Latest news with #SevensReportResearch
Yahoo
28-05-2025
- Business
- Yahoo
Trump Branded With Embarrassing Nickname Over Tariff Confusion
Wall Street is beginning to understand the president's roller-coaster foreign trade decisions with the help of a trendy acronym: TACO—or 'Trump Always Chickens Out.' The TACO theory was coined earlier this month by Financial Times columnist Robert Armstrong, adding a catchy name to the practice of loading up on stocks when Donald Trump first announces the tariffs and then selling when he ultimately backtracks on enforcing them. In a Wednesday note obtained by Market Watch, Sevens Report Research founder Tom Essaye insisted that Trump does, in fact, always chicken out. So far, that's been true for enacting additional tariffs on Mexico and Canada, postponing his 'reciprocal' tariff plan on dozens of countries after his 'Liberation Day' announcement went south, delaying a tariff on imports from the European Union, and smashing his plan to fine China, temporarily decreasing tariffs on Chinese products to 30 percent from 145 percent. 'So, the returns are somewhat conclusive: The TACO trade has worked and buying stocks on extreme tariff-related threats has worked,' Essaye wrote, noting that the known gambit's growing popularity will translate to diminished returns. But investors aren't the only power players taking note of Trump's transparent poker face. On Tuesday, Russian state propagandists mocked the U.S. president for lacking any follow through, predicting in a tweet that Trump's 'playing with fire' threat would be reversed by a social media post the following morning. Trump's tariff proposals haven't won the U.S. too much negotiating ground. Instead, countries around the world began observing earlier this month that—rather than playing the waiting game to meet with the White House over potential trade relief—China's tough negotiating strategy with the former real estate mogul had actually gotten the eastern powerhouse a significantly better deal. The Trump administration is running out of time to secure what it had promised would be '90 deals in 90 days' on U.S. trade. In the end, Washington may be left holding the bag for Trump's outsize tariff ideas as other countries gamble that the U.S. will be the first to feel the sting of Trump's tariffs. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Trump Branded With Embarrassing Nickname Over Tariff Confusion
Wall Street is beginning to understand the president's roller-coaster foreign trade decisions with the help of a trendy acronym: TACO—or 'Trump Always Chickens Out.' The TACO theory was coined earlier this month by Financial Times columnist Robert Armstrong, adding a catchy name to the practice of loading up on stocks when Donald Trump first announces the tariffs and then selling when he ultimately backtracks on enforcing them. In a Wednesday note obtained by Market Watch, Sevens Report Research founder Tom Essaye insisted that Trump does, in fact, always chicken out. So far, that's been true for enacting additional tariffs on Mexico and Canada, postponing his 'reciprocal' tariff plan on dozens of countries after his 'Liberation Day' announcement went south, delaying a tariff on imports from the European Union, and smashing his plan to fine China, temporarily decreasing tariffs on Chinese products to 30 percent from 145 percent. 'So, the returns are somewhat conclusive: The TACO trade has worked and buying stocks on extreme tariff-related threats has worked,' Essaye wrote, noting that the known gambit's growing popularity will translate to diminished returns. But investors aren't the only power players taking note of Trump's transparent poker face. On Tuesday, Russian state propagandists mocked the U.S. president for lacking any follow through, predicting in a tweet that Trump's 'playing with fire' threat would be reversed by a social media post the following morning. Trump's tariff proposals haven't won the U.S. too much negotiating ground. Instead, countries around the world began observing earlier this month that—rather than playing the waiting game to meet with the White House over potential trade relief—China's tough negotiating strategy with the former real estate mogul had actually gotten the eastern powerhouse a significantly better deal. The Trump administration is running out of time to secure what it had promised would be '90 deals in 90 days' on U.S. trade. In the end, Washington may be left holding the bag for Trump's outsize tariff ideas as other countries gamble that the U.S. will be the first to feel the sting of Trump's tariffs.
