WEBVTT - Instant Reaction: Trump Tariffs Trigger Stock Market Meltdown

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>This is a breaking news update from Bloomberg instant reaction

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<v Speaker 2>and analysis from our three thousand journalists and analysts around

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<v Speaker 2>the world.

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<v Speaker 1>Almost nothing was spared here on this Thursday afternoon, the

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<v Speaker 1>first full day of trading. Once we learned about the

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<v Speaker 1>new US tariff regime, an SMP five hundred that is

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<v Speaker 1>going to pose the day lower by about four point

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<v Speaker 1>eight percent. That's the worst day for the index going

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<v Speaker 1>back to June of twenty twenty. It pushes the S

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<v Speaker 1>and P five hundred back into correction territory down twelve

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<v Speaker 1>percent from its all time high fifty three ninety six,

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<v Speaker 1>and change is where it settles. On the day. The

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<v Speaker 1>Dow Jo's Industrial average lost more than sixteen hundred points

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<v Speaker 1>on the day, taking it down by four percent on

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<v Speaker 1>the day. The Nazak composite down one thousand points or

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<v Speaker 1>six percent, the Nazak one hundred down a thousand points

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<v Speaker 1>or five point four percent, the Russell two thousand down

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<v Speaker 1>more than one hundred points or seven percent, s and

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<v Speaker 1>P four hundred mid caps down seven percent down, transports

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<v Speaker 1>down nine percent. And I know, Alex you like to

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<v Speaker 1>look at the equal weighted index that was underperformer relative

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<v Speaker 1>to the S ANDP down four point a pers.

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<v Speaker 3>I'm just tech, yeah, yeah, just across the board. Unbelievable.

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<v Speaker 3>I don't even know that I should even mention how

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<v Speaker 3>many year down in the S and P, but I'll

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<v Speaker 3>go there. You got four hundred and seven names losing ground.

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<v Speaker 3>You do have ninety five names to mention, some hitting

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<v Speaker 3>fifty two week highs in the S and P, but

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<v Speaker 3>ninety five names alex higher in the S and P

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<v Speaker 3>five hundred yep.

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<v Speaker 4>Taking a look that IMAM function really crystallizes the move

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<v Speaker 4>that we're seeing within the equity market today. All sectors

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<v Speaker 4>in the red except for consumer staples, as we just

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<v Speaker 4>talked about, those are the kind of the only gainers,

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<v Speaker 4>some hitting fifty two week highs, but energy, tech, discretionary,

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<v Speaker 4>and industrials and financials all getting hit extraordinarily hard. Energy

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<v Speaker 4>sectors off by over seven percent.

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<v Speaker 1>And just to to those superlatives, a KBW Bank index

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<v Speaker 1>down ten percent, the biggest drop going back to March

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<v Speaker 1>of twenty twenty three. The Philadelphia Semiconductor Index Carol and

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<v Speaker 1>TIM had their worst day since March of twenty twenty,

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<v Speaker 1>down nine point nine percent.

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<v Speaker 3>YEP dollar wiping all of its gains out since the

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<v Speaker 3>president's win on November fifth, that election win. So yeah,

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<v Speaker 3>a lot of superlatives, no doubt about it. On this Thursday,

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<v Speaker 3>I actually found some gainers, guys, and let's go to it.

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<v Speaker 3>We were talking about certainly the consumer staples area, which

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<v Speaker 3>was an outperformer easily the group overall. Coca Cola among

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<v Speaker 3>that list, up two point six percent here in today's session,

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<v Speaker 3>so that was gaining. Another consumer staples Philip Morris, that

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<v Speaker 3>one was up just shy of four percent here at

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<v Speaker 3>the close. And then actually some fundamental reasons or at

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<v Speaker 3>least something that could possibly change maybe the outlook for Intel.

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<v Speaker 3>This one up at its highs almost nine percent today,

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<v Speaker 3>finishing with about a two percent gain at the close.

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<v Speaker 3>The information coming out and reported that the company tentatively

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<v Speaker 3>agreed to a chip making joint venture with TSMC Taiwan

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<v Speaker 3>Semiconductor Manufacturing. Bloomberg News, you might remember back in February

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<v Speaker 3>reported that the companies were talking about the idea at

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<v Speaker 3>the request of the Trump administration. And in this one,

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<v Speaker 3>the number one gainer in the S and P five

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<v Speaker 3>hundred French fries YEP gotta love it. LAMB Weston Holdings

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<v Speaker 3>up ten percent here at the close. The company came

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<v Speaker 3>out and it posted fiscal third quarter results top estimates,

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<v Speaker 3>and the management hired a consulting firm to look for

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<v Speaker 3>cost saving. So even in a sell off, guys, fundamentals

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<v Speaker 3>still do matter.

