Market Musings 3/6/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Markets plummet on an emerging trade war…
Markets made the wrong bet expecting another delay for the #Tariffs on Canada and Mexico. Whatever #Tariffs delay optimism markets had coming into the week has completely vanished.
So what’s happened since? Obviously, no last minute reprieve…
So #Tariffs went into effect on Tuesday. The S&P 500 finished Tuesday down -3% to open the week.
China, Canada and Mexico all promised retaliatory #Tariffs in return. China came back with 15% on certain US farm exports like meat and soybean while Canada retaliated with 25% on over $150B of US goods. Meanwhile, Mexico plans to announce theirs over the weekend.
Likely reacting to the negative market reception, late Tuesday, the White House started hinting for some #Tariffs relief. The White House announced a one month exemption for the big three automakers and hinted for more to come. Markets sniffing a whiff of optimism rebounded some on Wednesday.
Then Thursday, the White House extended another 1-month delay on #Tariffs for all goods included in the US-Mexico-Canada Agreement trade pact.
So, why aren’t stocks rebounding with another #Tariffs delay? Well, it was a few days too late and now we got a trade war…
Canada is done with the games said they will not remove their #Tariffs until all #Tariffs are canceled. We mentioned last week that the White House seems to be teasing one-month delays to push for more and more concessions. It seems, at least with Canada, they decided to rip the bandaid off.
We still have to see what Mexico decides to do, but even their tone today, despite the one-month reprieve, seemed frustrated continuing negotiations.
Through Thursday, the S&P 500 is now down -3.6% for the week.
So now what?
The White House just quickly reversed and delayed #Tariffs likely hoping for the same market reaction as last month－which they didn’t get. So there may be some second guessing with the planned reciprocal #Tariffs planned for next month on the EU.
We could see EU not willing the play the same game and just retaliate vs. negotiate. There may be little reason to make concessions when the US is only offering month long delays and will just come back for more.
It’s something that will likely garner more and more attention as we move through the month. It also something that we’ll be watching to see its impact on the economy as consumers and businesses are forced to adjust.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by Pixabay.