Yahoo
07-05-2025
- Business
- Yahoo
Why the stock rally may be in trouble after the White House ‘backtracked' on tariffs
President Trump announced so-called reciprocal tariffs on April 2. - Agence France-Presse/Getty Images The U.S. stock market has already priced in backtracking on the large and sweeping 'liberation day' tariffs announced by President Donald Trump on April 2, making it difficult for the market to keep up its recent rally, according to Sevens Report Research. 'The Trump administration has seriously backtracked on the April 2 announcement, including a delay while negotiations take place and exempting major categories of imports,' said Tom Essaye, founder and president of Sevens Report Research, in a note Monday. As an example of tariff exemptions, Essaye pointed to computer chips, electronics, pharmaceuticals and automobiles. Most Read from MarketWatch The S&P 500 SPX closed Monday down 0.6% at 5,650.38, FactSet data show. That's after ending Friday with a ninth straight day of gains, which marked its longest winning streak since November 2004, according to Dow Jones Market Data. 'The reality of the past month post-'liberation day' hasn't been as bad as feared and the market has recouped those losses,' said Essaye. 'However, I do not think these events are enough to sustainably propel the S&P 500 forward and I am sticking to my general 5,100-5,500-ish range.' Investors, worried that large tariffs will place a drag on the U.S. economy while increasing the cost of goods for consumers, have been monitoring the White House's negotiations with its trading partners. But with backtracking on tariffs already priced into the market, Essaye cautioned that 'we could even see a 'sell-the-news' move once some trade deals are announced.' The White House has paused the so-called reciprocal tariffs announced on April 2, as it works on negotiating trade deals with countries. As investors wait for deals, the stock market has recently responded positively to reports that trade tensions with China, the world's second-largest economy, may be softening. Still, 'tariffs will be substantially higher than they were on Jan. 2 and that is a headwind on growth,' said Essaye. 'And at this point, the market is susceptible to disappointing tariff news.' The S&P 500 had closed Friday up 0.3% since April 2, erasing post-'liberation day' losses, according to Dow Jones Market Data. But the index, which is a measure of U.S. large-cap stocks with an outsize weighting toward Big Tech, remained in the red for the year.
Business Insider
28-04-2025
- Business
- Business Insider
Are things finally about to be normal again for investors?
Investors' fever dream could soon be over. Markets have been cast into the world of the bizarre over the last few weeks. An escalating trade war with China has led to a staggering 125% tariff on goods from one of America's biggest trading partners. Most countries worldwide were — and may still be, come July — subject to what President Donald Trump called "reciprocal" tariffs, which were calculated using a convoluted formula that sought to correct trade deficits. And Trump laid into Jerome Powell with his usual disregard for diplomatic tact, calling the Fed chair "a major loser" and floating the possibility of firing him. Despite Trump's tough talk, however, things could increasingly be heading toward a reality that resembles something normal. That's because it appears the bond market has defanged the president. On two occasions now — once on April 9 and again on April 22 — Trump has backed down from aggressive tariff proposals and suggestions that he could replace Fed leadership when Treasury yields have jumped, a signal that investors could be losing confidence in the US. Investors arguably don't have to pay as close attention to Trump's every word on trade and the Fed now that they can seemingly count on a Trump put, where he backs off extreme positions to assuage markets. "I'm not saying the tariff headlines won't still move markets, but there are hints the markets are starting to view non-political-related headlines (threats, random thoughts, impromptu answers to tariff questions) as a type of 'white noise' that just goes on in the background," said Tom Essaye, the founder of Sevens Report Research, in a note earlier this month. "And if that continues, it should help calm the intraday volatility." Another reason investors might expect a higher degree of normality going forward? Things are already just about as uncertain as they can get. Economic policy uncertainty — a gauge that tracks news coverage of economic uncertainty, differences among forecasters, and more — in March hit the highest levels since May 2020. While that sounds foreboding, history shows that significant spikes like this don't last very long, and much of the uncertainty may already be priced into stocks. David Lefkowitz, the head of US equities at UBS Global Wealth Management, said in a client note on Friday that uncertainty topping out would be positive for the equity-market outlook. "We think we may be reaching peak policy uncertainty. If so, that would be an important inflection point. Stocks tend to move inversely with policy uncertainty," Lefkowitz said. "So if uncertainty declines, it will be a key tailwind for stocks." He continued: "While we expect equity markets to remain choppy, the risk-reward for stocks is looking more appealing, especially now that we know that Trump is attuned to the risks from his tariff policies. We maintain our year-end 2025 S&P 500 price target of 5,800." Of course, there's a large caveat to a potentially normalizing market environment: the possibility of recession. Trump hasn't reached an official deal with any US trading partners to reduce his "reciprocal" tariffs before his 90-day deadline. No agreement has been reached with China, either. Plus, 10% baseline tariffs on all imports are still in place. The ongoing uncertainty for business leaders and the concrete effects of tariffs on profits, consumer prices, and spending remain to be seen. Many economists see elevated recession risks in the months ahead, a scenario that likely sends investors fleeing from stocks. But if the economy hangs tough after all, investors could soon see a return to the calmer seas of a few months ago.
