🚫 It’s not about the tariffs anymore

Sure, the near 10% sell-off of the S&P 500 came right around the time that Washington began making swift and significant moves on tariffs, but there’s a bit of a pickle you get into when trying to chalk up the sell-off to tariff talk alone. In short: if this is actually about tariffs, why are some of the most tariff-vulnerable stocks in the market doing just dandy, all things considered? 

Instead what we’re seeing is AI-linked momentum stocks tumbling, financials falling, credit spreads widening, cyclicals falling off the axel, and crypto in a rut. Meanwhile, GM and Ford — two companies that would be categorically screwed by tariffs — are both up since the February 19 market close. You’re going to have a hard time arguing that the market is in freefall over tariffs, except naturally for the stocks actually affected by tariffs, which are holding steady, because what, they and only they were pricing in tariffs? That’s a bit of a stretch, yeah?

So, what gives?

Think about all this tariff talk and its impact on the market as just the inverse of quantitative easing, argues Sherwood News Markets Editor Luke Kawa. Let’s hear the guy out:

“What quantitative easing accomplishes is that it offers a signal to the market that monetary policy is locking in to a prolonged period of providing support for the economy and financial system. Simply, if the Federal Reserve is buying bonds, it’s a helluva long way from raising rates. 

To compare this to tariffs, every minute US President Donald Trump spends musing about tariffs is a minute he isn’t talking about deregulation or tax cuts. It’s a revealed preference on where his priorities lie. It’s a signal that policy is not pointed in a pro-growth direction. And he is talking about tariffs. A lot.”

The Takeaway

For the past several decades, the policy of the US president has been economic growth. We’ve had direct statements from leadership indicating that this is not the case, with Treasury Secretary Scott Bessent straight up saying the stock market is not the administration’s report card, for now. 

Rather, things that would work counter to growth — among them, reduced government spending — are the policy, and if you’re a US stock bull listening really hard for words like “deregulation” or “tax cuts” and instead you’re hearing “tariffs” and “tariffs” and “tariffs” and then “tariffs” once more for good measure, well, maybe that’s what’s at the core of the sell-off. 

At least now it sure looks like the unwinding is unwinding.

A visit to the Magic Kingdom is less magical than ever

It’s not the cost. It’s not the lines. This year, kids coming through the turnstiles of Disney World might find the swampland filled with disappointment. Exclusive data provided to Sherwood shows why.

• Puma shares posted their worst day ever as the German sneaker giant warned of weaker profits and competition it can’t kick

• Crocs, meanwhile, got a nice bounce following an upgrade from Loop Capital for the funky shoe

• Groupon shares surged over 43% after a better-than-expected earnings report following a “bumpy” third quarter

• February Producer Price Index

• Earnings expected from Dollar General, Ulta Beauty, and Weibo