Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: It has been a wild few weeks in markets. In
Speaker 2: late February, the Nasdaq one hundred index hit another record high,
Speaker 2: topping out months of gains that followed the election of
Speaker 2: Donald Trump.
Speaker 1: There really was sort of a sugar rush across Wall Street,
Speaker 1: even across Main Street with a lot of retail traders,
Speaker 1: and there was this excitement in certain corners that deregulation,
Speaker 1: low taxes, in embrace of cryptocurrencies would really boost markets
Speaker 1: and would boost the American economy.
Speaker 2: Charlie Wells covers Personal Finance for Bloomberg, and he says
Speaker 2: that now that picture is changing because those gains that
Speaker 2: followed Trump's s election, well.
Speaker 1: They have been entirely erased. So from the moment that
Speaker 1: he was elected until now, we're really seeing a reversal.
Speaker 2: There By last week, the S and P five hundred
Speaker 2: had wiped out all the value it's added since election day,
Speaker 2: three point four trillion dollars worth. The Nasdaq one hundred
Speaker 2: tumbled around three percent Monday morning, extending a selloff that's
Speaker 2: put it into correction. Territory investors were watching over the weekend.
Speaker 2: When Trump was asked on Fox News' Sunday Morning Futures
Speaker 2: about the possibility of a recession.
Speaker 1: I hate to predict things like that.
Speaker 2: There is a period of transition because what we're doing
Speaker 2: is very big recession predictions. Aside, the market volatility is
Speaker 2: expected to continue as investors struggled to price assets in
Speaker 2: a new world order created by the administration shifting tariff
Speaker 2: plans for China, Canada, and Mexico.
Speaker 1: So there was that idea of the Trump bomb, and
Speaker 1: now there's a sense that people might need to prepare
Speaker 1: for a Trump slump.
Speaker 2: I'm Sarah Holder, and this is the big take from
Speaker 2: Bloomberg News today on the show. Is the Trump bump
Speaker 2: becoming the Trump slump? And in an era of market whiplash,
Speaker 2: what do experts say you should do with your money?
Speaker 2: The optimism boosting markets after the election has started to
Speaker 2: give way to pessimism. So I asked Bloomberg's Charlie Wells
Speaker 2: to explain the shift. How much of this current volatility
Speaker 2: is about Trump's tariff plan and how chaotically it's been
Speaker 2: rolled out.
Speaker 1: Yeah, so, Well, a lot of the more recent selling
Speaker 1: off that we've seen in the market does have to
Speaker 1: do with Trump's tariff policies, and on the campaign trail
Speaker 1: he talked about tariffs. It almost sounded as if he
Speaker 1: were kind of using tariffs in his second campaign, that
Speaker 1: he was using the wall and building the wall in
Speaker 1: the first campaign. It was the sort of panacea, a
Speaker 1: kind of thing that would you fix the American economy,
Speaker 1: it would fix drugs, it would fix crime, et cetera.
Speaker 1: And if you kind of zoom out from the Base
Speaker 1: to Wall Street, a lot of people sitting at those
Speaker 1: trading desks weren't taking those threats of tariffs seriously. They
Speaker 1: really thought that the bark there would be louder than
Speaker 1: the bite. But what we saw was that Trump was
Speaker 1: pretty serious. So when those tariffs came into effect, you
Speaker 1: saw a deep sell off, But then you had indications
Speaker 1: from policymakers that, you know, maybe there would be reprieve.
Speaker 1: We ultimately saw a delay on a number of those tariffs,
Speaker 1: and so that created this kind of like jagged line
Speaker 1: in market charts, and that's where a lot of the
Speaker 1: volatility most recently has been coming from.
Speaker 2: Did Trump delaying imposing tariffs on Mexico and Canada until
Speaker 2: next month offer any market relief.
Speaker 1: Fits and starts? I would say and I think this
Speaker 1: gets at a bigger issue that we're not really hearing
Speaker 1: from CEOs right now. I think there's a lot of
Speaker 1: concern in corporate America about saying anything that could target them,
Speaker 1: and that could target them in the eyes of Trump.
Speaker 1: But what we know about executives is that they like certainty.
Speaker 1: They like to know what's going to happen, because they
Speaker 1: are making orders so much further in advance, and a
Speaker 1: lot of consumers are thinking about and if they suddenly
Speaker 1: think there may or may not be a twenty five
Speaker 1: percent tariff on the goods that they use to make
Speaker 1: their products, it's going to be really difficult for them.
