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?