Bloomberg Audio Studios, podcasts, radio news.
It has been a wild few weeks in markets. In late February, the Nasdaq one hundred index hit another record high, topping out months of gains that followed the election of Donald Trump.
There really was sort of a sugar rush across Wall Street, even across Main Street with a lot of retail traders, and there was this excitement in certain corners that deregulation, low taxes, in embrace of cryptocurrencies would really boost markets and would boost the American economy.
Charlie Wells covers Personal Finance for Bloomberg, and he says that now that picture is changing because those gains that followed Trump's s election, well.
They have been entirely erased. So from the moment that he was elected until now, we're really seeing a reversal.
There By last week, the S and P five hundred had wiped out all the value it's added since election day, three point four trillion dollars worth. The Nasdaq one hundred tumbled around three percent Monday morning, extending a selloff that's put it into correction. Territory investors were watching over the weekend. When Trump was asked on Fox News' Sunday Morning Futures about the possibility of a recession.
I hate to predict things like that.
There is a period of transition because what we're doing is very big recession predictions. Aside, the market volatility is expected to continue as investors struggled to price assets in a new world order created by the administration shifting tariff plans for China, Canada, and Mexico.
So there was that idea of the Trump bomb, and now there's a sense that people might need to prepare for a Trump slump.
I'm Sarah Holder, and this is the big take from Bloomberg News today on the show. Is the Trump bump becoming the Trump slump? And in an era of market whiplash, what do experts say you should do with your money? The optimism boosting markets after the election has started to give way to pessimism. So I asked Bloomberg's Charlie Wells to explain the shift. How much of this current volatility is about Trump's tariff plan and how chaotically it's been rolled out.
Yeah, so, Well, a lot of the more recent selling off that we've seen in the market does have to do with Trump's tariff policies, and on the campaign trail he talked about tariffs. It almost sounded as if he were kind of using tariffs in his second campaign, that he was using the wall and building the wall in the first campaign. It was the sort of panacea, a kind of thing that would you fix the American economy, it would fix drugs, it would fix crime, et cetera.
And if you kind of zoom out from the Base to Wall Street, a lot of people sitting at those trading desks weren't taking those threats of tariffs seriously. They really thought that the bark there would be louder than the bite. But what we saw was that Trump was pretty serious. So when those tariffs came into effect, you saw a deep sell off, But then you had indications from policymakers that, you know, maybe there would be reprieve.
We ultimately saw a delay on a number of those tariffs, and so that created this kind of like jagged line in market charts, and that's where a lot of the volatility most recently has been coming from.
Did Trump delaying imposing tariffs on Mexico and Canada until next month offer any market relief.
Fits and starts? I would say and I think this gets at a bigger issue that we're not really hearing from CEOs right now. I think there's a lot of concern in corporate America about saying anything that could target them, and that could target them in the eyes of Trump. But what we know about executives is that they like certainty.
They like to know what's going to happen, because they are making orders so much further in advance, and a lot of consumers are thinking about and if they suddenly think there may or may not be a twenty five percent tariff on the goods that they use to make their products, it's going to be really difficult for them.
You know. Trump has said his decision to change course on tariff's at least momentarily didn't have anything to do with the negative market reaction we were seeing. What do you make of that?
Yeah, I mean some of the timing on this was striking. I think, you know, we saw a sell off, and then very soon thereafter Trump talking about how he doesn't pay attention to the market. But one of the things that people in DC always say is that Trump uses the stock market as sort of a live opinion pollar barometer of how well he's doing. He really, you know,
sees it as incredibly important. I think it's tough to say, though, how much the performance of the stock market would be influencing his kind of tit for tat kind of swings on policy. But you know, I think we also need to make the broader point that this isn't just Trump, right, So this does have to do with the fact that the market has been doing so well, and over the past few years, we've heard people talk about, you know,
a correction coming. We have heard analysts, you know, across the board talk about how in particular, tech was just overvalued and that there was so much optimism about AI in particular that at some point, you know, there could be a pullback. And I think that is something that's
also kind of been in play here. And so over the past few weeks, tech companies had been reporting earnings and Wall Street had really been hoping to see incredibly strong growth here to kind of meet the expectations, and that just wasn't met.
