Tariffs Latest: Yields Jump, CEOs Speak Out, and More On How To Trade It 4/9/25
Apr 9, 2025
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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.
Escalating tariffs announced by the EU and US are creating significant uncertainties for industries like agriculture and pharmaceuticals.
The bond market's rising treasury yields are causing volatility, prompting investors to reassess their positions and liquidity strategies.
Corporate CEOs are increasingly cautious, with many retracting guidance and acknowledging the unpredictable impact of tariffs on consumer behavior.
Deep dives
Market Rebound Amid Volatility
The stock market is experiencing a rebound, with the S&P 500 rising by 1% and technology leading the charge with a notable 2.5% increase in the information technology sector. Despite the overall positive movement, concerns about volatility remain due to multiple contributing factors, including geopolitical tensions and fluctuating bond yields. The Nasdaq, although up 2%, still shows an approximate 19% decline from previous highs, indicating skepticism among investors about sustained growth. The bond market is a focal point as higher treasury yields continue to reflect changing market dynamics and investor sentiment.
Impact of Tariffs on Trade Relationships
Recent announcements from the European Union and the United States regarding tariffs suggest escalating trade tensions, impacting U.S. agricultural products and pharmaceuticals. A major point of concern is President Trump's declaration of impending tariffs on pharmaceuticals, which could significantly affect pricing structures across the industry. Analysts warn that this tariff could lead to a supply chain scrambling as companies reevaluate where they manufacture their goods, particularly given the lengthy process of establishing new facilities. The uncertainty surrounding these tariffs highlights the potential for retaliatory actions and further complications in international trade relationships.
Bond Market Dynamics and Investor Concerns
The bond market has been experiencing notable volatility, with treasuries seeing higher yields and traders closely monitoring liquidity issues. A basis trade, which involves leveraging substantial amounts of capital in bond futures, is causing ripple effects as positions unwind, leading to forced liquidations of various assets. While some market commentators have indicated that these movements signal a liquidity issue rather than a full-blown crisis, the overall apprehension in the market is palpable. The implications of rising yields are expected to ripple into other sectors and impact broader economic conditions.
Corporate Guidance and Economic Outlook
Corporate executives are responding to a complex economic landscape, with firms like Delta Airlines retracting their guidance amid uncertainty stemming from fluctuating demand and tariffs. The CEO noted that the company is experiencing stalled growth, prompting a cautious outlook for future capacity and revenue estimates. Other companies are similarly hesitant to provide definitive forecasts, suggesting a widespread acknowledgment of the current volatility and unpredictability in consumer behavior. This cautious approach reflects broader trends as companies navigate a turbulent economic environment influenced by geopolitical factors and market dynamics.
Consumer Sentiment and Market Opportunities
While the retail sector faces challenges due to tariff-related issues, some companies are seeing a revival in consumer interest as they promote regionally manufactured products. Farouk Khathwari, the CEO of Ethan Allen, expressed a nuanced view on tariffs, suggesting they should be monitored as they can affect consumer confidence and spending patterns. Despite a brief dip in demand, recent weeks have shown signs of recovery, indicating consumers may be drawn to products emphasizing domestic production. As businesses adapt to this evolving marketplace, the focus remains on maintaining stability while effectively communicating their advantages to consumers.
A volatile first hour of trade as the EU and China make new tariff moves: Sara Eisen, David Faber, and Michael Santoli broke down the latest alongside fresh reporting from the White House, Beijing, and more. Plus, what Trump’s promise of new tariffs on pharmaceuticals could mean for the group, as stocks like Eli Lilly and Novo Nordisk take a leg lower – and the breakdown of what could be driving this big jump in treasury yields overnight.
Also in focus: Delta and Walmart pulling guidance – what’s driving the move and what comes next; Longtime market veteran Bob Doll joined the team with his stock playbook for volatility; and CEOs starting to sound-off on tariffs… Why the head of furniture retailer Ethan Allen says Trump’s gone “too far” here.