Speaker 2: You know. Trump has said his decision to change course
Speaker 2: on tariff's at least momentarily didn't have anything to do
Speaker 2: with the negative market reaction we were seeing. What do
Speaker 2: you make of that?
Speaker 1: Yeah, I mean some of the timing on this was striking.
Speaker 1: I think, you know, we saw a sell off, and
Speaker 1: then very soon thereafter Trump talking about how he doesn't
Speaker 1: pay attention to the market. But one of the things
Speaker 1: that people in DC always say is that Trump uses
Speaker 1: the stock market as sort of a live opinion pollar
Speaker 1: barometer of how well he's doing. He really, you know,
Speaker 1: sees it as incredibly important. I think it's tough to say, though,
Speaker 1: how much the performance of the stock market would be
Speaker 1: influencing his kind of tit for tat kind of swings
Speaker 1: on policy. But you know, I think we also need
Speaker 1: to make the broader point that this isn't just Trump, right,
Speaker 1: So this does have to do with the fact that
Speaker 1: the market has been doing so well, and over the
Speaker 1: past few years, we've heard people talk about, you know,
Speaker 1: a correction coming. We have heard analysts, you know, across
Speaker 1: the board talk about how in particular, tech was just
Speaker 1: overvalued and that there was so much optimism about AI
Speaker 1: in particular that at some point, you know, there could
Speaker 1: be a pullback. And I think that is something that's
Speaker 1: also kind of been in play here. And so over
Speaker 1: the past few weeks, tech companies had been reporting earnings
Speaker 1: and Wall Street had really been hoping to see incredibly
Speaker 1: strong growth here to kind of meet the expectations, and
Speaker 1: that just wasn't met.
Speaker 2: Right we saw with the release of China's Deepseek AI
Speaker 2: version just a few weeks ago that caused another huge
Speaker 2: market reaction, erasing a lot of the games that tech had.
Speaker 1: Made exactly, and that was this idea that you know,
Speaker 1: a lot of the mag seven companies, a lot of
Speaker 1: tech companies have been spending so much money on AI investments,
Speaker 1: and along comes this kind of cheaper Chinese alternative that
Speaker 1: might not require as much spending, and so that took
Speaker 1: some of the wind out of the sales of these
Speaker 1: tech companies that really have been propelling the markets over
Speaker 1: the past two years.
Speaker 2: I want to take a closer look at some of
Speaker 2: these market swings we've been seeing across stocks, bonds, crypto.
Speaker 2: Where are we seeing the most volatility and where are
Speaker 2: we seeing the most stability.
Speaker 1: Yeah, so you're seeing a lot of volatility and some
Speaker 1: of these riskier corners of the market. I'm thinking about
Speaker 1: particular cryptos. I'm thinking about stocks that traders love to short.
Speaker 1: And you know, before the market sentiment shifted a few
Speaker 1: weeks ago, there really was this kind of risk on appetite.
Speaker 1: There was a sense that things could carry on and
Speaker 1: that money could be made in this Trump infused environment,
Speaker 1: and that's where you're seeing a lot of pullback. Bitcoin.
Speaker 1: You know, you're seeing a huge tip there, but also
Speaker 1: the Nasdaq right that entered correction, territory, and that speaks
Speaker 1: of the sort of twin issue of Trump terraff uncertainty,
Speaker 1: but also a reassessment of tech.
Speaker 2: What about stability? Are there any stocks, currencies, bonds that
Speaker 2: are kind of holding steady and have not been as
Speaker 2: impacted by the kind of volatility we're seeing elsewhere.
Speaker 1: Yeah, So you know, the big take here is that
Speaker 1: the rally is broadening out, and so you're sort of
Speaker 1: seeing a shift away from these big tech names and
Speaker 1: you're seeing a shift towards companies that maybe more reflect
Speaker 1: or broader picture of the US economy. Analysts talk a
Speaker 1: lot about the equal weighted SNP, which kind of is
Speaker 1: a slightly better representation as opposed to the market cap unweighted,
Speaker 1: which gets a lot of tech, And so you're seeing
Speaker 1: some stability there. A take too from a lot of
Speaker 1: experts in this is that when there is more volatility,
Speaker 1: when there is more uncertainty, you want to look at
Speaker 1: companies that are more necessary, they're not as discretionary. So
Speaker 1: these are things like consumer staples. These are things like
Speaker 1: healthcare that regardless of what things cost because of tariffs,
Speaker 1: regardless of how people are feeling, Americans are still going
Speaker 1: to buy and use those services.
