Remember DOGE? The hack and slash task force here to cut government jobs and waste? According to the US governments own data releases, they have been increasing government jobs, not cutting. +19k in March, +10k in April. Source: https://tradingeconomics.com/united-states/government-payrolls
So no job cuts there. Very positive. The opposite of what the media and the government has been saying. Increasing investment in the US from companies around the globe. Positive. Big earnings beats and huge capex plans from the mega caps. Positive. Nonfarm payrolls had a big beat today, positive. Tariff trade deals are being worked on, positive.
So what is really the reason for a move lower in the markets? Tariffs were largely paused. The US has been giving out tariff exemptions left and right for any tariffs that do remain. The China tariffs are an issue, yes, but none of that has actually impacted the economy. Most companies stocked up prior to these issues starting. So this will only be an issue if they burn through that stock and have to order more from China while the tariffs are still in place. That isn’t going to happen. The US will back off before any meaningful impacts hit the economy.
Yes things seem irrational with this move higher if you think that tariffs are all staying on, but that won’t happen. That isn’t happening, we are giving out exemptions all over the place. The market reacted to tariffs as though they were all real. And when it became clear that none of this was real, we bounced. Do yourself a favor and forget the news, forget tariffs. Just look at earnings and find good companies to invest in. Next quarter we will see companies blow their earnings estimates out of the water due to all of these low guidance estimates coming out. The market move is rational, the news and fear mongering is not.