Source: Barron Chinese

In the face of the capriciousness of Trump's tariffs, investors should avoid "stress reactions", be patient and survive the market volatility period safely is the best strategy. .

The countermeasures were quickly introduced in response to US President Trump's decision to impose a 10% tariff.

After the U.S.'s tariffs on China came into effect, it announced a 10% tariff on crude oil, some machinery and cars imported from the U.S. and a 15% tariff on coal and liquefied natural gas products. It will take effect on February 10.

Last weekend, the United States announced the imposition of tariffs on Mexico and Canada on the grounds of illegal immigration and fentanyl. On Monday (February 3), Trump delayed plans to impose tariffs on Mexico and Canada for at least one month after the two agreed to ensure border security. The question now is whether the United States and the United States can reach a similar agreement to prevent further escalation of the trade war.

Trump is expected to hold a telephone meeting with leaders. White House press spokesman Karoline Leavitt told reporters earlier Tuesday (February 4) that the call will be conducted "soon."

Julian Evans-Pritchard, head of economic research at Capital Economics, believes that tariffs imposed on the United States may He was postponed or cancelled before it came into effect on February 10, saying: "To a large extent, the move was a warning to the United States that if necessary, it would inevitably be countermeasures and also leave them for themselves. ”

Evans Pritchard also pointed out that the countermeasures target only US goods worth about $20 billion, compared to Trump targeting 4,500 $100 million in goods. In addition, tariffs on strategic commodities such as semiconductors and drugs have not been raised.

It also stated that it will launch an antitrust investigation into Google, owned by Alphabet (GOOGL), which has no direct connection with Trump's tariffs.

Two U.S. companies have been included in the “Unreliable Entity List”, namely Calvin Klein’s parent company PVH (PVH) and biotechnology company Illumina (ILMN).

Xinhua News Agency quoted a statement released by the Ministry of Commerce as saying: "These two entities violate the normal market trading principles, interrupt normal transactions with enterprises, and take discriminatory measures against enterprises, seriously damaging the legitimate rights and interests of enterprises. ”

The Ministry of Commerce said that this list is only aimed at a very small number of foreign entities that endanger security, and foreign entities that are honest and law-abiding have no need to worry at all.

It has also announced export controls on rare metals such as tungsten, tellurium, bismuth, molybdenum and indium that are crucial to the manufacturing of electronic products. It is the mining of these materialscountry.

There are different views on tariffs within the United States. Economic advisers such as Treasury Secretary Scott Bessent downplayed the tariffs, describing Trump's strategy as "to reduce the situation by escalating the situation", suggesting that tariffs are a a negotiation tool.

Investors welcome the U.S. delays imposing tariffs on Mexico and Canada, but the tariff issues targeted may be even more difficult. Stifel chief Washington strategist Brian Gardner believes that avoiding tariffs seems to be Trump’s real plan.

The United States imports from more than exports, as is the case in 2024

Black: Exports from exports

Blue: Imports from imports

Note: December 2024 data has not been released yet, source: U.S. Census Bureau

When the tariff threat became a reality last Friday, Wall Street immediately fell. After the U.S. stock market has recovered some lost land after the U.S. stock market announced the postponement of tariffs on Mexico and Canada, but ordinary investors want a safer and more predictable place for their funds.

In the short term, the stock market will not be a safe haven, and there are very few places to hide now. Corporate profits can be hit hard, leading to rising risks in investing in stocks, depending on how long trade tensions last. Bank of America strategists estimate that the S&P 500's overall earnings could drop as much as 8%.

There was previously believed that small-cap companies focusing on the United States would benefit from Trump's protectionism, but this view also seriously misleads investors: the two small Russell 2000 and S&P 600 The stock index fell even more than the S&P 500.

Sharp volatility in stock markets will not disappear anytime soon, as Wall Street is uncertain whether tariffs are or negotiation strategies, with the VIX panic index soaring nearly 12% on Monday to above 18.

Truit U.S. economic director Michael Skordeles and Chief Market Strategist and Co-Chief Investment Officer Keith Lerner wrote in the research report, "The stock market's The upward trend has not changed, but the latest trends in tariff issues highlight the possibility that the stock market's upward trend is interrupted and downward. "

So, in this type of roller coaster market, the key is to invest money in the ability Stocks that have withstood the market fluctuations are a typical example. Procter & Gamble (PG) was one of the largest gainers in the Dow Jones Index on Monday, with a dividend yield of 2.4%. United Health (UNH), Verizon Communications (VZ), Merck (MRK) and IBM (IBM) and other countries have paid considerable dividendsStocks also achieved a rise.

Julie Biel, chief market strategist at Kayne Anderson Rudnick, said in an interview with Barron's magazine that investors have summarized some experience from Trump's first term. Dividend stocks are a great way to deal with stock market volatility.

Integrity Viking Funds chief investment officer Mike Morey is also optimistic about dividend stocks, but he believes investors don't have to be limited to more conservative defensive stocks.

Broadcom (AVGO) is the largest holding of Integrity Dividend Harvest Fund, a fund managed by Morey. It also holds shares of Corning (GLW), as well as energy and utilities. stocks such as TC Energy (TRP) and NextEra Energy (NEE), as well as large bank stocks such as Citigroup (C) and JPMorgan Chase (JPM).

Morey said: "We try to keep volatility low, focusing on companies that not only pay dividends, but also plan to increase their dividends. Dividend dividend stocks are due to exciting news in the field of artificial intelligence. Leave it alone, so there are many attractive opportunities to find. ”

Investors can also consider traditional safe-haven assets such as U.S. Treasuries and gold. Treasury yields fell on Monday, which could be a sign that investors are rushing into the market amid turmoil. Gold has been tested as a great tool for hedging volatility and has recently hit an all-time high of $2,850 per ounce.

Thierry Wizman, a global forex and interest rate strategist at Macquarie, believes that the dollar may continue to rise as investors seek hedge.

Witzmann wrote in his research report that the US dollar "will attract inflows as a safe haven currency in uncertain times." He also believes that "if the tariff problem continues to disappear, the risk market will be under pressure. , because investors generally believe that tariffs will slow GDP growth, reduce corporate operating margins, and lead to higher costs. ”

However, in the face of the capricious Trump tariffs, investors do not There should be a "stress response" and negotiations are a page in Trump's "script" and anything can change instantly, just like Trump postponed tariffs on Mexico and Canada on Monday. "It's hard to know what the end result is, and investors need to be patient and safely through market volatility." >Ross believes that for safety reasons, he will not buy consumer staples or non-essentials stocks, while energy, financial and health care stocks can bring effective defenses, which are more important when stock market volatility increases. It is possible to buy betterChance.