Speaker 2: So, with everyone from CEOs to consumers stealing themselves from
Speaker 2: more economic uncertainty, what do experts say investors should do?
Speaker 2: That's after the break. Well, Charlie, on your beat, you
Speaker 2: speak with a lot of experts on personal finance. You've
Speaker 2: drawn from their expertise already in this conversation. But what
Speaker 2: are they saying generally about how everyday investors should be
Speaker 2: thinking about the market right now. People who might be
Speaker 2: retail invests or nervously watching their four oh one case,
Speaker 2: what should they be thinking about.
Speaker 1: Yeah, I think there's a little bit of a divide here.
Speaker 1: The overarching take is stay the course, don't make any
Speaker 1: drastic changes. But sometimes I'll push these analysts, sometimes I'll
Speaker 1: push these advisors to ask, all right, let's say someone's
Speaker 1: got everything handled. Let's say they've got their retirement account.
Speaker 1: That's good, but they've got, say, a brokerage account, They've
Speaker 1: got some investments that they can actually work with, and
Speaker 1: they had some interesting ideas over the past couple days.
Speaker 2: Tell us what are the ideas?
Speaker 1: Okay? So one of the points that Katie Nixon at
Speaker 1: Northern Trust Wealth Management told me we had a really
Speaker 1: good conversation, and she talked about looking at specific industries
Speaker 1: that do well in volatile times. So these as we
Speaker 1: were talking about, are those more kind of non discretionary,
Speaker 1: those consumers, staples, those healthcare companies, And that intuitively makes sense, right,
Speaker 1: But she made an even better point, which is, don't
Speaker 1: just look for industries, look at companies within those industries
Speaker 1: that are quality. And the focus really there is on
Speaker 1: companies that they've got solid earnings, they've got solid financials,
Speaker 1: and so sure, find the sector that works.
Speaker 2: But do your homework tech stocks, should you buy, should
Speaker 2: you hold off? What are you hearing and why is
Speaker 2: there such a disagreement there?
Speaker 1: Yes, this is such a good question. And one of
Speaker 1: my barometers of what's kind of cutting through from you know,
Speaker 1: Wall Street to main Street is my brother's kind of
Speaker 1: brofessional text message group. He is in New York. He's
Speaker 1: friends with a lot of kind of you know, thirty
Speaker 1: forty something lawyers. And one of the debates that's been
Speaker 1: resurfacing in that text for he'll send me screenshots I've
Speaker 1: got proof is questions about tech and a lot of
Speaker 1: people have exposure that they know about to text stocks.
Speaker 1: A lot of people don't. So if you look under
Speaker 1: the hood of your four oh one K, you might
Speaker 1: be surprised to find out some of the biggest holdings
Speaker 1: are Max seven names. So there's concern about, you know,
Speaker 1: how far does this rally and tech have to go.
Speaker 1: The divide here is do you sell or do you hold?
Speaker 1: And I think one of the points an advisor from
Speaker 1: California made to me last week was you might take
Speaker 1: this dip as a buying opportunity. And that's something that
Speaker 1: we know, you know, Wall Street will do from time
Speaker 1: to time. You see Amazon stocks, you know, go down
Speaker 1: just a little bit and you think, all right, that's
Speaker 1: a good discount. I see that. You know, Amazon's got
Speaker 1: strong fundamentals. Their earnings reports were pretty good, their projections
Speaker 1: going forward were good. And so that is a take
Speaker 1: that some analysts have. The others would say, you know what,
Speaker 1: maybe you've kind of juiced enough out of that tech orange.
Speaker 1: Drink that and take that energy you've got. And I'm
Speaker 1: really making a metaphor here, but go on me exactly.
Speaker 1: I like that take take that immunity defense and go
Speaker 1: invest in a healthcare stock, which you know is probably
Speaker 1: going to do better. It's going to perform fairly well
Speaker 1: regardless of market sentiment.
Speaker 2: This is a really silly question that I'm sure a
Speaker 2: lot of the personal finance experts you speak to would
Speaker 2: laugh at. But is it better right now to just
Speaker 2: keep your cash under your pillow and avoid entering the
Speaker 2: market at all?
