Doll’s Deliberations

Confidence Down + Uncertainty Up = Down Markets

U.S. growth fears have mounted sharply in recent weeks, driven by the Trump Administration’s sizeable enacted and proposed tariffs, its focus on reducing federal government spending, and an overall elevated sense of policy uncertainty/unpredictability.

03/17/2025

Doll’s Deliberations

The Dark Clouds Continue to Multiply

Aggressive shifts in U.S. economic policy are undermining investors’ prior pro-growth expectations of the second Trump Administration.

03/10/2025

Doll’s Deliberations

Tariff Headwinds and a Growth Scare Rock Risk Assets

Global financial markets have hit a rough patch as the cumulative impact of President Trump’s trade and related economic threats are fueling concerns that he will diverge from the pro-growth script that he initially followed during his first term.

03/03/2025

Doll’s Deliberations

The Capital Markets Path Remains Murky

Global financial markets continue to be whipsawed by shifting threats and demands from the new U.S. administration. Generally, investors are still downplaying the threats and focusing on what is still a choppy, but modestly positive, risk-on backdrop. Monetary conditions are not restrictive in the major developed market economies, and policy rates are still being lowered in some of the smaller economies. Global economic activity is on track to improve.

02/24/2025

Doll’s Deliberations

The Tariff Discussion Continues

The Fed’s primary stated goal is to return inflation to 2%. It is failing, and with hindsight, the 100 basis points (bps) in rate cuts since September were a mistake. U.S. monetary conditions were never restrictive, despite Chair Powell’s repeated assertions. Rate cuts have only further stoked asset price inflation and provided additional stimulus to an already warm economy, putting a floor under inflation.

02/18/2025

Doll’s Deliberations

Tariff Risks Dampen an Otherwise Decent Economy and Earnings

U.S. tariff policy, if implemented, threatens to upend the pro-growth investment climate. Even tariff proponents acknowledge that the application of tariffs could cause short-term pain.

02/10/2025

Doll’s Deliberations

AI Competition and a Possible Trade War Keep Things Interesting

When a stock is assumed to have a monopoly and enjoys abnormally high profit margins (e.g., Nvidia), the impact of something challenging that view can be huge, especially if the stock is priced for near perfection. With the discovery of DeepSeek and the jolt it had on the established AI leaders, we got a taste of that phenomenon last week.

02/03/2025

Doll’s Deliberations

Trump 2.0 dominates the dialogue

Stocks advanced (S&P 500 1.76%) as investors began to digest Trump 2.0, which appears to be mostly positive for risk assets. However, significant uncertainties regarding tariffs continue.

01/27/2025

Doll’s Deliberations

A Calmer Bond Market—for Now

A core CPI data print that was a bit less than expected provided a reprieve to the beleaguered bond market (after several months of higher yields) and spurred a surge in equity prices.

01/21/2025

Doll’s Deliberations

Fewer tailwinds/more headwinds

Rising inflation and interest rates that led to fears of a hard landing through much of 2022 and 2023 have long dissipated. The combination of falling interest rates and continued economic growth have, at least in the past, been associated with strong equity returns.

01/13/2025

Commentary

U.S. growth fears have mounted sharply in recent weeks, driven by the Trump Administration’s sizeable enacted and proposed tariffs, its focus on reducing federal government spending, and an overall elevated sense of policy uncertainty/unpredictability.

Aggressive shifts in U.S. economic policy are undermining investors’ prior pro-growth expectations of the second Trump Administration.

Global financial markets have hit a rough patch as the cumulative impact of President Trump’s trade and related economic threats are fueling concerns that he will diverge from the pro-growth script that he initially followed during his first term.

U.S. tariff policy, if implemented, threatens to upend the pro-growth investment climate. Even tariff proponents acknowledge that the application of tariffs could cause short-term pain.

Stocks advanced (S&P 500 1.76%) as investors began to digest Trump 2.0, which appears to be mostly positive for risk assets. However, significant uncertainties regarding tariffs continue.

A core CPI data print that was a bit less than expected provided a reprieve to the beleaguered bond market (after several months of higher yields) and spurred a surge in equity prices.

Rising inflation and interest rates that led to fears of a hard landing through much of 2022 and 2023 have long dissipated. The combination of falling interest rates and continued economic growth have, at least in the past, been associated with strong equity returns.

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