3 Things: Tariffs, Bear Markets And Inflation

2025-03-13 23:45:00 ET

Summary

• The recent stock market downturn reflects the concern that some of this is being unwound. And the reason for this is rather simple. Tariffs are a corporate fee paid by the importing company at the border.
• The S&P 500 officially entered “correction” territory today. That’s the arbitrary -10% level from its recent high.
• March might be the first time since 2021 that we had a 2 handle on core CPI. Perhaps more importantly, March is also going to be a near exact 2% reading on the headline PCE.

Here are some things I think I am thinking about:

1) Why Does the Stock Market Hate Tariffs?

One of the predominant trends in Corporate America over the last 40 years has been an expansion in margins. It’s one of the primary drivers of the great valuation expansion over this time. As more of the national income has flowed to corporations, their valuations have expanded. And a big part of that was globalization and the ability to outsource labor and materials costs to less expensive regions of the world....

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