In today's episode, Kip dives into President Trump's tariff surprise today, which has left global markets reeling in stock market futures trading. He discusses the short-term ramifications of the announcement and the potential long-term opportunities that will come for U.S. companies. Whether you're worried about your investments or just curious about the ongoing trade tensions, tune into today's podcast to learn more.

Don’t look back because the market is closed. Good Wednesday afternoon, everyone. Kip Herriage here with the daily VRA investing podcast. Hope you had a good day today. Listening it’s going to be a little bit of a different podcast here. Tyler and I spoke after Trump’s tariff announcements in the Rose Garden. Tyler and I have been working on this story about this outcome because if you’re paying attention to what happened, this is bizarre. It’s, I believe it’s almost indefensible what Trump has done here, if I’m being candid with you, because this is going to hurt a lot of people.

This is going to upend global markets. I, I wonder, I wonder how Asian markets are going to open. Emerging markets are really going to be hit hard here. And I’m not saying that Trump is wrong to do what he did. I’m just saying that we did not see his coming. I don’t know anyone. This all, the severity of these tariff announcements, this all is coming. The good news is Mexico and Canada are not going to be impacted by this.

[00:01:00]:
That’s what we learned today, at least. This replies to much of the rest of the world. And it is reciprocal. And so look, I get that as well, reciprocal tariffs. But it’s not just reciprocal, it’s the way they calculate these, right? It’s reciprocal tariffs plus, plus other trade barriers. That’s how they came up with their calculations. So, you know, we’re trying to get those details, I haven’t seen that yet into how those calculations are made, but we’re talking about, you know, a 30, 40% tariff. So many countries.

The total tariff on China now over 50%. So this is a trade war. And now we’ll have to see how these other countries react to it. As you may have seen, futures markets are ratcheting lower as I speak right now. Dow Jones futures down an even one, just over 1,000 points. Even worse, NASDAQ futures down 866 points. That’s 4.4%. IWM small cap futures down over 5%.

[00:02:01]:
So the markets didn’t see this coming. This is the market’s least favorite thing is surprises. But the way it was, I think it was the rug pull, really, that, that, I’ll be candid with you, I had to wait, I had to wait a couple hours to do this podcast because it was the rug pull that Trump pulled on us here. He started by saying there was going to be a baseline tariff of 10%. And the market celebrated. Everything was moving higher, sharply higher. And we’re like, hey, you know what? Hey, classic art of the deal. He’s getting as much as he can out of this now.

He’s not going to be quite as brutal on the tariffs. We can handle 10%. But that wasn’t it. Then he pulled out his big charts with country by country, you know, going down, what the tariff’s going to be. And that’s when it all hit us, as we saw futures start to slide and stock prices start to evaporate. Okay. This is something very different than what he said at the beginning of his Rose Garden address, by the way. He did it like a showman, which I think is extremely offensive, because there are going to be a lot of people lose money here, be a lot of good Americans here.

[00:03:11]:
I’m talking about Americans, a lot of good American invest MAGA people that are going to get hit hard by this. And that’s not a laughing matter. If I were to say that to Trump to his face right here, he’d probably say, well, you didn’t take me seriously. I told you I wasn’t watching the markets. I told you I didn’t care about the markets, and I told you I was serious about tariffs. Right? And I guess he’d have a point. But you know that this is the way Trump operates. You don’t know when to take him seriously.

Exactly. Well, this is one of those times that apparently we have to take him seriously. And a lot of good people are going to get hurt here because the markets, the markets are going to get hit hard. If Asian markets get hit as hard as I believe they may, then this could be a bit of a bloodbath tomorrow morning. And I think it’s, again, it’s very sloppy, unserious, unprofessional approach that Trump has taken with this. And look, I’m a supporter of the guy. You know this about me. But this is not how you conduct business, certainly not something of this magnitude, of this importance.

[00:04:17]:
So I would love to be wrong. Now, there is a bit of a. There’s a bit of a caveat to this, right? And this is what we’re trying to get a handle on. There is an April 9th deadline one week from today. That’s when these global tariffs go into, into place. All right? One week from today. So, you know, Scott Bessant, Treasury Secretary, was asked in an interview by Bloomberg just after the Rose Garden event. So there’s a week to negotiate.

What are those negotiations going to look like? He goes, I don’t know. I’m not. I’m not part of that negotiation. I can’t speak to that, which I thought was strange. But that’s the caveat. These global terrorists, reciprocal tariffs do not go into place apparently until April 9th. So there is some time for these things to be worked out. The question is, how will they be who the administration is going to be talking to, these 50, 60, 70, 100 countries, all these countries that are impacted by this.

[00:05:21]:
So look, I, I told you a little bit different podcast. There’s not a lot of reason to go through what happened in the markets today. Because we finished higher, it looked like we had a good reversal. It looked like the lows are in, they’re not. And so we’ve got some decisions to make. We’re going to see what happens overnight. We’ll be up first thing in the morning early. And you know, anything the semis and it turns out the semis and housing stocks that we’ve been covering here, they were telling us exactly what we should be doing, you know, 12 to 14% below the 200 day as they normally do.

The semiconductors were telling us what, what, what, what was happening here, that we are likely going into a bear market, that I think this is going to be an ugly period for a while. But at the same time, Trump’s not wrong about this because this is going to be extraordinary. If you’re manufacturing, okay, you’re celebrating tonight, right? It might be a short term hit for you from an investment point of view, but if you have a manufacturing business or if you want, you’re about to have red carpet treatment open up for you. And because U.S. businesses and U.S. manufacturing and U.S. employment is going to skyrocket. That is very true.

