Markets have tanked following President Trump’s announcement of sweeping global tariffs yesterday. The S&P 500 and Nasdaq experienced their worst day since 2020, and the small caps index, the Rusell 2000, has entered Bear Market territory.
In this special edition of Rise Up!, we bring immediate reaction and expert analysis from Peter Boockvar and Scott Schwartz of Bleakley Financial Group.
Join hosts Terri Kallsen and Joe Duran from Rise Growth Partners and our guests as we break down:
- Why are markets reacting so violently to Trump’s reciprocal tariff announcement
- The broader economic consequences of these tariffs in the U.S., from supply chains to recession risk
- Whether this tariff shock could trigger a global recession
- Which sectors and stocks are getting hit hardest, and if now’s the time to buy the dip
- Safe havens like gold, treasuries, and cash: are they back in favor?
- How investors should position themselves in the face of rising economic and market uncertainty
This is one of the most consequential days for markets in years. Don’t miss this timely and insightful conversation about what it all means and how to position your portfolio now.
Recorded LIVE on April 3rd, 2025.
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Terri Kallsen 0:20
Good evening and welcome to another special edition of rise up. We’re coming to you live today after what has been one of the most challenging days, the biggest market route in five years, just hours after President Trump revealed his plan for reciprocal tariffs hitting just about every US trade partner investors, sent a very important message. The Russell 2000 right now has sent a very strong message. We’re already hitting bear territory. The markets ended the day somewhat better than the S and P ended 4.84% settled out at 5396 the worst day since June of 2020, I’m Terry Colson. I’m the managing partner here at Rise Growth Partners. I’m a certified financial planner, and I’m your co host today to share with you some things that we can work on to not only grow your portfolio, but protect your portfolio. And I’m here with my co host, Joe Duran, who is also a managing partner at Rise growth and a chartered financial analyst, which will come in very handy today, but Joe, before we get started, I always try to bring just a little bit of levity to one of the most challenging days we have. And, oh, by the way, nice piece of art behind
Joe Duran 1:37
I’m at a hotel because I’m on my anniversary, a 24 hour trip with my wife, 32 years married. You know what that’s like? Terry being married for a good long time, and I’m just very, very fortunate. I could have had a better day with what’s happening in the markets, but here I am. This is not my art. This is Scott was saying earlier. Looks like something I could draw. But anyway, it seems like an interesting backdrop. I think it reflects some of the chaos we’re seeing in the market. So I think you’re gonna have a very important discussion today. Terry, obviously, Joe,
Terri Kallsen 2:09
I do have one joke for you just to get started. You know, what did the import say to the tariff on Liberation Day?
Joe Duran 2:17
How much are you
Terri Kallsen 2:19
almost you just can’t hold me back anymore. So there you go. There’s there’s always, what I think is a pretty tough day. But we also have two more with us today. We have Peter Bucha, this Chief Investment Officer at Bleakley Financial Group. And then we have Scott Schwartz, who’s also a Certified Financial Planner, a managing partner, a founder at weekly Financial Group, and so
Joe Duran 2:45
we have two CFAs and two CFPs, so we can analyze the market and then tell you what to do about it, which is great combination
Terri Kallsen 2:51
to help home our viewers out there. So Joe, let’s start with you. What are some of your thoughts starting out today?