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<v Speaker 1>And can I just add an honorable mention to there,

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<v Speaker 1>and is actually on a sec on a country basis, please, Actually,

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<v Speaker 1>one of the Mexico's main benchmark index actually had stage

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<v Speaker 1>a pretty decent rally earlier in the day. It ended

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<v Speaker 1>up flat on the day, and you actually saw some

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<v Speaker 1>Indicas in Canada rally largely because of the fact that

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<v Speaker 1>they did not get the worst of those reciprocal terists,

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<v Speaker 1>if you will, that Trump laid out yesterday.

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<v Speaker 2>All right, well, let's go to some of the decliners.

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<v Speaker 2>I had the easy job today, and in fact, there

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<v Speaker 2>were so many decliners. I went with an entire index,

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<v Speaker 2>the Bloomberg mag seven Total Return index following dated by

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<v Speaker 2>six point seven percent. It's worst day in more than

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<v Speaker 2>three years. Everything in there in the red. Apple down

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<v Speaker 2>more than nine percent, Amazon and meta platforms down nine percent,

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<v Speaker 2>and video down close to eight eight percent. Tesla down

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<v Speaker 2>six five and a half percent, Alphabet down four percent,

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<v Speaker 2>Microsoft down two point four percent, all the biggest weights

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<v Speaker 2>on the major indices and all among the most actively

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<v Speaker 2>traded stocks today. Also did want to focus on retail

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<v Speaker 2>today because we saw some deep, deep moves there, Nike

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<v Speaker 2>following by fourteen point four percent. In fact, it's now

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<v Speaker 2>trading at the lowest level going all the way back

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<v Speaker 2>to twenty seventeen. It was among the US and European sneaker,

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<v Speaker 2>clothing and jewelry makers that plunged amid this shock to

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<v Speaker 2>supply chains. Vietnam is the issue for Nike. It's the

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<v Speaker 2>largest supplier of footwear for Nike. Today half of Nike

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<v Speaker 2>branch shoes are made in Vietnam. Nike also faces additional

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<v Speaker 2>challenges because it's so dominant in the US, which is

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<v Speaker 2>the world's biggest single sports market. And finally, another retailer,

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<v Speaker 2>RH plunging the worst day ever the owned company of

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<v Speaker 2>Restoration Hardware. They plunged as much as forty five percent,

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<v Speaker 2>a record declined. This after the annual revenue growth forecast

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<v Speaker 2>trailed Wall Street expectations. Fourth quarter sales and profit also

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<v Speaker 2>missed the average analyst estimate. Trading now at levels last

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<v Speaker 2>seen in twenty twenty, shares falling today by more than

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<v Speaker 2>forty percent.

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<v Speaker 4>Where do you go. You go to lam Weston and

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<v Speaker 4>you also go to the bond market. It was the

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<v Speaker 4>front end that really outperformed here. The two year yield

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<v Speaker 4>at one point was down by about seventeen basis points.

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<v Speaker 4>It fell the most since August of twenty twenty four,

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<v Speaker 4>and we're now at the lowest level since October, so

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<v Speaker 4>before the election. But overall, guys, we're looking at a

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<v Speaker 4>twenty one basis point moved to the downside for the

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<v Speaker 4>two year in just these four days alone, not even

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<v Speaker 4>taking into account we're going to see tomorrow with the

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<v Speaker 4>jobs number.

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<v Speaker 1>It was interesting too if you were looking for any

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<v Speaker 1>bright spots, I mean, I'll leak you saw a lot

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<v Speaker 1>of healthcare stocks move higher. Of course, again that defensive trade.

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<v Speaker 1>In fact, that managed Healthcare index, the one that tracks

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<v Speaker 1>the ones in the smb I, had a really good day.

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<v Speaker 1>And it gets to that question as to if you

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<v Speaker 1>do want to stay invested, you want to keep that

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<v Speaker 1>money there you go, I mean, is there a safe

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<v Speaker 1>spot out there right now other than you know, consumer

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<v Speaker 1>staples and healthcare?

