80 days since Trump's been in. 4 elements pressuring markets & creating opportunities for the brave
What’s happening in markets, with uncertainty in the air this entire quarter
It’s been 80 days since Donald Trump was inaugurated. About 10 days since markets were disrupted by “Liberation Day” and Trump hit much of the world with tariffs. China retaliated, Europe did too. Sure, Trump said he’s open to negotiate. And he paused some tariffs for 90 days, the EU then paused counter-tariffs. But with negotiations on and some pauses in place, it means uncertainty for you and I and, the entire stock market will stick around this entire quarter.
From YouTube
What’s pressuring and worrying markets?
Market fear is already as high as it was in COVID. Markets are also as volatile as COVID. One day up 12%. Next they’re down 4%. There are so many unknown unknowns. We need to remember a couple of things.
1 - Markets need direction to rally up – because markets are forward-looking.
2- Uncertainty lingers around tariffs. And where the economy is headed. With 70% of economic growth tied to the consumer in the US - the world’s biggest economy. So there is uncertainty about US interest rates as well.
3- Thirdly, there’s uncertainty about where companies are headed. What they see with earnings for the year ahead.
The stock market is just a reflection of the health of the biggest companies in the world, remember. And how they see earnings growth. Also note, earnings growth drives share price growth. So tariffs make it pretty bloody hard for a company to grow earning. If they push prices up, and profits down.
So there are four key themes that could pressure markets / shares lower. But keep in mind, these pressures could bring you investing opportunities. Particularly if you believe Morgan Stanley, who said there is less immediate downside risk for markets.
1- Be wary of companies walking away from guidance. Like Delta did.
Delta Air $Delta Air Lines (DAL.US)$ was one of the first companies to report earnings and outlook out of the S&P 500m $S&P 500 Index (.SPX.US)$ companies this quarter. Delta is a bellwether for airlines and said Trump tariffs are hurting bookings. And it’s seen a reduction in broad consumer confidence and corporate confidence. So it’s pulled all growth plans for 2025 and walked away from sales forecasts for the year. This is reminiscent of COVID. And reflects what we could see some of the world’s biggest companies walk away from sales forecasts for the year.
2- Be wary of companies abandoning AI spending plans. Microsoft did.
So watch results Microsoft results April 30. $Microsoft (MSFT.US)$ abandoned its US$1 billion data center project in Ohio. Bill Gates and Satya Nadella made it clear that it’s hard to commit to capital spending with tariff uncertainty. When we have one of the world’s biggest companies saying this, we know it’s not a good sign for America’s future. Or for stocks. It reflects the destructiveness of tariffs. It just makes you wonder who else will walk away from AI and R&D plans. And wonder when job cuts will be next. Just like COVID. MSFT shares are down 18% from their high.
In the first trade war they fell 18.5% peak to trough, before rebounding 44% to a new record high after 1.8 months.
3- Be mindful markets don’t even like good surprises anymore. Like Amazon sticking to spending plans
Even when a company sticks to its capital spending plans. Like Amazon. This week we learnt $Amazon (AMZN.US)$ is pushing ahead with its US$20 billion push to get itself into the space business. The company’s CEO also defended its AI spending plans to fork out US$100 billion this year to develop AI. Watch their results on April 30. Amazon shares are down 24% from their high.
In the first trade war they fell 36.2% peak to trough, before hitting a new low, then rebounding 55% over 4.6 months and hitting a new high.
4- Expect companies to say they need to pass on higher costs from tariffs. Watch Apple
Will we maybe see companies such as Apple cut costs as in staff. It will be key to watch $Apple (AAPL.US)$ results May 1. They make 17% of their money from China and their supply chains are mostly in Asia. Meaning its costs are going to swell. Apple shares are down 26% from their high.
In the first trade war they fell 39.1% peak to trough, before hitting a new low, and rebounding 63% to a new high after 6.4 months and hitting a new high.
Buy the dip?