Joe Duran 2:59
Well, listen, we’re not going to touch politics here. We’re going to just talk about the facts of what’s happened and why was the market a little bit taken aback, and what should you do about it going forward? That’s what we’re going to focus on today’s show my impression, and I think that everyone has said this, the the amount, the dollar amount of tariffs that are being applied were much more than anyone expected. As you know, as a former partner of Goldman, and even they agree this is more than simply evening the playing field on a tariff basis. Had it been that, and had it been clear, I think we’d already priced in quite a significant decline already, and we were expecting basically retaliatory tariffs that everyone would equal what’s happened. What is, in essence, changed, is that it’s no longer about retaliatory tariffs. The calculations are being done based on budget deficits with each country, trade deficits. So we obviously buy and sell with all these countries. Yes, there are tariffs, but there’s also trade imbalances, we buy more things from China than they buy from us, and that is different than tariffs. That is a by a scale of three to four times. And that’s having an impact in how we assess what the implications are if everybody puts up big trade walls. We’ve not seen this for 100 years the magnitude and the dollar amounts that we’re talking about. And just to put in perspective Trump’s first cycle, the tariffs were applied to about 200 and 350 billion in assets. So no no small amount three 50 billion, this affects three and a half trillion in in assets. So the quantum of tariffs is 10x on the on the goods. And it the first, last time we had tariff increases of this magnitude, this quickly, was 100 years ago. And so again, we don’t know what the implications are. We’re going to talk a lot about that today. And clearly, this is more than simply evening the playing field on a tariff basis. This is about evening the playing field on a buying and selling basis from each country. And that’s a very important aspect, because it means that we really have entered a trade war, not just a negotiation period, if that’s holds, which, again, as we know, it’s not always predictable. And you know, I think I’m super interested, Peter, I know you’ve already had a really interesting take that I watched earlier. I’d love to get your thoughts on how you interpret what was said by the administration yesterday.
Peter Boockvar 5:35
Well, I’ll just add to what you said in terms of the purpose of what was announced yesterday, it’s also, of course, to encourage domestic manufacturing. There’s a big belief in the White House that we seeded a lot of our manufacturing presence to China and to other countries over the last couple of decades, and we need to start recapturing that and bringing it back. But then that begs the question, is that really an attainable goal? Yes. Can we make some more cars here? Can we onshore some more parts? But are we going to start making iPhones here? Probably not. Are we going to start making sneakers here? Probably not coffee, bananas and other agriculture products. We just don’t have the capabilities that that foreign countries do, but it’s that attempt to add to our manufacturing base, when we know that that’s Trump’s political base, and we want to try to help these people. You know, the question is, is tariffs? Are tariffs the most effective way, and is it going to be worth the risks of implementing it? Are the benefits going to accrue to us, and I think that that’s going to be the big question here. Of course, any benefits we do get is going to be for many years down the road. Because even if you wanted to build a new plant in the US, it’s going to take three to four years to even get it done. And any manufacturer who’s thinking about it will want to wait to see how sustainable this this policy is because if they could pull back in terms of the terrorist tariff rates, that can mix any plans, if we get a new Congress next year, does that impact things? Are there going to be lawsuits contesting the use of tariffs? Because, is there a national emergency, or is it not so? There are a lot of confusing factors here, and we’re sort of just left with our hands up not knowing how to react, because I don’t think even the administration fully knows where it’s going to go from here in terms of the negotiations. And
Joe Duran 7:34
I guess one thing I’m struck by is I’m happy you did this, the range of possible outcomes went from this to this because of the size of the tariffs. So now, while we were thought was pretty unpredictable two days ago or last week, when we talked about this, our special recording we did a couple days ago because the tariff scope is so large, the range of possible outcomes is significantly greater good and bad, but especially the potential bad ones. And Scott, you’re dealing with clients every day. I’m curious how you view this as you think about the possible outcomes on the investment side, and we’ll talk about planning in a second. But how do you think about that?
