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Market Overview: Tariff Concerns Drive Down Stocks
Every weekday, the CNBC Investing Club with Jim Cramer conducts a “Morning Meeting” livestream at 10:20 a.m. ET. This article recaps the significant developments from Thursday’s session.
Market Reactions to New Tariffs
On Thursday morning, stocks experienced a sharp decline following the announcement of new tariffs by President Donald Trump affecting American trading partners. The imposed duty rates on imports from key countries such as China, Vietnam, and Cambodia were notably higher than market expectations. During the meeting, both Jim Cramer and Director of Portfolio Analysis Jeff Marks discussed how the term “reciprocal tariffs” is misleading in reflecting the actual complexity of the situation, particularly regarding the methodologies used to establish these duty levels. Jeff highlighted the White House’s current stance of not engaging in negotiations, which complicates forecasts about the duration of these tariffs.
Investment Strategy Amid Stock Declines
Despite the Nasdaq’s nearly 5% drop at the commencement of the meeting, Jim Cramer encouraged investors to remain composed and critically assess stock performance. He stressed the importance of identifying which companies genuinely deserve the decline and which may be experiencing unjustified selling pressure. “It’s time to start picking,” he asserted, pointing to firms like Texas Roadhouse as potential buying opportunities due to their high domestic sales. Jim also indicated Costco as a stock that remains relatively insulated from current market dynamics. “I refuse to be negative as bond yields decline… when rates go down, that overshadows everything else, including tariffs,” he remarked. On this day, the yield on 10-year Treasuries fell to around 4.02%, the lowest rate since October, traditionally signaling lower borrowing costs for major loans like mortgages.
Commodities and Oil Market Impact
The downturn also affected commodities, particularly oil, with U.S. crude benchmark WTI plummeting by 7.5% to about $66 a barrel. This price drop resulted from both tariff-induced demand concerns and an agreement among OPEC+ producers to accelerate their output increases. Coterra Energy, a stock in the Investing Club’s portfolio, faced challenges due to these market pressures, declining approximately 5%. Jim noted Coterra’s adaptability through its natural gas operations, suggesting the stock’s decline might be overstated given the circumstances.
Investment Outlook
As part of the CNBC Investing Club, members receive trade alerts prior to any trading actions by Jim, who enforces a waiting period post-alert for executing trades. Specifically, he waits 45 minutes after sending out a trade alert before proceeding with buying or selling any stock within his charitable trust. Moreover, if a stock has been featured on CNBC TV, Jim adheres to a longer 72-hour window before making any transactions related to it.
For those involved or interested in the market, following these insights and updates may provide clarity on navigating the current investment landscape.
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