Global markets sink lower, but some money managers see value amid Trump's tariff strategy
U.S. markets have fallen since President Donald Trump announced reciprocal tariff policies last week.
Despite the market decline over the past week, some money managers have held a strong belief that the president’s intentions will benefit U.S. markets and the economy long-term.
"Global markets sold off, partially in response to our market selloff on Friday. Expect to see a relief rally very soon. However, we won’t start our recovery until we get more clarity on the tariff situation. I expect trade deals to start pouring in this week," Michael Murphy, CEO and founder of Rosecliff Ventures, told Fox News Digital Monday.
"Now is the time to be adding to the market," Murphy said. "This will pass, and I expect it will pass quickly."
TRUMP URGES AMERICANS TO 'HANG TOUGH' ON TARIFFS PLAN AS MARKETS TUMBLE
At last Wednesday’s "Liberation Day", Trump presented a board illustrating the tariff barriers that foreign countries place on the U.S. The president also announced a plan to implement reciprocal tariffs should trade deals not be reached. This includes a 34% reciprocal tariff on China, 20% on the European Union, 46% on Vietnam, 32% on Taiwan, 36% on Thailand, 26% on India, among other proposed tariffs worldwide. These reciprocal tariffs are in addition to the pre-existing barriers that the U.S. levies on foreign countries.
Trump weighed in on market turmoil Monday morning, posting to Truth Social, "Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place."
Trump also issued a stark warning specific to China in a separate post Monday morning, saying "If China does not withdraw its 34% increase above their already long-term trading abuses by tomorrow, April 8, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th."
Asian markets continued to sink on Monday, with Hong Kong's Hang Seng Index closing down 13.22% in the biggest drop since 1997, China's Shanghai Composite down 7.34%, Japan's Nikkei 225 Index down 7.83%, and Taiwan's TAIEX losing 9.7%.
Despite the proposals and disruption across Asian and global markets, hedge fund manager Thomas Hayes, chairman and managing member of Great Hill Capital, LLC, told Fox News Digital: "I live for periods of market dislocation like this. Wall Street is holding a buy-one-get-one free sale and everyone is running out of the store! Out-performance is created by stepping in and buying high-quality businesses when they're marked down."
"You will never get the perfect top, you will never get the perfect bottom, but if you understand the intrinsic value and the future cash flows of the business you are buying, and buy with a large enough margin of safety, there is nothing like operating in an environment like this. When it rains gold, pull out a bucket, not a thimble."
PRICE TAG: HOW MUCH AMERICANS COULD PAY BETWEEN TARIFFS AND TAX CUTS EXPIRING
But the short-term effect reciprocal tariffs may have on the U.S. economy has raised concerns on Wall Street. JPMorgan Chase CEO Jamie Dimon voiced market worries in an annual letter to shareholders Monday morning.
"The quicker this issue is resolved, the better because some of the negative effects increase cumulatively over time and would be hard to reverse. In the short run, I see this as one large additional straw on the camel's back," Dimon said. "I am hoping that after negotiations, the long-term effect will have some positive benefits for the United States," Dimon said. "My most serious concern is how this will affect America's long-term economic alliances."
"Shark Tank" investor Kevin O'Leary responded to Dimon's letter in an interview with Stuart Varney, saying, "If these tariffs stay in place in perpetuity at 25% rate, he would be right. But I think this is a giant negotiation, and you know, Trump is not shy of being bombastic. We've learned that over 12 years. And you may find the rhetoric painful, but that's not the key. The key is the signal."
The underlying question of whether the benefits of tariff implementation will outweigh the short-term losses has burdened investors and money managers alike since Trump began to take action.
However, some financial experts note that domestic production and commerce will be essential to growth in years to come.
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"We should be charging a premium for everyone to do business here if they’re abroad, because if you do things inside of America it is the best for your business," Michael Lee of Michael Lee Strategy told Fox News Digital. "From a philosophical standpoint, it makes tons of sense, and this market reaction is not tethered to any sort of math or reality."