It’s just HFT algorithm based on a lot of incomplete information surrounding these tariffs. Bottomline, the impacts from just the initial announcements has to play out globally (you can’t just simply erase the psychological damage that has been done including the actual market losses incurred by those who got panicked out of it). Trillions of dollars were traded (likely to the advantage of the big money who have the ability to play the market both ways).
Apple (which I am still heavily invested in) is taking it on the chin because of their exposure to China (supply chain as well as retail customers). Yes, Apple has been diversifying their supply chain but most every country has some level of tariffs being applied to them which will add to the costs of Apple’s largest revenue generator (which are iPhones). China isn’t even blinking on the notion of retalitory tariffs which would drive prices soaring in the U.S.
Why didn’t I dump my holdings? I did sell some shares from November until March (between the $220-235 range) just to take some profits. However, a large portion of my AAPL are really long term (like up over 7500%) where it is an opportunity cost balance. They would have to tank by quite a bit and/or eliminate dividends for me to just divest a large portion of it. Additionally, I have a decent amount in a non-retirement account and have to take into consideration capital gains (even if they are now all long term). There is where the proposed new tax cuts will come into play (I will simply take advantage of the new thresholds). Under an actual administration, I would gladly advocate for paying my fair share of taxes (and have). But with this regimes hostile dismantling of the government, that no longer makes sense. But this is a separate topic for another day.
Digressing (back to the current macro market), we aren’t even talking yet about fund managers who adjust those managed portfolios on a quarterly basis (thus more money will come out of certain equities). We’re also finally seeing Wall Street publicly acknowledging the anti-American sentiment that could (and IMHO, will happen) affect a lot of brands. That article focuses primarily on food chains, but the backlash is wider than that when you look at the breadth of U.S. companies that have an international presence across industries. Should this regime attempt that hostile invasion and takeover of Greenland, you are going to witness a large scale abandoning of these U.S. brands (dealing a very long term death blow to the U.S. economy and any notion of it being a global trade partner) because the country will be rightfully viewed and treated as a pariah like North Korea and Russia.
China, Japan, and South Korea have social media brands and platforms which they could use to their advantage if they so choose to open up western friendly versions of them (though many will obviously be far more cautious with signing up on Chinese platforms like Weibo, QQ, Bilibili, etc). IMHO, Japan and South Korea would be wise to be ready for this scenario; taking up a role as technology hubs post-U.S. dominance (and not ceding it completely to China).
Realistically, I know “leaders” are still stuck in this “standard protocol” mindset (you see this with countries looking to have discussions with the U.S. regime about tariff negotiations versus looking at maybe just letting the U.S. try to go it alone in Soviet Union fashion where it would fail). The U.S. is a huge market for sure, but that was predicated on a stable economy. This regimes dismantling of the government, checks and balances, and the rule of law, is going to result in that no longer being the case. Better for countries to establish actual reliable relationships with each other versus trying to placate an autocratic U.S. that will become economically irrelevant as time goes on (especially if this dictatorship takes full hold in the coming months).