[00:06:32]:
Longer term, I see this being a big positive, but I’m talking about the very short term impact from what happened today on the markets. We see it in the futures markets, we’re going to see it in the Asian markets tonight. Maybe that’ll be enough to get these other countries to realize Trump is serious and that they have a week to do something to prevent the bloodbath that’s going to happen on the global stage from these tariff policies. Okay. Again, we took a little time to collect ourselves. I’m not trying to be hyperbolic, I’m not trying to be overly emotional, but this is worse than anyone thought it would be. And so that’s a shock. We have to deal with that and we’ll be dealing with that.

We’ll review everything overnight. We’ll be, I doubt we’ll sleep tonight. First thing in the morning, we’ll have an update and probably alert out to you first thing in the morning. If you just joined us for parabolic options. Let me go and address this. We put on our first two trades today. They look really good, especially with the 10% tariff idea was, was put out there. These positions were skyrocketing and then, you know, again, the bottom fell out.

[00:07:43]:
So we have two positions. We’re almost certainly going to sell those at the open tomorrow. The good news there, it’s not a lot of good news. It’s some good news that the VIX volatility is going to skyrocket overnight in the morning. That will have an effect. That will have a positive effect on premiums. So will allow us to get out of these two positions, which is what we’ll be doing. It will allow us to get out of these two positions we just added this afternoon.

Okay, apologies, folks, without more damage than would be, but we will have to sell those just after the Open. And again, we’ll communicate that to you first thing in the morning. This is pretty much shocked everybody that I know and we just got to deal with it long term. I think Trump’s onto something. But this is how bad things happen. This is how market crashes happen. This is how global depressions happen. Just kind of a shock to the global system.

[00:08:40]:
Globalization is dead, Protectionism is in. We’ll find out whether or not it’s a good thing or not, and we’ll find out what this process is going to be like. It’s quite a bit different, as you can tell, than what I thought it was going to represent. Apparently, the art of the deal is going to represent something completely different. Unless that April 9 deadline. That’s the caveat, right? Unless something happens between now and then. Entirely possible. You maybe this is Trump’s master plan altogether.

Okay, Getting so many questions here, folks. I’ve done this 40 years. I’ve never experienced anything quite like this. Right. And I’m just hoping against hope that global markets don’t have a complete meltdown overnight because this is that kind of out of the blue announcement that could make that happen. Let’s just hope that’s not the case. All right. But again, there is a bit of more good news.

I will tell you that, you know, gold, which of course we have a huge amount of exposure to. Here’s our single largest position. Well, that’s again, that. That is, if you’re looking for a silver lining, here it is. Gold’s up. Another gold just bounced off at $3,200 here about an hour and a half ago. Okay, last trade. 3180.

[00:09:52]:
A bit of a, a bit of a heads up on this. In a true risk off environment, which again, unless we’re missing something, that’s what this looks like. In a true risk off environment, gold is going to go lower too because liquidity, global liquidity will become a factor. People will be selling whatever they can. They have liquidity in, they have profits in. Unfortunately, this is what happens in big sell offs. So you know, if you hold physical gold, it’s not easy to just go sell it. I get that.

But if you have some liquid holdings in gold, the miners as well will get hit. I’m just trying to give you a heads up because there’ll be no safe haven here. I doubt there’ll be any safe haven except for bonds. The bond market’s going to scream. Jay Powell, I know you won’t take my advice, but you should hear me on this. If you’re concerned today from this is that inflation is your biggest concern out of this. You’re worse fetch here than I even believed that you were. And you’re the worst fetch here of my time, of our times.

[00:11:05]:
Your concern now should be a global growth scare and an economic potential meltdown of sorts. That should be what you’re focused on and meeting tonight with your Fed presidents and governors. And you should be cutting rates by at least 50 basis points in an emergency action this week. And it probably again, I want to be wrong. They should cut rates by at least 50 basis points if not a full 1% because that’s where the strength is going to be in the bond market. The demand for specifically US government debt is going to be otherworldly from this. Okay, I would expect the same for the US dollar. There’s going to be a global rampage to get their people emerging markets, hands on US dollars and completely all over the world.

[00:12:01]:
And so that, that comes with its own set of issues. Okay, so again that’s, look, this all just happened to us here down what, two and a half hours ago? Three and a half hours ago. We’ve been trying to make sense the entire time. Got a whole lot of questions as you, as you know from listening to me, I doubt that I’ve helped anyone on this podcast today and for that I apologize. But again we’ll, we’ll be hard at it. We’ll see how the global markets respond overnight. Maybe this April 9th deadline is going to force action to alleviate what could otherwise be a very, very tough global market because the markets don’t like these surprises. Okay, let’s hope for the best tonight.

Hoping Kip Herriage is just completely wrong about what may happen tonight because you have to know I want to be. And we’ll be back with you first thing tomorrow morning for our very letter members. Look for something early from us. We’ll have something to you again at least 30 minutes for the open, probably an hour before the open. We may even do a members only podcast in the morning. We’ll see how that plays out. But that’s it for tonight. Hope you’re all doing well.

[00:13:15]:
We’ll see you back here tomorrow. And again, long term, Trump’s exactly right. We just unfortunately may have a much smaller GDP to work with, which could mean a smaller manufacturing base, which could mean a whole lot of other set of problems. Unless I am reading this exactly wrong, I just don’t think I am. All right, folks, have a great night. We’ll see you back here again tomorrow. Good night.