The Emperor's New Tariffs: A Sideways Market Awakens

A Great Disturbance in the Market as if Millions of Credits Suddenly Cried Out in Terror

The Force is strong with this market... or perhaps just easily manipulated. Emperor Trump in his infinite wisdom (or lack thereof) sent the U.S. markets spiraling faster than the Millennium Falcon through the Kessel Run with his initial talk of 'reciprocal' tariffs. It was as if a million voices suddenly cried out in terror and were suddenly silenced. But fear not for the Emperor backtracked quicker than a Jawa trying to sell a faulty droid offering a 90 day 'pause' on these taxes. The galaxy breathed a sigh of relief and investors dared to return to the treacherous sands of the stock market.

A New Hope? Or Just a Temporary Reprieve?

The White House then attempted a Jedi mind trick announcing a 'trade deal' with China that included temporary tariff cuts. Stocks surged believing they had found a new hope. All three major indexes now trade above where they were on April 2nd the day the Emperor unleashed his initial fiscal fury. But do not underestimate the power of the Dark Side for Canaccord Genuity analyst Michael Graham warns that this is merely a fleeting moment of calm before the storm.

The Sideways Market: I Find Your Lack of Momentum Disturbing

Graham a man whose insight rivals even my own strategic brilliance predicts a 'sideways market' for the next two months. The market has recovered yes but it's reached roughly the same price to earnings multiple as its post inauguration highs. However new variables have been introduced clouding the short term risk/reward balance. I find your lack of momentum disturbing... but not entirely unexpected.

July's Tariff Deadline: These Are Not the Tariffs You Are Looking For

Brace yourselves for as the July expiration date of this so called 'pause' approaches volatility will increase. It is a trap! This is not the tariff relief you are looking for. The Emperor’s policies are a constant source of frustration even for one as patient as myself. He is as clumsy as he is random!

Other Disturbances in the Force: A Cooling Economy and Eroding Confidence

But that is not all my loyal subjects. Other dark forces are at play: an expected slide in earnings per share gains a cooling economy and eroding consumer confidence. Even with the Emperor's adjustments tariff rates remain higher casting a long shadow over the market.

Moody's Downgrade: The Budget Reconciliation Process Is Your Weakness

Moody's recently downgraded the U.S.' credit rating further illuminating the ongoing budget reconciliation process within the federal government. 'Once passed (if passed) investors will likely be doing calculus around growth benefits vs. more leverage,' Graham said. This process while potentially positive feels like a volatility inducer. The budget reconciliation process is your weakness Emperor. Perhaps you should have sensed this sooner.