Is Trump About to Airball the Economy! Recession Fears Grip Wall Street

Another Day Another Dime (Lost?)

Alright folks MJ here. Seems like everyone's panicking about the economy. Two years of recession predictions that went nowhere and now BAM! Trump's tariffs hit and the market's doing the cha cha slide downwards. It’s like watching Horace Grant try to shoot a three pointer – painful and unpredictable. Even Bespoke Investment Group is throwing their hands up saying the 'wisdom of crowds' is getting punked by one guy's Twitter fingers. I mean seriously? It's like Scottie Pippen trying to argue with Phil Jackson about the triangle offense. Not a good look not a good look at all.

Trump's Tariff Tango: A Slam Dunk for Disaster?

This KKR guy Henry McVey is saying these tariffs are a body blow. A potential recession is on the table. Says it's like a 2.5% GDP hit which could make the federal tax rate the highest in a century. That's like Charles Barkley trying to diet – a valiant effort with a high probability of backfiring. Look I'm no economist but even I know messing with the money is like messing with my fadeaway – you do it wrong and you're gonna pay the price.

Stupidity Tax: Paying the Price for Bad Calls

Jim Paulsen on CNBC is calling it out. 'The stupidity of what we're doing becomes more obvious.' He thinks there might be a walk back because well who wants a massive tax increase on the whole planet right now? It's like trying to argue with Dennis Rodman about staying out of trouble – good luck with that! And Powell at the Fed? Still saying 'no hurry' on rates. Sounds like he needs a pair of my shoes to kick things into gear because this 'wait and see' approach is about as effective as Kwame Brown in a clutch situation.

Market Meltdown: An Airball of Epic Proportions

The market's had a rough week no doubt about it. I was watching the numbers and even I thought "maybe I should come out of retirement again!" You see the S&P 500 tried to act like it was going to pull a comeback but each bounce failed. Even on Friday traders tried to make the old August low count before it finally buckled. Its like trying to get a foul call on Bill Lambier it just ain't gonna happen. Ultimately the week ended with pretty good extremes in selling pressure and hedging demand which should turn the risk reward more favorable for a reflex bounce.

The VIX is Up the Fear is Real: Time to Fadeaway?

NYSE volume was 93% skewed to the downside and a new record in put option buying was set. The S&P 500's relative strength index hit a post Covid low as the VIX hit a post Covid closing high. The CNN Fear & Greed Index settled at 4 on its scale of 1 to 100. This 10% Thursday Friday collapse in the S&P 500 taking it 17.4% below its Feb. 19 record high ranks among the deepest two day declines in more than 70 years: October 1987 (Black Monday) November 2008 (post Lehman collapse) and March 2020 (the Covid crash). This is what you call a total team breakdown. This is like letting the Pistons win the championship in 1989.

Panic Stage? Or Just a Temporary Time Out?

Paulsen's saying we're in 'total panic stage.' Gold fell utilities sank and even Berkshire Hathaway took a hit. But hey financial stimulus is coming via collapsing Treasury yields a falling dollar and cheap oil. Now all this depends on whether Trump keeps playing hardball with these tariffs. If he opens an exit ramp things could change fast. The S&P 500 is back to 19.4 times 12 month forward earnings which is high across the expanse of decades but believe it or not is a full P/E point below the five year average. The equal weighted S&P 500 P/E is back to its 15 year average under 16. In the meantime I'm gonna stick to playing golf and counting my rings. Because even in a recession winning is winning.