Why Wall Street's biggest bear isn't budging on his calls after Trump tariff pause

Yahoo

11-04-2025

It's going to take more than a reciprocal tariff pause to keep Wall Street's biggest bear from roaming the markets and heading into hibernation.
"Based on my calculations, the tariff rate is still quite high — at least as high as anything we have seen since the 1930s. There is no guarantee these so-called reciprocal tariffs are going to come down. The fact of the matter is that most countries don't have very large trade barriers with the US," BCA Research chief strategist Peter Berezin tells me.
Added Berezin, "The uncertainty is a problem —I think we are still headed into a recession, unfortunately."
Berezin has told me recently he sees a 75% chance of a US recession this year and the S&P 500 dropping 15% to 4,450. He hasn't ruled out the US already being in a mild recession.
Listen: Why Jamie Dimon may be wrong on a recession
Berezin gained attention for being the lone bear on Wall Street coming into 2025. Further, he correctly called in 2022 there would be no US recession — despite most on the Street bracing for one. He has been an economist for more than 30 years, with stints at the International Monetary Fund (IMF), Goldman Sachs, and now BCA Research.
The bearish calls on markets and the economy comes amid another turbulent weeks for stocks as some traders aimed to price in a recession while others took the more optimistic viewpoint.
The Dow Jones Industrial Average (^DJI) on Thursday tanked 1,014.79 points or 2.5%. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) sold off to the tune of 3.46% and 4.31%, respectively. Investor favorites in Nvidia (NVDA) and Tesla (TSLA) plunged 6% and 7.3%, respectively.
Markets essentially dialed back their excitement after a historic day on Wednesday.
The S&P 500 exploded 9.5% on Wednesday as President Trump announced a 90-day pause on reciprocal tariffs for most countries. He cranked up the pressure on China, however, taking tariffs up to 145%. The tech-heavy Nasdaq Composite surged 12% for its second-best day on record. The Dow Jones Industrial Average shot up 7.8%, or about 3,000 points.
The about face on tariffs caused Goldman Sachs economists to reverse their baseline recession call ... made earlier that day.
Stock futures were solidly in the red on Friday.
Despite the elevated market volatility, some Wall Street strategists are aiming to search the rubble for buying opportunities. Most calls reviewed by Yahoo Finance focus on defensive stock tilts rather than buying recent dips on former high-flyers in Apple (AAPL), Nvidia, and Tesla.
"This week's stunning reversals demonstrate how quickly things can change on both the policy/macro front and for equities. Given singular updates can determine risk-on vs. risk-off, we believe a balanced approach is warranted," said the Jefferies equity research team in a note today.
"The current macro backdrop calls for a different tack than the classic cyclicals vs. defensives or straightforward factor-based approaches. With tariffs yet to be decided, significant estimate revisions may still be on the come, calling current multiples into question. Equally, given recent degrossing and better-than-feared macro data points, negotiation updates or policy u-turns can change sentiment quickly," the team explained.
"As a result, we think investors are well-advised to allocate toward both companies with less direct exposure to tariffs & downward spiraling growth, as well as beaten-down shares resembling coiled springs."
Top ideas include Coca-Cola (KO), McDonald's (MCD), Ralph Lauren (RL), Exxon (XOM), Netflix (NFLX), and Uber (UBER).
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [e-mail].