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The stock market suffers from President Trump’s announcement on April 2. The “Liberation Day” announcement included harsh tariff rates from our largest commercial partners, causing a broad re -calculation of economic celebrations and American companies.
S&P 500 delivered the successive daily losses to more than 4.5 % for the first time since Covid shook global markets in 2020, which led to a decrease from January to about 17 %. Nasdaq was the worst technological compound. Nearly 6 % fell on Thursday and Friday, leaving 22 % of its last highest levels.
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The reason for the decline is that stock prices depend on revenues and profit growth. If global tariffs raise prices, Topline sales may falter. If companies are not able to transfer the customs tariff costs to consumers who are already financial hardship, it will suffer minimum.
The re -classification of shares is a harsh account, given that Wall Street was generally optimistic about the arrows that entered the year 2025.
The dramatic decline caught the attention of Jim Kramer. Cramer, a famous investor for a long time, has been famous for a well -known and correct federal reserve during the great recession period, “They know nothing” when the federal reserve hesitated to reduce interest rates faster to support the economy.
On April 4, CRAMER cast an explicit assessment of the Trump tariff strategy that investors must hear.
Is the economy on the threshold of a moment of observance go to the tendons of the knee again?
The stock market has declined quickly and severely, but the definitions are not the only reason that made the S&P 500 of the cliff last week.
Economists have noticed cracks in the economic shields for a period of time, and fears have escalated since January that the stocks, which have increased significantly over the past two years, have been priced to perfection.
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While inflation is less than its peak, the inflation stopped, which pressed for consumer spending, which was already on the ropes.
In 2022, the Federal Reserve was late, lately, to start the most honest monetary policy since the Federal Reserve Chairman Paul Volker dealt with inflation in the early eighties. The move succeeded, since the consumer price index has decreased to less than 3 % of more than 8 % in June 2022.
However, inflation has infiltrated up to 2.8 % in February from 2.4 % in September.
This is a problem for the Federal Reserve, given that it plays a key in its plans to reduce interest rates to ignore problems in the job market.
Unemployment increased to 4.2 % of 3.5 % in 2023. interest rates in the Federal Reserve were reduced in September, November and December only to stop additional discounts due to sticky inflation.
As a result, the federal reserve sits on his hands, and caught between the competing states to ensure low inflation and unemployment – often contradictory tasks. Raising prices for inflation lists risk job losses, while reducing the protection rates of enlarged jobs.
President Trump’s definition policy is exacerbated by this dynamic.
While supporters argue that the definitions are the best way to manufacture the screams of arms to America, the definitions increase the costs of goods, which adds inflation at a time when the Federal Reserve needs to decrease so that it can support the economy with more price discounts.
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When realizing the situation, investors rushed to pressure the sale button to pick up gains on the fear that the American economy is heading to stagnation or worse.
Jim Cramer does not remove words on the customs tariff plan
Looking at the economic background, the collapse of the stock market last week is less surprising. However, this is a cool comfort for Americans who shake their heads in the decrease in the values of the portfolio in retirement accounts.
Cramer has participated in frustrating investors, who has been participating in the market since the mid -eighties of the last century in Goldman Sachs. Cramer profession means that he had a seat in the front row of the savings and loans scandal, the prosperity of the Internet, the statue, the wonderful financial crisis, the Covid, and the 2022 bear market.
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In short, Cramer has witnessed his share of good and bad stock markets and economies. He did not like what he saw regarding the definitions yet.
Kramer said to Arin Burnett in a CNN interview. “I deepened the numbers today, and the numbers were not logical … the numbers they did … the plan that they had with the sports equation, I mean, are you joking with me? What about the fact that it was a mistake?”
While the White House has set mutual taxes, the definitions announced were not dependent on a mutual account. Instead, “reflected the trade deficit that we have with this particular country divided by their exports,” according to veteran analyst Peter Bokarfar.
“I feel like I am a lollipop,” Kramer confessed. “They dismantled it. They did it in a very bad way, and I was very let down … that’s what they reached?”
Hope was that the definitions would be included in fair negotiations. This may still happen, especially given the escalating pressure on the president to make concessions. However, this does not make the losses that investors feel easier to swallow.
CRARMER Show is a great reprimand on how to affect the tariff policy on the S&P 500.
“None of this happened,” said Kramer. “I feel bad because many people are losing money when this happens. The way they dealt were Bush’s league … they installed the stock market and did not give us anything.”
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