'Waterfall' decline base case risk to US market: Chris Wood

Synopsis

He said April 2-when Donald Trump announced the imposition of tariffs connected imports into the US-is an 'impoverishment' day, not a 'liberation' day, arsenic termed by President Trump. On Thursday, Wall Street posted its worst time since 2020 successful effect to the announcement of worldwide tariffs the erstwhile night.

Mumbai: Jefferies' planetary equity strategist Chris Wood said the basal lawsuit hazard of a 'waterfall' diminution successful the US banal market is rising successful the aftermath of the caller tariff regime successful the US.

"The hazard is not conscionable precocious valuations but a panic unwind of passive concern wherever everybody owns the aforesaid stocks," said Wood successful his play newsletter, Greed & Fear.

He said April 2-when Donald Trump announced the imposition of tariffs connected imports into the US-is an 'impoverishment' day, not a 'liberation' day, arsenic termed by President Trump. On Thursday, Wall Street posted its worst time since 2020 successful effect to the announcement of worldwide tariffs the erstwhile night.

"Tariff hikes are plain atrocious quality arsenic the historical precedent of the Smoot-Hawley Tariff Act of 1930 highlights," said Wood. "It is besides precise important that the US dollar is weakening, which is the other of what the likes of Stephen Miran, president of the Council of Economic Advisers, would person expected."

Wood said Elon Musk leaving the US authorities successful precocious May is simply a 'negative'.

"It is becoming ever much evident that the 2nd Trump administration is missing a idiosyncratic connected the system to curb immoderate of Donald Trump's much utmost instincts, astir peculiarly erstwhile they are driven by the conception that commercialized is simply a zero-sum game," helium said. "This was the relation highly good played by erstwhile Treasury Secretary Steven Mnuchin successful the archetypal Trump administration. Unfortunately, determination appears to beryllium a vacuum successful this administration."

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