My hope is that one outcome of Trump’s presidency will be a demonstration of what it means, to have a populist as a head of state.
P.S. This is quite at the limit, now I wonder if I should censor myself 
P.P.S. Not electing populists should improve global financial stability and avoid uncertain policies, which is of course a benefit for us!
Just add a smidgen of something to do with investments so our mods overlook it 
In order to truly fool our beloved mods, you should also make it appear as if “that tidbit of something to do with investments was there all along!”
Bonus point if you can credibly argue that the political “tangent” was necessary to make the point needed to reach the conclusion.
So US and China are talking in Geneva. Is there an underlying sentiment by investors that things will go back to where they were, roughly speaking, and that the recent sharp drop in valuations was therefore unwarranted ?
No much deeper revaluation required to account for deeper growth impact while the global economy painfully adjusts to a new reality, over years to come?
Will we see another flurry of posts in this currently idle thread very soon?
No. I also see the possibility of things looking remarkably worse if China pushes harder. I do t see them releasing critical minerals without the US putting more on the table.
Things can not go back to where they were.
Minimum „reciprocal“ tariff is going to be 10% for any country. This means that even if everyone get 10% , average US tariff rate would increase by 4-5X
Now with China, the end game tariff would be higher than 10% because otherwise UK will look like a joke and all this drama meant nothing . US administration is obsessed with Tariffs. So things are not going to go back to past at least for current term.
I personally think that if US doesn’t offer reasonable terms, this whole thing will go completely out of control because we have already seen that China is not going to get dominated. They have already shown that they are willing to suffer for pride. US doesn’t have that will because only one person wants tariffs.
I can clearly see that US wants to cut the trade deficit. Maybe a noble cause. But unfortunately an economy which is 70% services cannot become a booming manufacturing economy in few months. There is not enough capital, Labor or interest. If they want it, they need to put their own capital to incentivize but they are highly in debt, so even that is not an option.
Let’s see how it goes. Maybe they will start de-escalating atleast
Precisely. Yet the S&P is down a mere 4% ytd and 8% from its ATH. Doesn’t seem to account for the likely magnitude of adjustment required.
I believe market still believes that 10-15% can be absorbed by economy relatively well considering partial cost absorption by supplier and partial inflation impact
Everyone is waiting for what actually happens with EU & CHINA after the showdown.
In meantime, China exports went up in April despite US tariffs. So this should be a message also to have sensible negotiations
I personally think there’s still a lot of optimism in the market that I wouldn’t deem appropriate. I would not say my stance is based on an educated guess as that’d be giving it too much credit. It’s just an opinion not backed by research.
That being said, the S&P500 is down 8% instead of up whatever %. Going flat, for it, is a major change of path vs the trend it had previously. Some future expectations have probably changed. Some people are probably waiting to see how this evolves.
One critical question those who deem the S&P500 too optimistic have to answer is where they’d put their capital, then. Dev ex-US (or World ex-US ex-China) is an easy bet for me because that’s where I’ve been for some time but for those who have always believed in American exceptionalism, getting rid of past assumptions must be a tough exercise. On top of that, the previous flight to safety asset, US Treasuries, should also be reassessed currently so it isn’t as easy a decision to make as “I’ll sit that one out, sell my stocks and buy US Treasuries”.
Simple: market cap weight all-world, as usual.
I don’t think it’s major or long-lived yet, it’s just that we’re inundated with constant information.
I wonder if the future expectations bit is also overblown (not by you, by the information flow/opinions). I’m quite tired personally of the circus that media have become. Let me try to explain how it feels to me:
Cognizant that “this time is different” is a potentially major mistake in investing, I feel this is the key difference between now and before is the volume and intensity of information which grinds people’s brains and emotions. Whereas say 20-30 years ago we’d read about what happened yesterday in the papers, with a peppering of opinions and reflections of the past week every Sunday, nowadays it seems the news is an afterthought to the opinions, and there must be opinions every other minute!
Some people for sure are waiting, I’m among them.
This is why life strategy funds are popular amongst investors in UK , Canada etc. They already have defined Equity vs Bonds & they have some home bias already built in. This removes all thinking and just monthly contribution.
DIY leads to too much thinking and constant desire to outsmart the rest. This can be cause of stress for few, source of fun for others 
One interesting thing I noticed that almost all life strategy funds in Canada have less than 50% US stocks in the equity portion. Same for Vanguard UK funds.
More to do with the built-in home bias.
There is no way to go back to status quo. Some bridges have been burned. Trump is also insisting on a minimum of Tariffs even in best case (see UK).
The whole uncertainty created cannot ever be resolved, as long as Trump is President. He can wake up tomorrow and Tariff random stuff with a tweet (see rabdom 100% tariffs on foreign movies).
There is no certainty with anything with the US anymore.
In USD terms, but the USD also lost like 10% at the same time. So we are down 18% from ath basically.
Yes that’s what Vanguard said in interview. They said market preference is this and hence they built their product around it
Don’t forget that they also serve the same purpose as Swiss pension funds. So, their allocation strategies are pretty similar. Okay, maybe except Swiss real estate allocation 
, but the general idea is the same.
Maybe I woke up on the good side of the bed today, but I still think a lot of it is reversible - for sure by the next US elections. I personally think it’s actually reversible within 6 months from now, my gut feeling is Trump is running out of steam across the board. My initial prediction back in Feb was that he’d be off to Florida to fondle bimbos with plastic…everything…by July.
He is not a particularly smart, patient or strategic person, and the fates of his sycophants are tied to him. Also, don’t forget all the bigwigs in the inauguration ceremony, if they feel the pinch then he’ll feel the pinch.
Finally, other countries are pragmatic, they want to sell to the US. The only problem, and it’s a big one, is that China has a mental/emotional edge in my opinion, both in the political level and the individual person level. The characteristic of saving face and enduring adversity. I think the Americans simply don’t have that mental fortitude, so they’re going to be part of the pressure on politicians to unfck this.
I dint think that the economy would ever go back to where it was in Feb. Even if the US go back to zero tarrif, china will still exploit the situation and. The rest of the world sees the US differently.
This will however not materially impact valuations - unless people become unemployed and we face a major recession. We are in irrational market territory these days - investors no longer buy shares but an Index, and they buy it „because it always goes up“. There is no view on valuations and shares have become the new bitcoin. This will only reverse in a big recession where people pull out money and we eventually get in the reverse narative of „you can only lose money with shares“.
What does this mean? Bad dip for world economy but no lasting stock market correction (beyond 1-3 months), unless joe sixpack gets unemployed, margin called or foreclosed. Or we face material, disruptive bancrupcies.
What to do: Ride the wave up no matter how stupid valuations and how bad the economic outlook. But prepare to sell once things become very messy. And remember thatvthe first cut may come over night / a weekend, meaning thatvyou will likely exit too late.
Chances are that we over 3 years now have an X2-4, and then at any time (maybe already tomorrow) a -50-85% in a long, painfull 2-3 years bear market. The question today is if we still are in the X phase or not.
Well if you would have suggested that to average people (time the market, sell when going down), they would evidently have lost lots of money in the past.
It might work in the future, but it might as well not. 
A trade deal has apparently been reached between US and CN. Green monday incoming.