Right we saw with the release of China's Deepseek AI version just a few weeks ago that caused another huge market reaction, erasing a lot of the games that tech had.
Made exactly, and that was this idea that you know, a lot of the mag seven companies, a lot of tech companies have been spending so much money on AI investments, and along comes this kind of cheaper Chinese alternative that might not require as much spending, and so that took some of the wind out of the sales of these tech companies that really have been propelling the markets over the past two years.
I want to take a closer look at some of these market swings we've been seeing across stocks, bonds, crypto. Where are we seeing the most volatility and where are we seeing the most stability.
Yeah, so you're seeing a lot of volatility and some of these riskier corners of the market. I'm thinking about particular cryptos. I'm thinking about stocks that traders love to short. And you know, before the market sentiment shifted a few weeks ago, there really was this kind of risk on appetite. There was a sense that things could carry on and that money could be made in this Trump infused environment, and that's where you're seeing a lot of pullback. Bitcoin.
You know, you're seeing a huge tip there, but also the Nasdaq right that entered correction, territory, and that speaks of the sort of twin issue of Trump terraff uncertainty, but also a reassessment of tech.
What about stability? Are there any stocks, currencies, bonds that are kind of holding steady and have not been as impacted by the kind of volatility we're seeing elsewhere.
Yeah, So you know, the big take here is that the rally is broadening out, and so you're sort of seeing a shift away from these big tech names and you're seeing a shift towards companies that maybe more reflect or broader picture of the US economy. Analysts talk a lot about the equal weighted SNP, which kind of is a slightly better representation as opposed to the market cap unweighted, which gets a lot of tech, And so you're seeing
some stability there. A take too from a lot of experts in this is that when there is more volatility, when there is more uncertainty, you want to look at companies that are more necessary, they're not as discretionary. So these are things like consumer staples. These are things like healthcare that regardless of what things cost because of tariffs, regardless of how people are feeling, Americans are still going to buy and use those services.
So, with everyone from CEOs to consumers stealing themselves from more economic uncertainty, what do experts say investors should do? That's after the break. Well, Charlie, on your beat, you speak with a lot of experts on personal finance. You've drawn from their expertise already in this conversation. But what are they saying generally about how everyday investors should be
thinking about the market right now. People who might be retail invests or nervously watching their four oh one case, what should they be thinking about.
Yeah, I think there's a little bit of a divide here. The overarching take is stay the course, don't make any drastic changes. But sometimes I'll push these analysts, sometimes I'll push these advisors to ask, all right, let's say someone's got everything handled. Let's say they've got their retirement account. That's good, but they've got, say, a brokerage account, They've got some investments that they can actually work with, and they had some interesting ideas over the past couple days.
Tell us what are the ideas?
Okay? So one of the points that Katie Nixon at Northern Trust Wealth Management told me we had a really good conversation, and she talked about looking at specific industries that do well in volatile times. So these as we were talking about, are those more kind of non discretionary, those consumers, staples, those healthcare companies, And that intuitively makes sense, right, But she made an even better point, which is, don't just look for industries, look at companies within those industries
that are quality. And the focus really there is on companies that they've got solid earnings, they've got solid financials, and so sure, find the sector that works.
But do your homework tech stocks, should you buy, should you hold off? What are you hearing and why is there such a disagreement there?
Yes, this is such a good question. And one of my barometers of what's kind of cutting through from you know, Wall Street to main Street is my brother's kind of brofessional text message group. He is in New York. He's friends with a lot of kind of you know, thirty forty something lawyers. And one of the debates that's been resurfacing in that text for he'll send me screenshots I've got proof is questions about tech and a lot of people have exposure that they know about to text stocks.