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<v Speaker 2>I don't know.

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<v Speaker 3>It's a good question, right, And I also do wonder

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<v Speaker 3>if you do move that money at this point, you know,

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<v Speaker 3>with what's certain, dear, what will it take for you

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<v Speaker 3>to get more actively back into the market at some point. Certainly, again,

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<v Speaker 3>you go back to so much coming out of the

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<v Speaker 3>White House, so much coming out of Washington, and we

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<v Speaker 3>know that this stuff can change, and so when do

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<v Speaker 3>you believe that, Okay, this is the policy, this is

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<v Speaker 3>what stays in place. And I think that's what's going

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<v Speaker 3>to continue to make it tricky, certainly for investors in businesses.

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<v Speaker 1>I just add though too, I'm sorry to interrupt, but

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<v Speaker 1>just on the consumer staples front, because I think a

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<v Speaker 1>lot of people were flocking there. You saw the rally

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<v Speaker 1>and Pepsi and some of those names. But then you

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<v Speaker 1>have the CEO of ConAgra was talking a little bit

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<v Speaker 1>earlier today who really talked about how he's concerned. He said,

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<v Speaker 1>right now, they're not being hurt. Right now, they don't

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<v Speaker 1>have to make a lot of changes. But he basically

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<v Speaker 1>said that you know, once the dust starts to settle here,

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<v Speaker 1>you know, things may not look good. And he actually

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<v Speaker 1>talked about this idea of not really being able to

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<v Speaker 1>give firmer guidance, and that might be the story of

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<v Speaker 1>this earning season which really kicks off and in just

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<v Speaker 1>about the four or five days.

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<v Speaker 2>Yeah, we'll certainly look forward to hearing from the executives

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<v Speaker 2>of those companies and certainly the commentary from the banks

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<v Speaker 2>about how consumers are doing in the meantime. Romayne, in

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<v Speaker 2>your question about where actually to invest your money is

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<v Speaker 2>a question we've been posing to our guests throughout the day.

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<v Speaker 2>We did speak to Mace McCain over at Frost Advisors,

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<v Speaker 2>who's actually not buying the trade of going to Europe

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<v Speaker 2>right now. He thinks that's going to end very soon

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<v Speaker 2>and it's going to end poorly. He's sticking with US companies,

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<v Speaker 2>but midcaps because they have less exposure to international markets.

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<v Speaker 2>He's still bullish on the US in the long run.

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<v Speaker 1>But does that take into account economic slowdown though?

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<v Speaker 2>Yeah, I mean, look, he's staying invested right now. He's

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<v Speaker 2>getting a lot of calls from clients. They're obviously very concerned.

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<v Speaker 2>They want explanations of what's happening to the market. But

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<v Speaker 2>he's staying invested.

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<v Speaker 4>Well, here's my thing too. And then in the short term, though,

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<v Speaker 4>I wonder if we're going to see a lot more

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<v Speaker 4>downside in that. When you have volatility spikes like this

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<v Speaker 4>guy so and we're up to nearly thirty for the vics,

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<v Speaker 4>you have funds that rebalance. Whether you're looking at ETPs

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<v Speaker 4>or etns, or whether you're looking at say CTA's commodity

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<v Speaker 4>trading advisors, or you're looking at volatility funds. They have

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<v Speaker 4>to rebalance when volatility spikes and they have to sell stocks.

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<v Speaker 4>That's on a long term call, right, but that churn

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<v Speaker 4>could continue through the next couple of days and they're

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<v Speaker 4>forced to kind of rebalance here.

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<v Speaker 3>Actually, we put that question to Peter at Order over

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<v Speaker 3>at William and Mary. You know, he's worked on Wall Street,

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<v Speaker 3>he's now an academia, runs his own investment firm as well.

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<v Speaker 3>And we said, you know, especially with the S and

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<v Speaker 3>P five hundred from peak to trough down more than

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<v Speaker 3>ten percent? Was it of almost twelve percent? So was

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<v Speaker 3>this a bear market? Could it go lower? And his

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<v Speaker 3>expectation was that, yeah, he thought things could actually go

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<v Speaker 3>lower from here. So I think that's a really good point.

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<v Speaker 3>You know, have we bottomed out? And that's the question,

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<v Speaker 3>all right, Dot that dot