Hello from your team at Veritas:
During this current bout of market turbulence, in conjunction with our investment partner, Stratos Investment management, we are reaching out to share some opinions around the current Market environment.
- Our focus is on the impact tariffs will have on the economy, company earnings, and most importantly, the consumer.
- Given Thursday’s gap down in the markets, here are some of our thoughts/bullets on the good and the bad found within our current market….
Good
- The downturn is a reaction to the aggressive Tariff news. It is out now, so the market is repricing itself. This is a short-term event.
- Q1 GDP should be ok. While the economy should slow in Q2, we think it will continue to grow.
- Most of the job losses are in the federal government – right now. On average, the rest of the economy is still looking for qualified employees.
- Valuations have come down significantly with the selloff. Absent the Mag-7, the market is in much better shape today – even post-tariffs.
- Technically, the markets are very oversold.
- Given our longer-term view and using conservative numbers, SIMs risk-reward analysis measures an Upside scenario for the S&P500
Bad
- We don’t know the business impact of tariffs on domestic businesses – won’t likely know that until we get into Q3 (Q2 earnings).
- Credit spreads are near lows and starting to rise.
- VIX is flashing a warning message.
- Technically, the markets have broken trendlines to the downside.
As tariff negotiations with other countries continue, we will get more clarity on what impacts the tariffs will have at which time we expect market volatility to cool.
In the meantime, please let us know if you would like to speak in more detail.