Scott Schwartz 8:18
It’s funny, you talk about the broad, the wide range of things that could possibly happen, in my mind goes to 2008 and my mind goes to 2020 so 2008 we’re all watching what could have potentially been the collapse of the US banking system, right as we were watching the headlines, kind of like today, this crazy, You know, what could happen scenario, and then in 2020, we’re faced with a pandemic that nobody really understands how far it could go, how deep it could get, and what could possibly happen. So you know, when you get to times like this, where the headlines are so daunting and the possible outcomes are so huge, people get very, very uncomfortable. What I found, I look back at what we did in 2008 what we did in 2020, what we will do now is understand that you don’t panic, you don’t sell. And again, I mean, Joe and I, we talked about this before. Might not this. It’s probably not the time to go and start buying either. This is the time to be patient and be mindful. Make sure you’ve got enough liquidity. You should, you know, when people call and say, What are we going to do about this? Well, the answer is, we’ve already done it. Our clients have enough liquidity to get through the next three or four years. Irregardless, we’re not going to be sellers in a market like this. We’re be patient things. Step down a bit. We might get an opportunity to buy some more. But you know, we’ve been here before. This is going to be messy. It’s not clear. You know, it looks like they’ve not done a great job here. You know, they maybe they’re trying to do too much. I don’t really understand what, though. I don’t think anybody really understands what they’re trying to do completely. But at the end of the day, yeah, we’ve got an ugly market here. We’ll have to wait and see what happens. You know, I’m 10. Be optimistic in general, but if you’re liquid enough, you hang on. We’ll get an opportunity to put junction to buy here a little cheaper. We will. Things will recover. It look like the end of the world, in a way, it wasn’t look like the end of the world in 2020 it wasn’t, I don’t think this the end of the world either. I think it’s just
Joe Duran 10:16
a big difference here. Peter Terry, I think we’ve all been around long enough to know that 2008 was an 18 month period of uncertainty because the banks the implications of the banking system and saving month 15% decline, but it took 18 months to settle up because it was a secular change in the system, right where COVID was a shock. It could have been secular, but the governments, the Fed, stepped in. We got through the pandemic, and it really only lasted three or four months, and then business as usual was happening online, which was remarkable, and actually increased productivity. So I agree with you this, if you think about what happened to me? I was thinking about the parallel with 1999 and 2000 when the we had the bubble burst. And that happened here. We had the bubble burst a little with AI, and then that was followed by Enron and the Great Recession that a really significant decline that broadened out, but over the course of 18 months, so went down, recovered, and then we had an actual recession. And it wasn’t that initial bubble burst that caused it, it was the recovery and the fixing of the of the mess this one, Peter and Terry, I know you’ve both seen this as well. So I guess the most important question, Scott, as you were saying, the end of the selling is not the beginning of the buying if you have the a more protracted decline. Terry, you’ve been through this, obviously, and I’d love to just get your thoughts. How should you think about it differently? If it is a quick whip snap? Is that likely? And should you more think about this as a planning question of how long might this last? What should you do as a consequence, especially if you’re retired.
Terri Kallsen 12:01
Well, certainly if you’re retired, hopefully you’ve rebalanced based on your risk tolerance, right? And you know, one of the things we do plans is we talk about, how much risk can you actually tolerate? A 20% drop, a 10% drop, and hopefully you’ve had that conversation with your advisors. If you haven’t, I’d really encourage you to go to wealthion.com and do a portfolio review, because your risk tolerance right now and your behaviors as a result of that is really important. But in general, what we really try to educate and help our clients is calm the storm. Let’s see what’s happening and then work with your advisor to figure out what your next steps may be. This is not the time to sell. This is not the time to buy, because we’re still trying to figure out. And Joe, I think the difference of what I saw in 2008 and 2020 is, how do we contain this? What’s the containment strategy out right now? There’s so much uncertainty, there’s really no step to try to contain this, not only domestically, but globally. And so this is the time where we want to really think about it and talk to our
Joe Duran 13:10
financials. You don’t really find a bottom till you’ve at least wrapped your arms around the problem, right? And Peter, we don’t know. We don’t know what our countries are going to do, like they’ve they’ve literally had not even 20, I guess, 24 hours now to sit on it. We don’t know what they’re going to say in return. I know the Australian Prime Minister said, this is like the Russian invasion of Ukraine. That was his response. But what do you think? How long before we have a sense of like, okay, this is what this all means. Is this a days? Is it weeks? Is it months? What do you think?
Peter Boockvar 13:41
Well, the one of the things that was said yesterday was that the tariff, the new tariff rates, would kick in on April 9, so we do have a week to hope that a lot of it gets pulled back and we actually see sort of true reciprocity, where one country’s tariff rate will be the equivalent of hours. So I guess that’s where the hope is. I think one of the complicating factors here, past that is, if these remain, is what’s the retaliation? Because we’re all waiting to see, not just from a tariff perspective, but also from an investment perspective. One of the most interesting responses in the market today, outside of the stock market, in the bond market, was the dollar on paper. One of the mitigants to putting on tariffs on other countries would be that your dollar would appreciate to mitigate the impact of that tariff. The problem now is with the dollar weakening to the point where the dollar index is actually below where we were on november 5, is that US consumers and US businesses are going to end up paying this tariff where they they logistically pay it, but there’s no offset from a stronger dollar, because now the dollar is weaker.