Speaker 1: I think that is something that so many people are
Speaker 1: wondering about, right And I think if you think about
Speaker 1: cash not just like under the mattress, but also in
Speaker 1: a high yield savings account, you're getting pretty good yield
Speaker 1: on that cash. And so for some people that could
Speaker 1: actually make sense, people who might be closer to retirement,
Speaker 1: people whose risk tolerance is lower. But the concern with
Speaker 1: a lot of advisors is that millennials, even some Gen xers,
Speaker 1: definitely some Gen Z people might be you know, a
Speaker 1: little bit too risk averse. And I think the concern
Speaker 1: is that, sure, you've got your cash today, but what
Speaker 1: happens if inflation doesn't trend down as much as people
Speaker 1: are hoping, then that cash is going to lose that
Speaker 1: value over time, and so you're not getting the returns
Speaker 1: that you'll need to get a study retirement. And so
Speaker 1: the overarching message that I hear from advisors is sure,
Speaker 1: there may be turbulence now, but dollar cost averaging into
Speaker 1: the market, where you're kind of setting, you know, an
Speaker 1: amount that you're going to contribute, you know, over a
Speaker 1: defined period that you stick to over time, that really
Speaker 1: is the best strategy, according to them.
Speaker 2: What about people considering making big purchases right now, like
Speaker 2: buying a car for example, what's the move there?
Speaker 1: Yeah, I think it's tricky. I looked into cars, and
Speaker 1: I think what you have been hearing a lot about is,
Speaker 1: you know, automakers concerned about tariffs. There have been reports
Speaker 1: out that prices for cars could go up as much
Speaker 1: as twelve thousand dollars.
Speaker 2: And I think because of the tariffs on Mexico.
Speaker 1: That's exactly right, because of tariffs on Mexico and Canada's
Speaker 1: potential tariffs, which of course have been delayed as far
Speaker 1: as we know. And the concern is that those prices
Speaker 1: could go up. And so I called some car buying experts,
Speaker 1: which is really interesting. I called someone at Kelly Bluebook,
Speaker 1: which is, you know, they value cars, that do research
Speaker 1: on car prices, and his point was, yeah, if you
Speaker 1: need a car, might want to buy it now because
Speaker 1: prices could go up and even if there aren't price increases,
Speaker 1: specifically due to tariffs, you have this kind of consumer
Speaker 1: belief that prices could go up that changes behavior, that
Speaker 1: increases demand, and then car dealerships could meet that increased
Speaker 1: demand by rising prices. So I also talk to financial adviser.
Speaker 1: I put it the same question to him, and he
Speaker 1: told me basically the same thing. He said, if you
Speaker 1: need a car, and the decision really should be made
Speaker 1: based on need, you should probably buy it.
Speaker 2: I'm curious about how your sources are interpreting this moment.
Speaker 2: Do they see it as a period of volatility or
Speaker 2: is this a full blown correction.
Speaker 1: That is really tricky. I think that there again is
Speaker 1: something a divide, surprise, surprise. In the polarizes to the
Speaker 1: United States, there is a divide about something. There are
Speaker 1: those who have talked to me about people wanting to
Speaker 1: have emergency funds, you know, reassessing those. There are people
Speaker 1: who point to what they see as leading in indicators,
Speaker 1: which might be graduates from top MBA is which is
Speaker 1: a story I wrote recently from top MBA programs having
Speaker 1: a difficult time finding jobs. Is that a sense that
Speaker 1: kind of companies are slowing down hiring is that a
Speaker 1: sense that the economy could kind of be downshifting. But
Speaker 1: then there are those who just see these as jitters.
Speaker 1: And there was an analyst I spoke with who said,
Speaker 1: you know, he sees actually twenty twenty five as being
Speaker 1: positive for the stock market and that now is a
Speaker 1: good time to get a discount on some of these names.
Speaker 1: So I think no one has a crystal ball, unfortunately.
Speaker 1: But I think the consensus that I would say I've
Speaker 1: picked up on is, you know, take now as a
Speaker 1: moment not to panic, but to kind of reassess where
Speaker 1: you are, where your exposure is to particular industries, how
Speaker 1: suited you know your portfolio is to the current economic climate,
Speaker 1: but also how how ready you would be if there
Speaker 1: were some kind of downturn.
Speaker 2: This is the big take from Bloomberg News. I'm Sarah Holder.
Speaker 2: This episode was produced by David Fox and Alex Tye.
Speaker 2: It was fact checked by Adriana Tapia and mixed and
Speaker 2: sound designed by Alex Sugia. It was edited by Tracy
Speaker 2: Samuelson and Craig Giamona. Our senior producer is Naomi Shaven.
Speaker 2: Our senior editor is Elizabeth Ponso. Our executive producer is
Speaker 2: Nicole beamsterboorg Sage Bauman is Bloomberg's head of podcasts. If
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