Squawk on the Street SOTS 2nd Hour: Tariffs Latest: Yields Jump, CEOs Speak Out, and More On How To Trade It 4/9/25
Apr 9, 2025
The podcast dives into the latest tariff moves between the EU and China, highlighting the implications for the pharmaceutical sector. With Trump’s new tariffs causing stock declines for big players like Eli Lilly, there's concern over rising treasury yields. Delta and Walmart express caution, pulling guidance due to trade uncertainties. Meanwhile, insights from market veteran Bob Doll offer strategies for navigating volatility. CEOs, including Ethan Allen’s head, voice their frustrations with tariffs, stressing their potential economic impact.
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Bond Market Confounding
- The bond market's stunning overnight move is confounding, as treasuries initially served as a safe haven.
- This reversed, raising concerns about stagflation, tariff-driven inflation, and the unwinding of the basis trade.
U.S. Asset Dumping Concerns
- The bond market sell-off, coupled with U.S. stocks and dollar decline, raises concerns about U.S. asset dumping.
- This raises the risk premium for owning U.S. assets and questions U.S. exceptionalism.
Rising Yields and Refinancing
- One potential upside to lower treasury yields was cheaper debt refinancing for the administration.
- However, with rising yields, higher interest costs become painful for the economy.