Zero visibility. A thick fog will do that. Just when you think the haze hanging over financial markets might be lifting, a really thick fog bank has settled in. You know, the kind of really REALLY dense fog where you can’t see your hand in front of your face. Or “see” where the economy may be headed. For that matter, where the direction of global events might lead.
It’s a very thick fog.
If the first quarter, which just ended, was shrouded in haze, what might be in store for the second quarter? It seems very fitting that the new quarter begins on April 1st, better known as……April Fools Day. The following day is another “good one.” Liberation Day.” (In hindsight maybe they should have been combined…..Liberation Fools Day) Nice start, right?
So just exactly what is “Liberation Day?” Ah, that’s where the thick fog comes in. No one knows exactly what will be announced, what will happen or what the ramifications will be. Certainly everyone is expecting tariffs. Lots of tariffs. Reciprocal tariffs. Exempt tariffs. Tariffs on tariffs. End of the world tariffs. But, no one really knows.
What if the worst (whatever that is) happens? 500% tariffs on EVERYTHING? OMG. Something that dramatic probably won’t happen so there’s no need to run down the street yelling “the sky is falling” or “the tariffs are going to kill us all.” Once again, no one knows what’s in the fog bank.
When (literally) no one is sure what to do what do you do? The Fed has said as much and chosen to keep interest rates where they are (a/k/a do nothing). Investors chose to sell. or lighten up, on positions during the first quarter. Bond investors aren’t sure what’s coming either. Recession, no recession? Frankly, it’s an open and very good question to consider; does President Trump know what to do? Of course that can change at any given time and usually does.
So, what can be expected as the second quarter gets under way? Where will we be in the next 6 to 9 months? What, you can’t see?
It’s too foggy.