A lot of people don't. So if you look under the hood of your four oh one K, you might be surprised to find out some of the biggest holdings are Max seven names. So there's concern about, you know, how far does this rally and tech have to go. The divide here is do you sell or do you hold? And I think one of the points an advisor from California made to me last week was you might take this dip as a buying opportunity. And that's something that we know, you know, Wall Street will do from time
to time. You see Amazon stocks, you know, go down just a little bit and you think, all right, that's a good discount. I see that. You know, Amazon's got strong fundamentals. Their earnings reports were pretty good, their projections going forward were good. And so that is a take that some analysts have. The others would say, you know what, maybe you've kind of juiced enough out of that tech orange.
Drink that and take that energy you've got. And I'm really making a metaphor here, but go on me exactly. I like that take take that immunity defense and go invest in a healthcare stock, which you know is probably going to do better. It's going to perform fairly well regardless of market sentiment.
This is a really silly question that I'm sure a lot of the personal finance experts you speak to would laugh at. But is it better right now to just keep your cash under your pillow and avoid entering the market at all?
I think that is something that so many people are wondering about, right And I think if you think about cash not just like under the mattress, but also in a high yield savings account, you're getting pretty good yield on that cash. And so for some people that could actually make sense, people who might be closer to retirement, people whose risk tolerance is lower. But the concern with a lot of advisors is that millennials, even some Gen xers, definitely some Gen Z people might be you know, a
little bit too risk averse. And I think the concern is that, sure, you've got your cash today, but what happens if inflation doesn't trend down as much as people are hoping, then that cash is going to lose that value over time, and so you're not getting the returns
that you'll need to get a study retirement. And so the overarching message that I hear from advisors is sure, there may be turbulence now, but dollar cost averaging into the market, where you're kind of setting, you know, an amount that you're going to contribute, you know, over a defined period that you stick to over time, that really is the best strategy, according to them.
What about people considering making big purchases right now, like buying a car for example, what's the move there?
Yeah, I think it's tricky. I looked into cars, and I think what you have been hearing a lot about is, you know, automakers concerned about tariffs. There have been reports out that prices for cars could go up as much as twelve thousand dollars.
And I think because of the tariffs on Mexico.
That's exactly right, because of tariffs on Mexico and Canada's potential tariffs, which of course have been delayed as far as we know. And the concern is that those prices could go up. And so I called some car buying experts,
which is really interesting. I called someone at Kelly Bluebook, which is, you know, they value cars, that do research on car prices, and his point was, yeah, if you need a car, might want to buy it now because prices could go up and even if there aren't price increases, specifically due to tariffs, you have this kind of consumer belief that prices could go up that changes behavior, that increases demand, and then car dealerships could meet that increased
demand by rising prices. So I also talk to financial adviser. I put it the same question to him, and he told me basically the same thing. He said, if you need a car, and the decision really should be made based on need, you should probably buy it.
I'm curious about how your sources are interpreting this moment. Do they see it as a period of volatility or is this a full blown correction.
That is really tricky. I think that there again is something a divide, surprise, surprise. In the polarizes to the United States, there is a divide about something. There are those who have talked to me about people wanting to have emergency funds, you know, reassessing those. There are people who point to what they see as leading in indicators, which might be graduates from top MBA is which is a story I wrote recently from top MBA programs having
a difficult time finding jobs. Is that a sense that kind of companies are slowing down hiring is that a sense that the economy could kind of be downshifting. But then there are those who just see these as jitters. And there was an analyst I spoke with who said, you know, he sees actually twenty twenty five as being positive for the stock market and that now is a good time to get a discount on some of these names. So I think no one has a crystal ball, unfortunately.
But I think the consensus that I would say I've picked up on is, you know, take now as a moment not to panic, but to kind of reassess where you are, where your exposure is to particular industries, how suited you know your portfolio is to the current economic climate, but also how how ready you would be if there were some kind of downturn.
This is the big take from Bloomberg News. I'm Sarah Holder. This episode was produced by David Fox and Alex Tye. It was fact checked by Adriana Tapia and mixed and sound designed by Alex Sugia. It was edited by Tracy Samuelson and Craig Giamona. Our senior producer is Naomi Shaven. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole beamsterboorg Sage Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review
The Big Take wherever you listen to podcasts. It helps people find the show. Thanks for listening, We'll be back tomorrow