A Tariff-ic Set-Up?
A Value Sits Portfolio name that could benefit from Trump's tariffs.
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For this issue of the newsletter I want to briefly revisit a Model Portfolio name that I’ve written about extensively before, as I believe it could disproportionately benefit from an additional tailwind that wasn’t part of my original thesis, namely the volatility and trade uncertainty arising from the Trump administration’s global trade tariffs.
On Wednesday, Trump announced a range of sweeping tariffs which proved to be worse than expected among market analysts and commentators.
My imagined view of how many market participants and politicians were feeling on Wednesday night.
Unsurprisingly, equity markets reacted extremely negatively to the tariff announcements yesterday, with the SPX falling -4.8% and the NASDAQ down -5.97%, making it the worst day for both benchmarks since the COVID crisis. The sell-off has continued into today, with the SPX now down almost -9% and the NASDAQ down -10% since Wednesday’s close, as of the time of writing.
Despite real fear of a global recession taking hold across markets as a result of the tariffs, the new economic trading conditions they create may prove to be a source of opportunity for this particular name in the Model Portfolio.
So lets revisit this name and consider what could go right for it in the months ahead…