S&P 500 trade Trump

What Could Go Wrong? Industrials And Materials Edition

Allow me to present a juxtaposition for you. 

So, I’m not going to sit here and pretend like this pithy little post represents some kind of definitive assessment of what, on the surface, appears to be a rather glaring contradiction.

Indeed, the whole point of pithy posts is to eschew veracity in favor of maximum humor, irony and/or entertainment value. Plus, it’s Sunday so no one wants to read a deep-dive anyway.

Having thus exonerated myself from charges of glossing over pretty much everything on the way to purposefully delivering a take that’s completely devoid of nuance, allow me to present a juxtaposition for you.


Here’s Goldman, from a note out Friday:

President Trump announced that he intends to sign the formal tariff order next week. In addition, our Washington, DC-based economists expect further trade developments in the coming months, including stalled NAFTA negotiations and potential restrictions on Chinese trade and investment.

S&P 500 fell by 1% on the day of the tariff announcement and at one point was down nearly 4% this week before rebounding to close down 2%. Unsurprisingly, this week’s sell-off was most acute in Materials and Industrials.

Here’s a chart of that underperformance:


And here are BofAML’s earnings estimate revision ratios for those sectors:


What could go wrong?




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