Joe Duran 14:58
In fact, if it’s weaker, it’s got. Double inflationary, right, right? So
Peter Boockvar 15:02
we are now going to absorb this, which then to take this one step further, we’re complicating the job of the Federal Reserve. Does the Federal Reserve respond to the threats to economic growth from this by cutting interest rates, or is the possibility of inflation pressures going higher and sort of a stagflationary type environment. Do they just stand pat? But they’re just confused as the rest of us. They’re just waiting to see how these this thing plays out, like the rest of us, but unlike the other time frames that we just talked about, the Fed is much less relevant and much less able to respond to some of these threats to the economic growth,
Terri Kallsen 15:46
that’s right? And, you know, I would really like to hear your guys’ perspective on European exceptionalism, right? We heard that term last week. We’ve seen more and more investors looking at global opportunities. Does that still exist? Or are there opportunities there? Peter,
Peter Boockvar 16:01
no, I think they definitely exist. I mean, that’s one of the most interesting things about this year so far, is that investors shifting out of the mag seven trade has found homes outside the US, particularly Europe. And it’s not just a rotational thing. There’s also a fundamental belief that a lot of fiscal spending, whether it’s on defense or in Germany infrastructure, that Europe is going to get their their stuff together in terms of trying to generate economic growth and realizing that they’ve smothered their economy with bureaucracy and red tape, also with with with the trade war, if they start to take some of their money back home from the US and take it domestically and invest it there, that could also lead to some growth. So the European outperformance has the potential of being more than just a one quarter thing. Now, if we go into a global recession, if you know, no one’s going to be immune to that. But I do think Europe has the possibility of maybe outperforming the US, after many years of underperformance where European markets were just sort of a wasteland of investing, and the US was where it was at.
Joe Duran 17:14
I mean, look, what’s interesting to me is we represent about 12% of global trade the United States, and by putting up walls around us, we’re encouraging all these other countries, the other 88% of global trade, to work with themselves. So what? Who’s going to fill the void that that we are choosing not to step into? Well, the German car companies are going to step in where the US used to be, the Chinese manufacturers are going to step in where the US used to be. So I’m a little concerned about the fact that the Europeans are going to ultimately lean into this and take advantage of the gap that we might create. Again, it hasn’t happened yet, but it appears like we’re going to be having a very interesting and and really, for the first time in many decades, an adversarial position with those folks who were our allies, and not sure. Again, I think to go back to the what the Fed is going to do, Peter, I think it’s a very interesting question whether they’re going to focus on inflation or focus on recession, but the likelihood of stagflation, which we’d talked about a few weeks ago, because the economy was softening and inflation was a little harder than we would like, well, these acts increase inflation expectations and absolutely reduce economy so if we had stagflation possibilities, it’s actually, I think likely a now, right? Yeah,
Peter Boockvar 18:43
it really freezes them. And what we’ve seen since the Fed cut 100 basis points starting last September, was long rates actually went up in response. So if you know when, if you’re the bond market, you’re really more focused on inflation. So if you see the Fed cutting rates in response to growth. It’ll be very interesting to see how the long end of the curve responds to any Fed rate cuts, but the commentary that we’ve heard from Fed members over the last couple days is more of that wait and see, because they can’t get ahead of their skis either, until we see how the negotiations sort of take place and what is the final result of of all these tariffs that have been proposed?