So if history repeats, or rhymes, and $Microsoft (MSFT.US)$, $Amazon (AMZN.US)$ and $Apple (AAPL.US)$ fall by similar amounts like they did in the first Trump-induced trade wars of 2018, just be mindful the recovery in their shares could take 2 to 7 months.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Jessica Amir
Moomoo Official Market Strategist
moomoo, market strategist.
Seen/heard on Fox News Business, ABC, SBS, Reuters wires.
Investor/Trader.
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TWIMO (151403908) : giggle…. chuckle…. are you thinking it’s just another Friday or it’s Friday already? I’ve spent more time observing and reading Mooers posts than trade…. wondered daily if it was the bottom and now it’s the bottom’s history already?
It would’ve been a lonely place in here if not for this communication forum… Anyways, have a good weekend
057特蓝不靠普 : Great leader would have anticipated the implications to the stock markets and the economy for his policy. Lets dont disappoint him, join the rally let it to the Max. Everything will then sorted out and starts again new
Space Dust : China has better p/e ratios ..
when will Trump bring that up, ? lol
Jknight : Thanks for the big racks of information and analysis. Trump is really making everything uncertain, not sure if his 90 days of calm will yield anything in the market as there seems to be no rule of law with regards to his actions, I mean in WTO there were rules of respecting trade agreements made between countries but he just proved america is not true to its word of which means the 3 months of calm still mean uncertainty and caution, dipping the whole world economy. I think only medical and essentials will go up, if not just due to the cost of the tariffs in the future.
73372627 Jknight : In fact the 90 days has a reason. Now everybody know the tariffs and where and how will be apply. 90 days it is for negotiations (first day after announcment, 52 countries want negotiations). The most hit will be for China with estimate at minimum -2% GDP and at least 30 millions job loose.
Here the sectors: Healthcare, Financial, Aluminium, Copper, Steel, Mining, Oil will expand. The most sectors to boom on market will be (with stocks No):
1. - 68 in Semiconductors, 2. - 56 in Communication equipment, 3.- 48 in Electronic components, 4. - Semiconductors Equipment & Materials.
The 90 days it is also to give to companies time to reorganise and also to exporters in US to end theirs high taxed composants stocks.
In consumer sector many companies based only on Chinese import will suffer most till manufacturing sector will addapt to the new reality.
Agricol sector will boom also versus 3rd quarter of this year.
The basic of the tariffs stay on the concept the money spend and stay inland.
The drop in market at the base now it is on massive shorting attacks, just analize the following pic I attach here: (the small redish near the symbol represent SEC-201 rule applyied). This mean squeeze of the market and institutional accumulations like in 2020 and then market boom.
Manuel Negrete : bs as usual same old Uncle Sam saying you is who I want in general
is what you got for me boy lol!?
Heng8888888 Space Dust : Trump is not a leader , he is just a business man
10baggerbamm Space Dust : you don't realize that the vast majority of Chinese companies would never pass an audit most of them cook their books and use enron accounting and I can't wait till Trump mandates that every Chinese stock will either be delisted or must have five years audited financials by an SEC approved accounting firm and if there's any changes in their accounting of significance they can't be listed because that's blatant fraud and then if they happen to pass the audit then they're going to pay $10 or $20 million annual fee just to have the privilege of being listed in the US marketplace because if these stocks are delisted from the United States Market you're going to watch a China stock market crash like 20% in a day. and quite frankly that's what I'd rather see Trump do delist every single one of them from us marketplace because there's no us companies that trade in China. so that's the easiest way to crash the Chinese stock market all he has to do is say this Friday at 4:00 p.m. Chinese stocks will be prohibited from trading on any exchange in the United States New York American NASDAQ and over the counter hasta la vista baby.
Space Dust 10baggerbamm : nice , thorough answer.![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
yes, the book cooking is worse than just the corporations. What if all the projections for Chinese investment were a scam?
world investment capital set on Chinese consumers that never existed.
China NEVER had the population they claimed?
To gain
China was planning on taking that money instead, and setting themselves up to supplant USA as the lazy fat consumer having everyone else make stuff for them ( how Chinese CCP feels)
OGzhuang : There's no way, it's too disgusting.