The Broader Economic Impact of Tariffs, Media-Driven Sentiment, & The Best Investment Advice Ever

The Money Wise guys are back at it again, and this past week showed a mixed market, with the Dow slipping 241 points (-0.5%), the S&P 500 declining 14.5 points (-0.2%), and the NASDAQ dropping 104 points (-0.5%). Despite the losses, year-to-date gains remain solid, with the Dow up 4.1%, the S&P 500 up 2.5%, and the NASDAQ up 1.1%. The discussion highlights continued market volatility, particularly Friday’s selloff following a stronger-than-expected average hourly earnings report, which reignited concerns over inflation. While the unemployment rate ticked down to 4%, and job growth was slightly below expectations, the markets reacted negatively, underscoring the ongoing “perversion” where good economic news can trigger selling pressure due to fears of Federal Reserve policy adjustments.

The guys also welcomed new associate advisor Louie to the show, discussing his background and fresh perspective as part of the next generation of investment management. Shifting focus back to market narratives, they emphasize the impact of media-driven sentiment, particularly the attention given to inflation concerns and commodity prices, like the rising cost of eggs and brisket. The guys also reiterate expectations for heightened market volatility in 2025 and go into a discussion on the broader economic impact of tariffs and government policies. Tune in to hear more about the week’s market moves, inflation’s influence on trading behavior, and how investors can navigate the uncertainty ahead.

The Broader Economic Impact of Tariffs

Tariffs, when used strategically, can be a powerful tool to protect domestic industries, encourage American manufacturing, and even generate government revenue. By making imported goods more expensive, they level the playing field for U.S. businesses, incentivizing consumers to buy American-made products and keeping jobs at home. Plus, in a global economy where other countries play by their own rules, tariffs can be a way to push back against unfair trade practices. However, it's essential to recognize that excessive or poorly targeted tariffs can lead to unintended consequences. For instance, they can increase costs for consumers and businesses that rely on imported materials, potentially leading to higher prices and reduced economic growth. Therefore, while tariffs can be beneficial in certain contexts, they must be implemented with caution to avoid escalating trade tensions and harming the very economy they aim to protect.

In the second hour, the Money Wise guys share The Best Investment Advice Ever . You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.