Terri Kallsen 19:25
Yeah, I just want to also emphasize for our viewers that, you know, it’s all not all doomsday. There were a couple stocks that were up today, things like Coca Cola was up three and a half percent. Johnson and Johnson up almost 3% Verizon Communications, there must going to be a lot of people on their cell phones moving forward 2.67% and we’ve talked before on the show about the opportunity in healthcare. United Healthcare is up two and a half percent. So Scott, when you’re working with clients and they’re looking at their 401, K, and they’re looking at their investment portfolio, you know. And they’re seeing doomsday. What are some of the things that you can tell them to understand what might be happening, what behaviors they should change? Well,
Scott Schwartz 20:08
we try to focus on the idea that we had a plan coming into this I was on with a client of mine this morning, and she wasn’t calling me to panic. She was calling because she had just been to her account, and we were trying to figure out what her final taxes look like. And she was looking for a little liquidity to make a tax payment. And I pulled up her account. Through yesterday, she was up almost 2% now tomorrow we’ll probably be down a little bit, given what happened in the markets today. But again, you prepare for things like this in advance. You have enough liquidity. You’re well balanced. Non US equities have but perform better. You mentioned healthcare. I talked to David Mandelbaum, who runs our healthcare plan for our clients. Today, he was done 90 basis points today. You know, healthcare stocks held up pretty well in this market today, because the drug companies are exempt from the tariffs. You’ve got some other good you know. He’s got McKesson, which is more of a domestic, you know, firm so it doesn’t have all these tariff issues. Healthcare isn’t as expensive, relatively speaking, like non US equities Europe is not as expensive, so they don’t have as far to come down as some of these big tech names. But again, it’s about stick to your plan. Don’t panic. You’ve got enough you know, you’ve got enough liquidity. And look for the opportunities. And again, not today. This isn’t the opportunity. Nothing’s really happened yet. Be patient, but you might get a chance when you’re really, really scared. That’s you go in and buy some equities. This thing will pass. It might take longer. It might take 12 months. It might not snap back in a month or two. But if you’ve got four years with the liquidity, does it really matter what happens in the market in the next 12 months? I would argue it really doesn’t. It’s more of a buying opportunity at some point that that’s how we do it, right?
Terri Kallsen 21:46
I think this is a good time to revisit some of the thoughts we’ve shared in the past, and that’s really having emergency funds, right? Six months of living expenses already liquid. So that should be something you can use in the meantime. You know, six months to 18 months of additional cash that you might need at some point, and then you’ve got your investments that you may not touch for another seven to 10 years, potentially depending on your life stage. And so again, if you if you haven’t done these things, now might be the time to take action and have your emergency funds and your liquidity. So you know, as we go through and provide actionable advice, hopefully you’re working with an advisor to make these things happen. I wanted
Joe Duran 22:26
to just add so one thing, just to be careful here, I obviously we’ve all had our TVs on watching CNBC as we’ve been doing our meetings and everything. And I just caution everyone, I know that a lot of financial professionals saying, buy the dip, buy the bed dip, go buy this. Go buy that. And I would caution again, a buy the dip is really fine when you have a secular bull market in the midst, but it’s very dangerous when you’re going through a modest transition. So I agree completely, you don’t want to do anything rash. You certainly don’t want to sell after the markets have already fallen, but you want to be careful trying to buy the bottoms. And I would suggest, again, we saw the vix index, which we talked about before, as a good gage of when you hit panic levels. We hit for the first time in a long time, 30 today. So it’s VIX. You can look at that up, I think with a big decline, you want to see it hit 35 to 40. That would give you at least a temporary bounce, and don’t get sucked in, because we are very oversold now, you’re likely to see a lot of bouncing around, and you don’t want anyone to try to time this market. That just really won’t work. Because again, I remember in the nine in the late 90s, early 2000s everyone was so trained to think that every decline was a buying opportunity, and sometimes there’s just a lot of bouncing around. So again, don’t try to trade around the kind of noise, because, as we’ve all said, We don’t know exactly what we’re dealing with, yet, once we have arms around the challenge, then we’ll figure out how the US will respond to which will be effectively, no doubt, but we don’t know yet how big the challenge is going to be. And so again, it’s being just, just being careful and thoughtful, with good advice about how to do that. Keep
