Silver linings playbook: Market panic edition

Axios

07-04-2025

Politicians, investors, and CEOs around the world are squarely in panic mode in the wake of Donald Trump's seismic tariff announcement last week.
As ever in the markets, however, one person's panic is another person's buying opportunity. So, here are four bright spots, or silver linings
1. It's not the end of the world
The two previous major crises of this century — the 2008 financial crisis and the 2020 coronavirus pandemic — were both global.
The tariff crisis, by contrast, has its epicenter in Washington, and what's bad for the U.S. could end up kicking the rest of the world into a higher gear.
The fact that the dollar fell rather than rising on news of the tariffs is a sign the market now expects the rest of the world to outpace the U.S. in growth.
How it works: Just as JD Vance's speech at the Munich Security Conference led to unprecedented levels of pan-European fiscal and security coordination, Trump's tariffs are likely to catalyze new deals between and within regions that now trust each other more than they trust Trump.
Ahead of Trump's tariff announcement, for instance, the trade ministers of Japan and South Korea released a joint statement with China, saying that "trilateral efforts" between them were "essential to fostering the prosperity" of the global economy.
Zoom out: The U.S. — with just 4% of the world's population — accounts for more than 29% of its total consumption, per the World Bank.
A U.S. recession, combined with closer ties elsewhere, could help bring those two numbers closer in line with each other and set the groundwork for more broad global prosperity.
2. The end of monopoly rents
A lack of competition is fantastic for the monopoly in question, but it's rarely good for an economy as a whole.
Much of the run-up in the U.S. stock market has been attributable to the monopolies held by megacap technology companies.
Now, for the first time in years, those monopolies are looking assailable. The tariffs, writes Dan Ives of Wedbush Securities, represent a "global policy mistake that will reverse U.S. tech dominance" in general, and specifically companies like Nvidia, Microsoft, Amazon, and Alphabet.
Also on Ives' list is Palantir, the company founded by Peter Thiel, whose Silicon Valley bible,"Zero to One" is based around the idea all founders should try to create a monopoly.
3. Stocks are now on sale
"For long term clients who can tolerate this volatility, and who can can tolerate possibly a little bit more pain, this is a buying opportunity," Mark Malek, chief investment officer of Siebert Financial, said.
Between the lines: For bulls, any dip looks like a buying opportunity.
"Mickey Mouse could be in power in the United States, the U.S. is going to have 4% growth by the end of the decade, and it's going to be higher in the next decade," economist Nouriel Roubini told Bloomberg on Friday.
"Even Trump, even with the bad policy, cannot screw up technological innovation."
4. Keeping things in perspective
Goods only account for about one-third of total U.S. consumption, and imported goods are less than one-fifth of all goods.
By the numbers: Any recession caused by the tariffs will likely be a lot shallower than what we saw in 2009 or 2020.
While nearly all forecasts for U.S. economic growth in 2025 have been scaled back, most remain positive. Goldman Sachs sees 1% growth this year, for instance, while Nomura expects 0.6% growth.
JPMorgan is in the minority of banks that expects GDP to shrink this year. It predicts a growth rate of –0.3% for 2025. That would be a pretty modest recession compared to 2009 (–2.6%) or 2020 (–2.2%).