DealBook: Would Trump have an “exit ramp”?

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FRINETIC SALE is dominating global markets for the third consecutive session, with the S&P 500 futures and the Nasdaq deeply in the red, along with a retreat in European and Asian actions, while President Trump deepens the subject of tariffs. A new tax wave is scheduled to take effect this week, which may further disturb global markets.

Trump continues to say that he doesn’t care about action markets. But the impact of over $ 5 trillion last week on S&P 500 may be weakening your hand as negotiations continue with US business partners. And business leaders – even those who have supported the president’s schedule before last week’s announcement – are being publicly anxious about whether Trump will be able to find an exit ramp.

Here is the most recent: Cryptocurrencies, oil, most commodities and the dollar are all down. The S&P 500 is on the verge of entering a low market, defined as falling more than 20% compared to the maximums of mid -February. Morgan Stanley analysts warn that another drop of up to 8% is possible.

Cboe Volatility Index, the so-called fear meter of Wall Street, fired on Monday to a level for the last time in the early days of coronavirus pandemic.

The Fed seems not to be in a hurry to rescue investors. Jay Powell, president of the Central Bank, signaled on Friday that the inflationary effects of “significantly greater than expected” tariffs put the BC in the way of waiting to see.

Attention to Trump

What will Trump do next? For now, the president said that despite market declines, he intends to maintain the course. “I don’t want anything to happen, but sometimes you have to take medicine to fix something,” he told reporters at Air Force One on Sunday, returning from a weekend full of golf in Florida.

Other Trump government officials followed the example. “I see no reason to priced a recession,” said Treasury Secretary Scott Bessent on NBC’s “Meet The Press” program on Sunday.

But Trump may be starting to lose support. Some Republicans, including Texas Republican Senator Ted Cruz, have expressed concern that tariffs can lead to the “terrible result” of an eye for an eye.

And Bill Ackman, Trump’s billionaire and supporter who initially supported the tariffs, warned that the next wave of retaliatory rates, scheduled to take effect on Wednesday, would be the equivalent of a “Economic Nuclear Winter” that would destroy “trust in the country as a commercial partner”.

Wall Street continues to sound a terrible warning. The low argument in general is that the tariffs will trigger a total trade war that will overthrow global trade, inflation will ignite and push the US closer to recession.

The case comes from Trump, which has long said that commercial wars are good and easy to win. “Forget the markets for a second,” he said. “We have all the advantages.”

But more bad news can force Trump’s hand. “My base case is that Trump will need to retreat in the coming days,” wrote Mohit Kumar, Jefferies economist, in a research note on Monday. Kumar added that Trump would do this “in a way that he could claim the victory.”

What is happening

A Tesla’s longtime enthusiast was pessimistic with the automaker. Dan Ives, an analyst at Wedbush Securities, who has long advocated Elon Musk’s automotive company, reduced his goal to the stock price from $ 550 to $ 315, citing tariffs and musk polarizing role in the Trump administration.

Musk publicly defended a “zero fare situation” between the US and Europe, while the used Teslas market is growing as owners sell their vehicles in many cases to protest musk work in government.

President Trump claims to have almost closed an agreement for Tiktok. He told reporters this weekend that his government was close to closing a deal with Beijing to bring a new non -Chinese video application property – until China opposed its wave of tariffs and imposed 34%retaliatory rates.

Trump suggested that he could still reach an agreement: “If I gave a small cut in the tariffs, they would approve this agreement in 15 minutes, which shows the power of tariffs,” he said.

Inflation data and a new season of results are this week’s big focus. Bureau of Labor Statistics is expected to publicize the consumer price index report on Thursday. Investors were concerned about inflation, even before the tariff dam.

Result teleconferences should offer clues about how companies are adapting. Delta Air Lines releases on Wednesday. Wall Street’s top companies, including Blackrock, JPMorgan Chase and Morgan Stanley, hold them on Friday.

Dimon notice on rates

With President Trump’s rates dominating the headlines, it was inevitable that Jamie Dimon addressed the subject in his last letter to the JPmorgan Chase shareholders, published on Monday.

The tax wave, Dimon writes, may be rooted in legitimate concerns. But the way the trade struggle is unfolding is the risk of short -term pain and long -term damage to the global economic order, he adds.

Tariffs will “slow growth”, although it is too early to say that a total recession is coming, Dimon wrote. Although the US economy was “very healthy and stable” for years, it had already begun to weaken before the announcement of Trump’s fare. (Your own analysts warn that a recession is more likely than not this year.)

Dimon noted that there is still much unknown how the struggle for tariffs will unfold, including how other countries will respond; the effects on consumer and investor confidence; What can happen to the dollar; And much more.

In the short term, he writes, “We are likely to see inflationary results, not only in imported goods, but in domestic prices, as input costs increase and demand increases in domestic products. As this unfolds in different products will partially depend on the possibility of replacement and price elasticity.

Dimon writes that inflation was already embedded in its global perspective, given high and “non -sustainable” tax deficits, remilitarization worldwide, and the need for more infrastructure investments.

Dimon’s words reflect the uncertainty that dominates Wall Street, which prepares for more chaos. Hedge traders and backgrounds have suffered losses. The negotiation – a business that the bankers expected to resume this year, with the prospect of deregulation and tax cuts under Trump – stagnated, with several major IPOS being postponed.

Dimon wrote that JPMorgan, whose traders can profit from market volatility, will not necessarily suffer. But, he adds, “it is not particularly good for capital markets.”