Terri Kallsen 24:17
listening to us. We’ll be with you every week as we go along. But I want to just, you know, we’re live. This is new, and we do have a question live from the audience, so I want to make sure, thank you for the question, Rick. But his question is, do you think the Fed will ever allow deflation? Joe, can you give us your perspective? It’s
Joe Duran 24:36
not, but we’re a long, long way from worrying about that like the underlying inflation was still too dangerously near 3% this is absolutely going to increase pricing, at least in the short term. That’s inescapable. It might also, by the way, give a short boost to GDP, because people go buy all the French wines they can buy and the you the cars they can buy that haven’t yet been marked up. So you might. See a strange pop in GDP, but that’s temporary as people adjust to the new pricing. So for things that have not yet increased in price, but if it stays and again, that’s a big F, which nobody knows yet, I think deflation. No, the Fed does not want deflation, but you need to have oversupply, and you need to have free trade and a lot of competitive pricing and and a lot of labor, none of which we have right now in the US. I think, I think it’s very, very unlikely that we will be talking about deflation for a time to come, at least, my opinion,
Peter Boockvar 25:36
yeah, I agree with you, Joe. I think the Fed, their their first focus right now is where the unemployment rate goes, that there are too many price pressures out there to see deflation. And, you know, getting past what happens now. You know, not all deflation is bad. You know, technology deflation is good, but I think that deflation is just way well off the radar. Uh, just a question of how much price pressure to the upside that we get.
Terri Kallsen 26:05
Yeah, we have another, a live question from Sir XRP, as the US start. XRP, yeah, I love that name. Uh, leading their decline in trade. So the US starts leading their decline in trade. Nobody will pay more. The question is, what country will take over, the former US leadership in business? Scott, what are your thoughts there? I
Scott Schwartz 26:29
just feel like guys this, you know, might might be terribly bungled, this whole rollout. It is, you know, perplexing, right? How broad the scope is from where they started, and what the intention probably was, just, don’t know if it’s quite ready to kill. You know, the US as a leader in a business here, I think we got to wait and see how this whole thing plays out. I just, you know, I think it’s going to be a little messy for a bit, but I think we’re, we might be a little premature with that thought.
Joe Duran 27:00
And I would just say there’s a difference between products and services. The US is the preeminent leader in services, intellectual capital thinking strategy that is not going away, like firms like Google and Amazon, those firms that lead thought leadership around the world, that is not going away. There’s no one stepping into those shoes. We, at least for the time being, continue to be the world’s innovator, and that doesn’t change, because we put tariffs in intellectual capital flows quite freely, and we are the creators of that intellectual capital, products and services. We’ve been on the decline for years. China took us over years ago, as far as products go. But the big question is, do we continue to consume? Because what allows us to have a very strong dollar is we are the world’s main consumer, and so as long as we spend, and I suspect we will, it’s yeah, we wouldn’t call the end of the US, but certainly our the way the world works around us will be different if we aren’t as open to trading, and they drop tariffs against with each other, but leave ours high. That’s it puts us just in a position where we’re no longer consuming everyone’s products, and the fact that we do is why the dollar keeps going up and why we’re the world’s reserve currency. We have a lot of advantages and some real disadvantages to being the consumers that we are, because we drive and dictate flavors and tastes, and that will continue, but we also spend our money in the rest of the world, even when we’re shopping locally, and that might change. But our ideas, our innovation, the way we affect and really think about entertainment. The whole world responds to us athletes, to our sports, to our intellectual capital, to our entertainment and our music. So anyway, that’s
Terri Kallsen 28:52
right, Joe. We have another question from Michael Hedman, what if the EU does not retaliate with high tariffs, but China does come back with higher tariffs. Peter, would you share your perspective?
