Written by Shan Saeed, IQI Chief Economist
The month of April has commenced with tariffs going global. Trump tariff is the new risk to the global economy and investors are getting ready navigating through these choppy times. At the time of writing this piece, President Trump has given 90 days pause except for China. Wall Street’s benchmark S&P 500 leapt 6% immediately after the announcement, while the tech-heavy Nasdaq Composite soared almost 8%.
Global stock markets have plummeted following President Trump’s announcement of sweeping tariffs, resulting in the world’s 500 richest people losing more than a collective $525 billion in just 3 weeks. Even billionaire supporters who attended Trump’s inauguration are facing significant financial losses, proving that no one —regardless of their political connections—is immune to economic shockwaves when worldwide trade tensions escalate.
Stock Market and its Impact Globally
Tariff creates distortion, inefficiencies and misallocation of resources. Tariffs are stagflationary. I don’t believe in tariffs, quota or protectionism. I am a staunch advocate of free trade in the global economy. I believe in free markets and free flow of goods and services.
Tariffs have made huge impact in the US equity markets. Investors have lost $13 trillion YTD. Pure Bazooka. Classic case of epicaricacy.
Recession is knocking on the doors on US economy. Recession is a consumer cycle not a business cycle. When consumers don’t spend, businesses don’t invest, then the economy shrinks.
I follow Milton Friedman for my economic thoughts, and he has got a huge influence on my personality. And I believe in free markets-The Chicago School way!
Both US equity and bond markets are shaking, and global investors are nervous. Three regions will lead the global economy i.e. a) GCC b) ASEAN c) Africa.
S&P 500 down 10.3%+ in two days [April 3 and 4]:
• October 1987
• November 2008
• March 2020
• April 2024
Recession Bells Knocking the Doors in The USA
BlackRock CEO Larry Fink said that many business leaders believe the United States economy is already in a significant downturn.
“Most CEOs I talk to would say we are probably in a recession right now,” Fink said at an event for the Economic Club of New York.
Goldman Sachs | Market Pulse – Top Bank Speaks About the Outlook
- “Expect the US real GDP growth to slow to 1.5% in 2025”
- “Expect US core PCE inflation to rise to 3.5% by year-end 2025”
- “Nearly all survey-based measures of US inflation expectations have risen”
- “In the Euro area, expect real GDP growth of 0.8% YoY in 2025 to improve to 1.1% in 2026”
- “Updated 2025 global equity forecasts: Asia leading at +12% total return”
- “Higher dividend yields from non-US equities may prove attractive amidst peak policy uncertainty”
