Excess Returns Mag Seven Margin Crunch | Cameron Dawson on Tariffs, Recession Risk and the Defensive Investing Trap
May 3, 2025
Cameron Dawson, the CIO of NewEdge Wealth, provides sharp macro insights and investment strategies. He discusses the precarious position investors face with tariffs potentially leading to a recession. Dawson highlights the potential economic fallout from 145% tariffs on China and explores the shifting dynamics of treasury demand in a capital account war. He also emphasizes strategies like favoring value stocks over growth, the importance of quality investments, and effective rebalancing techniques amid market chaos.
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Economy in Tariff Purgatory
- The economy is in "no man's land" between tariff shocks and hard data impacts, causing prolonged uncertainty.
- Full effects of tariffs won't be clear until late Q2 or early Q3, masking true demand and supply issues.
Early Signs of Economic Slowdown
- Early soft data like small business sales and labor differential signal labor market slowdown predating tariffs.
- Sharp drops in port imports and trucking activity indicate growing supply chain strains and margin pressure risks.
U.S. in Dual Account Wars
- The U.S. faces a current account war with China and a capital account war with the rest of the world.
- Reduced demand for dollars and treasuries may indicate shifts in global financial flows against the backdrop of trade tensions.