Peter Boockvar 29:06
Well, China doesn’t have, I mean, they’ll, they’ll, they’ll retaliate. There’s no doubt they’re not going to President Xi is not going to take this line down. I think they’re more focused on on the type of tariffs and retaliation, rather than the quantity they’ll try to pin us on where things hurt, where we have no choice but to procure certain things from China rather than anything. Because on a trade basis, it’s they, they sell much more to us than we buy from them. So on $1 basis, they wouldn’t that be that impactful. But in tariffing rare earths, for example, or or pharmaceutical chemicals that we desperately need, or solar panels that we desperately need, that is where they potentially could respond. But the hope is that we’re really not going to put a 54% tariff on China. China, because it would take a $1,300 iPhone and make it $2,000 I don’t think there’s anybody in Washington DC that wants to explain to their constituency that they’re going to have to pay $2,000 for an iPhone. So I think there will be a level of negotiation, not just with China, but across the board. But you know, these are the things that we have to start thinking about every single contingency, and not just us as investors. If you’re a household Joe talked about earlier about buy your cars now, buy your champagne. Now, everyone is thinking and responding to these tariffs. In fact, the March auto sales in the US were the highest in many years because everyone was rushing to get product before the price would go up, ahead of tariffs. And
Joe Duran 30:43
I’ll just add to that, the Chinese can respond in two distinct ways. One, really put tariffs out for the things we really want. We really have no choice. We’d get. I think it’s something like 70 or 80% of our pharmaceuticals are created in China, which we desperately need that that is something they could do. That’s a poke right in our eyeball, which will not feel good. And the second is retaliate against our US. Companies really go after Apple, really go after Tesla, again, not that they will, but they could, and they know that. No, we’ve millions of investors and all of those companies. So those are targeted, painful things they could do. And the thing we should all expect, their president has that they there’s he has no desire to look weak. That’s the one thing with a lot of these leaders in foreign countries, but especially in China, they cannot look weak. So that doesn’t mean there won’t be negotiations, because they will be, but everyone’s going to have to look like they got what they needed.
Terri Kallsen 31:49
Those are great questions from our viewers. Thanks, you guys. Now let’s make sure we take a look at what we should be looking at for next week. We’ll continue our Tariff watch. We’ll also look at what countries are doing to retaliate, as you said, and we could also look at our president and how he may or may not be adjusting his decisions. Joe, what’s the best case scenario? Well,
Joe Duran 32:10
there’s one thing we should add to that list, which is, we’re about to get earnings reports. And so what I’m really looking for is, when they announce these companies say, this is we have no transparency, but this is what we think could happen, which hopefully they’ll start doing the work already. Does the stock go down or up? That’s going to tell us a lot about the state of how much has been priced in we saw today, Scott, you were pointing out a 40% drop in Restoration Hardware. Well, when they talk and they say this is what we’re seeing when they do their earnings announcement the next few weeks. Does the stock go up or down? Because that’s when we get near our bottom. It will be when people do announce bad news, and the stock no longer goes down. As long as stocks continue to go down with the announcements of news, that means we’ve not yet priced in across the board, what the adjustment? And so I’m very interested in that for next week. I think this is all about tariffs. And if we start to hear any softening, if we start to hear other countries coming to the table and getting some deals done, I think that will at least create the possibility of daylight. But I don’t think we’ve yet seen the panic selling. I don’t think we’ve yet wrapped our arms around the magnitude today, the administration’s been very vocal. We’re not open for business. We don’t want to talk with anyone. We’re getting some payback. That’s the language that the administration is using. If they soften that just a little, the market will appreciate it, but again, we’re overdue for a bounce. I don’t think it’s tomorrow, but it’s probably a turnaround day sometime next week. I just don’t know how much would mean until we get some clarity about the magnitude of issues. So for me, next week is hopefully at least we’ll start to get a little bit of a shift in tone and discussion, and it starts being more of a conversation about how we’re going to work together to solve this rather than we’re not moving.
Terri Kallsen 34:04
Yeah, another thing we’ve been waiting for that we should get next week is March, ppi and CPI data and Peter, I’d love to know what your thoughts are. How important is this relative to what’s going on with tariffs? Well,
Peter Boockvar 34:16
the inflation data has become the most important data that we have gotten CPI especially. But I think with everything that has gone on this week and the possibility of all these tariffs flowing through into prices, any deceleration in CPI would potentially be looked at as old news. It’s what happens over the next couple of quarters, with respect to these tariffs flowing through into prices that are going to be most relevant. Just to echo what Joe said in particular next Friday, when the banks start to report, you know, the beauty of those earnings reports is banks speak to a lot of their customers, small, medium, large sized businesses. They get to hear firsthand how they are managing three. Through everything that’s being thrown at them, so it’ll be very interesting to get feedback on what they have to say on that.
