Pretiorates’ Thoughts 75 – Tariffic Times Ahead… but not for the financial markets

Letter was published on April 4, 2025

We are already used to a certain amount of behavior from the Trump administration. However, the Liberation Day is likely to be particularly memorable. The financial markets have reacted rather angrily. No wonder, with this move the door was opened to a tariff war. China has already responded with countermeasures. It is still uncertain whether others will follow. One thing is certain, however: uncertainty is what the financial markets love the least.
In mid-November 2024, we presented the 17-year cycle in Thoughts 58. The Nasdaq index had its high on December 16, 2024, and has since fallen over 20%. The S&P500 was able to generate a new all-time high in mid-February 2024, but in doing so created a so-called intermarket divergence, which is also a negative indication for many market observers.