There's Nowhere to Hide From Trump's Trade War

Investors have quickly transitioned from gaming out whether China and the U.S. can reach a tariff-free deal, or at least one that doesn’t ramp up cross-boarder levies further, to accepting that tariffs are a given for now and pursuing strategies to make their portfolios as trade-war proof as possible. Strategist Ed Yardeni wrote on Friday morning that, at least in the past, “geopolitical crises often created buying opportunities for stock investors.” And my colleague John Authers writes that at least one strategist believes he has found the ideal tariff trade: German stocks and industrials.

Finding someplace to hide does seem smart. The market has dropped for five days straight, and companies whose stocks make up the S&P 500 Index have already lost nearly $650 billion in market value collectively coming into Friday morning. The environment that has pushed the U.S. stock market to new highs – one of historically high profit margins, low inflation and expanding sources of revenue – is one that seems inextricably tied to globalism. So the rhetoric from both sides suggesting things could get worse before they get better should freak out investors.