. The amount that the US is actually tariffing countries has only gone up. It’s now at 27%. So I think the reality is that story just isn’t going anywhere, right? And I was speaking to BNP chief economist James Eagle Hoff yesterday and he was sort of saying, well, the 90-day pause is also an issue too, right? When you think about the fact that if the uncertainty has been sort of the central problem here, what does a 90-day pause do for businesses? Probably nothing, right? Now you’re still you’ve just extended the uncertainty window. Now you have 90 more days where you’re wondering, do I need to move where I’m sourcing goods from? How do I operate my business? And so you’re just extending that period longer, and I think that’s why you end up with calls like you saw from B of A’s Michael Hartnett today, which basically said until the trade war settles down, I don’t feel
00:14 Speaker C
good about stocks here.
00:16 Speaker B
And I think that’s basically what you’re seeing in the market.
00:18 Speaker C
I mean, we we can’t stress that enough, like we’ve gone from people saying, hey, buy the dips to hey, no, no, no, no, sell the rally. Like just how quickly of a pivot that that that’s also been made essentially because when we started off this year, it was all right, these valuations, they need to come down a little bit, look for more ripe opportunities to come in when valuations do compress a little bit more. You got that. But then we had the initiation of the trade standoff and then valuations, it didn’t become the main story. It became, okay, now there’s so much uncertainty, the valuation reset almost doesn’t even matter. It just more so matters that you’re well diversified in whatever is going to play out in this next.
00:21 Speaker B
Right, Brad, and I think the other thing that we came into this year with too is we felt like the economy was or consensus felt like the US economy was probably going to grow above 2% again, right? Now you’re moving to consensus probably coming closer to it’s definitely below 2%. You’re seeing a lot of economists talk about below 1%. Some economists are talking about recession. That’s a call that JP Morgan has made. That’s a call that Neil Dutta at RenMac has made. And so I I think you start to just piece these things together and the overall story just is not that good right now, and the question is still how much worse will it get, not necessarily how much better is it going to get. And so that puts you in a position where you just don’t feel that comfortable getting into the market there. And the other thing I would add with that is just economic data had already sort of been slowing in some ways, and I think you’re now at a moment where people are just waiting to see more on the growth front. You’ve had two good inflation prints. You had a good producer price index report this morning. You had a good consumer price index report yesterday. Normally stocks rally off that news. S&P 500 futures are up about 0.3%, I think we just showed. So that’s just not happening this morning, and it didn’t happen yesterday. I think the S&P 500 fell what what did we close off 4%? On a better than expected CPI print. That’s not normal. That’s not what this market has been for the past two years, and I think it gives you a good sense of where the market’s at, and sometimes when the market’s trading like that, you need to just listen to it.
00:25 Josh
Josh, thank you so much. Really appreciate it.