Terri Kallsen 35:07
And the other big report next week is the Fed’s March meeting minutes. And again, how important is this relative to tariffs, and if the Fed does consider dropping rates, you know, should people start taking advantage is that through car loans or mortgage loans, Scott What are you telling your clients?
Scott Schwartz 35:24
Well, when you think about rates and mortgages in particular, they typically trade off the 10 years. So even if the Fed does reduce rates, it won’t probably have that much of an impact, right again. I mean, what we’re trying to tell our clients is, be calm. You know, our clients, fortunately, are well planned for things happen, right? So we’ve got plenty of liquidity. They own good assets. Are well diversified. They’re not, you know, their portfolios are not down enough to even be concerned yet. You know, let’s see what happens next week. Let’s see what happens the week after. We’re really just trying to tell our clients to work their plan. That’s what we have when we’re to keep working our plan. And, you know, we generally things generally work themselves out. We tend to be more optimistic here. And
Joe Duran 36:09
I’ll just add we’ve gone through a 15% decline. So I just You should not we all go through what we’re experiencing and interpolate that into the future recency bias, so just we’ve already processed this much decline, so things have to be worse than that for it to continue going down. Now again, that doesn’t mean we found a bottom. It doesn’t mean we don’t have another five or 10, but it’s not unlikely that we’ve already suffered more than half of what we’ll ever experience in this adjustment. So if that’s true, we are where we are with one thing I’m certain of is, in a few years, this will be an experience we’ll all have shared, and the economy will have found its footing. We have the most resilient and adaptable economy in the world with some of the smartest people in the world, and we’re the envy of the world. But again, that doesn’t mean it’s always a straight line, unfortunately,
Scott Schwartz 36:59
so, and I had one thing to that show. As I look back on my business, and I’ve been doing this for 40 years, the people that get hurt Are always the people who panic, right? The people who sell when things are down. You know, I had a conversation with a client of mine yesterday looking at their portfolio before the call. I thought she’s their five year performance doesn’t look as good as everybody else is. I dug into numbers a little bit. I looked back at my notes, and I realized that in May of 2020, my client called me. They wanted out of the market. I talked them into only selling half their equities, and it was a challenging conversation, but even keeping them half their equities in the market, it’s still Bondo costing them six or 700 basis points. Because you remember, in May of 2020, the market sort of hit the bottom. We were down about
Joe Duran 37:46
like a springboard, yeah, six to the
Scott Schwartz 37:49
year 20, you sold out those equities. You did not catch that recovery that just didn’t hurt your returns in 2020, that hurt your returns for the next five years, right? Absolutely,
Joe Duran 37:59
your lifetime, right? Like your whole retirement, looks different. Everything
Scott Schwartz 38:03
looks different when you do that. So again, you know, you missed eight or 10 days in a five year period, right? And it’s very, very easy to bail when things look bad, like they do right now with all this uncertainty. But when do you get back in so again, you stay you stay the course. You look for an opportunity. It isn’t here yet. I don’t think, like everybody said, that if things get really bad, you really you hold your nose, you buy some otherwise,
Terri Kallsen 38:31
yeah, that’s right. So you know, thank you everyone for watching today. This was a special edition, a live edition. I hope that you hear from Joe, Scott, Peter and myself that this is here to help you and to help calm your nerves during this time. So I’d invite you back next week as well, because we’re here to help you grow and protect your portfolio. Now if we’ve sparked some interest in this, I’d like you to go to wealthion.com, backslash free, and do a portfolio review and get the advice that I think you’ll need as we continue through these next several weeks, I want to thank Joe. Scott Peter, thank you so much for sharing your thanks. Happy anniversary, Joe.
Scott Schwartz 39:15
Bye guys. You
