Bad Medicine and Lots of Hope Priced In
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Why did the market react to the rumored 90‑day tariff pause and what happened when it proved to be fake news?
Well, markets were momentarily excited earlier when it seemed that the president might be delaying tariffs for 90 days. But that turned out to be fake news, and it emerges that he is as determined as ever. Not worried about the market reaction saying sometimes you have to take the medicine, whilst pointing out that interest rates are down, oil is cheaper, inflation is lower. Well, you know, for now. So is there more to come in terms of market reaction if we realize that There's nothing temporary about the president's plans. Are we still pricing in hope? Well the moves today suggest that maybe we are.
Yeah, another day of turmoil on the markets everywhere for everything it seems. Interestingly, US stocks are up quite a bit now from their session low. So there was a sharp fall in early trade. Uh so the Nasdaq in the first hour or so was down five percent on the previous close. Then it bounced back ten percent from its low, uh now it's just up naught point one percent on the day at the close. The S and P a similar journey, but it It's down a quarter percent now. Uh the Dow has bounced back uh not as much. Uh it's now 0.9% down on the day. The VIX started the day at 60, got down to 46, but we are still in territory that we haven't been in since the pandemic in 2020. In Europe, stocks spent much of the day in the red, closing down 4.6% for the Eurostox 50, down 4.4% for the FTSE, 4.8% lower for the Cat Carol.
Front, four point one percent off the DAX. The Hang Seng yesterday was down thirteen percent. The Nikkei lost eight percent. The CSI three hundred down seven percent. Shares down all over the world. And the US dollar, well, it fell naught point eight percent from the previous day. Then it climbed back and it's up naught point four percent now on the DXY. The Aussie, though, down naught point nine percent today, down below ninety nine point nine US cents. Uh the pound is down one point three three percent.
How are US equity indices (Nasdaq, S&P 500, Dow) performing after the fake‑news shock?
The euro has lost a a third of one per cent. On the bond markets, ten year treasury yields are up twenty basis points, up nineteen in Canada, up seventeen in the UK, just three basis points higher in Germany. Aussie ten year yields, well they were down twelve basis points yesterday to four point oh nine percent. It looks like they've shot up now on futures to four point three one percent. So everything is very erratic, isn't it? And oil is Lower still, one point six percent off WTI, one point seven percent for Brent, which is now below sixty four fifty a barrel. It almost got down to sixty two fifty in this session, which is the lowest since early twenty twenty one. And spot gold up almost two percent around two thousand nine hundred and eighty.
It did break through quite a bit above the three thousand mark earlier on today. So that's the uh that's the movement. Another rocky session ahead, no doubt. Uh Nabs tap our strickline joins me uh it's been a roller coaster today because uh well earlier there was a story that President Trump was considering a ninety day tariff pause and the markets were well, as you might imagine, pretty responsive to that. But it turned out that it was all just fake news. Yes. Yes, uh
Phil, I was just gonna reply to you in a two word uh reply there, fake news. And fake news it was indeed. It seemed like that was a uh auto grab from an interview that Kevin Hassett had um where he was asked the question about a a ninety day pause, but he didn't give any inclination that the administration was thinking that way. But at least it was mis misreported and indeed that's what was a big driver behind the intraday moves in US equity markets there. Putting aside that fake news headline are really what is helping to calm markets a little bit, at least in terms of in terms of equities. And really it's um seems like three factors are starting to play in terms of investors' minds and it's still very, very early days here.
Uh but the first one was uh CEOs are becoming less afraid to speak out against uh the Trump administration's trade policy. And I think we mentioned on the
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Chapters
8 chapters
1
Why did the market react to the rumored 90‑day tariff pause and what happened when it proved to be fake news?
0:01–1:57
2
How are US equity indices (Nasdaq, S&P 500, Dow) performing after the fake‑news shock?
1:57–4:18
3
What global market moves (Europe, Asia, commodities) are showing after the tariff uncertainty?
4:18–6:23
4
Why are CEOs speaking out against Trump’s trade policy and could their pressure change the tariff agenda?
6:23–8:54
5
What are the three emerging signals (CEO backlash, Fed policy, negotiation hopes) that could affect future tariffs?
8:54–11:13
6
How might the US‑Japan and US‑EU negotiations influence the trajectory of the tariff war?
11:13–13:26
7
What is the “Trump put” versus the “Fed put” and how could their strike prices drive market volatility?
13:26–15:56
8
How could higher tariffs on Chinese goods, like the iPhone, impact inflation and consumer prices?
15:56–18:00