23-07-2025
Stock Market Too Focused on Goldilocks Outcome
With about one week left to negotiate, by my count the Trump administration has struck four trade agreements in its push to reset the trade relationship of the US with the rest of the world.
Reports on Wednesday suggesting a deal with the EU may be close could make it five. Still, that's not the 90 that the US Commerce Secretary promised three months ago.
Markets have tended — except in the initial panic after the president's April 2 tariff announcement — to act like we'd arrive at a good place in due course — the Goldilocks outcome.
With the Aug. 1 deadline right around the corner, I still see that as just a tail-risk -- one that is unlikely -- and I'll explain why below.
But let's suspend disbelief first and and examine what that (not-impossible) Goldilocks scenario involves and what it would mean for markets.
