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Market Commentary

Tariff Mania Overreaction

By Charles Payne, CEO & Principal Analyst
3/12/2018 12:49 PM
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For conservative economists and mavens, the Ides of March came early when the White House floated the idea of tariffs on steel and aluminum.  The Dow Jones Industrial Average started the month down more than 400 points.  There were warnings of doom and gloom, as the world would surely retaliate with their own tariffs.

Never mind that America saw its global trade deficit swell to $566 billion last year.   We are led to believe that China has an alternative to the $505 billion in stuff we bought last year, or that the EU is really going to overplay its hand and further threaten its $171 billion trade advantage.

For me, however, the best gauge of Tariff Mania overreaction came from the stock market.  The Dow has since erased the knee-jerk losses.  But more importantly, one of the top export products has been the hottest niche of the market.

The semiconductor index, which only recently eclipsed its prior high-print established 18 years ago, is soaring.  In January, America exported $4.2 billion in semiconductor products, second only to industrial machinery.  Today, the Philadelphia semiconductor index hit an all-time high.

Overall, there is an anticlimactic feel after that monster session on Friday, as investors look for catalysts beyond the tech sector.

News that Larry Kudlow may be in the running to take Gary Cohn’s place lifted the market a bit. However, the Dow is still down about 100 points, the S&P500 relatively flat, and the Nasdaq is higher, up 30 points.  Advancer led decliners 1471/1376 on the NYSE and 1528/1253 on the Nasdaq.


Trump's terrible Terrors are walloping stocks like Boeing. Hope the wallup wears off sooner rather than later

john konefes on 3/12/2018 1:16:50 PM
So, let me get this straight Boeing goes from $163 to $365 under Trump and now at $345 he's destroying the stock. Buy the dip my man buy the dip. CP

Charles Payne on 3/12/2018 1:32:31 PM
We've become spoiled after the last few years as far as the market goes! The President throws out a "worst-case", back-peddles and gets things done, and is castigated! Unfair

kev on 3/12/2018 2:25:04 PM
The hair on fire reaction by the WSJ and most of your fellow FBN colleagues and pundits is so over the top. Given what Pres. Trump has accomplished in the last two years, let alone his career, why folks continue to underestimate and bet against him is a mystery to me. Your perspective is welcome!

Alan on 3/12/2018 3:02:39 PM
President Trump is not a politician. He is a dyed in the wool pragmatist. He does what ever it takes to get the job done.It and Him go totally aginst the establishment pols that do whatever it takes to get elected and to keep them in their new elite status and way of life. Trump is already there and wants the rest of America to join in. It is a tough road ahead but at least he is trying to get us there

James Cuff on 3/12/2018 4:12:57 PM
Charles, thank you sir. Finally someone to tell it like it is. Buy the dips, where are all these people looking for advice? NOTHING has CHANGED, USA is all about growth again, momentum again, & YES working again.. We est the S&P to DOUBLE in less than 5yrs, let's say 4yr & 9 months . Invest LONG be HAPPY, LIFE is good & getting BETTER.

Ed on 3/12/2018 4:18:14 PM
Charles, I saw some Harley Davidson execs saying the tariffs will hurt their business, and hence they are closing some plants in the US. Please comment on this. My personal feel, HOG is in a business cycle. It's always feast of famine on this stock.

Carlos on 3/12/2018 5:40:34 PM
Iím so glad to see that we now have a president who hits from the Menís tees!

John Mathewson on 3/12/2018 10:43:18 PM

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