Goldman Sachs The Markets Tariffs could spark “a new rotation” in US equities
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Apr 4, 2025 Shawn Tuteja, who manages ETF and custom baskets volatility trading at Goldman Sachs, drops valuable knowledge on navigating market turbulence caused by rising tariffs. He discusses their unexpected effects on equity markets, urging investors to remain agile in uncertainty. Tuteja highlights a potential rotation towards large-cap tech stocks as the 'Magnificent Seven' falter. The conversation also touches on the intricacies of the upcoming earnings season, stressing the importance of corporate expectations over historical performance.
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Tariff Surprise
- Markets were complacent about tariffs, expecting them to be lower and delayed.
- The actual tariffs were higher and sooner than expected, surprising investors and causing a market drop.
Test Analogy
- Shawn Tuteja uses a test-taking analogy to describe market uncertainty.
- Uncertainty is removed, but the outcome might still be negative, like failing a test.
Magnificent Seven Performance
- The Magnificent Seven stocks (large-cap tech) underperformed in Q1 2025, driven by concerns about AI and valuations.
- Despite an overall market downturn, these stocks might perform defensively, similar to 2018.