By Peter Wechsler
President & Co-Founder, Franklin Retirement Solutions
[email protected]
And By Robert E. Quittner, Jr. CFP® & CMFC™
Investment Advisor Representative
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The two of us are usually the first ones in most mornings. It’s great, since it gives us a chance to talk and strategize—Peter can share stories about the restaurant he ate at the night before, and Rob can talk about his upcoming weekend golf plans.
When we came in yesterday (Thursday) morning, both our heads were spinning. Tariffs… again.
It turns out that a court we’d never heard of (the U.S. International Trade Court) ruled on Wednesday night that many of the Trump tariffs were illegal. Rob checked the futures market, and a big smile lit up his face—Nasdaq futures were up almost 2%. We both thought it was going to be a good day in the market following the court’s ruling.
By the time the market opened, it was much lower than the futures that morning. The two of us chatted again and quickly realized what was going on. Yes, the trade court had found many tariffs illegal—but then we began reading about how there are other ways for Trump to get around the tariff ruling. Peter just shook his head. Rob laughed.
According to Austan Goolsbee, President of the Federal Reserve Bank of Chicago, market uncertainty will likely continue, as the administration may find alternative ways to impose tariffs. This uncertainty, according to Mr. Goolsbee, is not a good thing, and he says: “If people can’t count on consistent policy, then they’re just going to slow down and not act.” In other words, businesses will suffer, which could eventually lead to a recession.
Late in the afternoon, the Appeals Court temporarily reinstated the Trump tariffs. What’s this all mean to consumers? In the morning, retailers were trying to import as much as possible with a break in the tariffs. Cargo ships would fill up again, the ports would be bustling again, and store shelves would be restocked. By this afternoon, tariffs are back again.
Economists are concerned about the big decisions made by businesses and consumers. Is this a good time to buy a new car? Should we invest in that new factory? Should we invest in new, modern equipment to reduce manufacturing costs? Should we buy a new house? With so much uncertainty and unpredictability, which way will the economy go and where are the markets headed?
There are no easy answers. All we can do at Franklin Retirement is stay close to the markets and invest our clients’ money carefully, based on their risk tolerance and risk profile.
Enjoy the cool weekend. We may even see sunshine on Sunday…
Rob and Peter