Trade Deals Buoy Markets as Uncertainty Remains

May 16, 2025

Market strategist Sarah Hunt analyzes the potential volatility in 2025 due to tariffs, while trade tensions ease, lifting the S&P 500. Meghan Robson expresses caution in the credit markets as the Fed hints at rate cuts. Bill Lee highlights the surge in shipping volumes due to a temporary US-China trade truce. Experts discuss the implications of low oil prices and a significant Middle Eastern trip by President Trump. The complex interplay of tariffs, investment strategies, and dollar valuation takes center stage.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Tariffs Impact on Earnings

Tariffs at higher levels will strain corporate margins and earnings.
Earnings could decline near-term, making current high valuations look expensive.

INSIGHT

Credit Markets and Tariffs

Tariffs remain significantly higher than at the start of the year, averaging around 12%.
The credit markets seem optimistic, but spreads are expected to widen gradually.

ADVICE

Fixed Income Duration Advice

Avoid loading up on long-end Treasury bonds now; yields are expected to fall further.
Favor shorter duration investment-grade bonds for better risk management.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Surveillance hosted by Tom Keene & Paul SweeneyMay 16th, 2025
Featuring:
1) Sarah Hunt, Chief Market Strategist at Alpine Saxon Woods, on the yet-to-be-seen effects of tariffs on global markets and why she expects more equity volatility in 2025. The S&P 500 on track for one of its best weeks this year, as easing trade tensions between the US and China buoyed appetite for risky assets.
2) Meghan Robson, Head of US Credit Strategy at BNP Paribas, on why she remains cautious on credit markets in an uncertain environment. The dollar weakened again against major peers and the 10-year yield was lower after declining Thursday, as economic data spurs speculation the Fed will cut interest rates twice this year. This, as traders await negotiations around the US budget with its promise of large tax cuts and a potential impact that will have on the fiscal deficit.
3) Bill Lee, Chief Economist at the Milken Institute, brings us into the market open and discusses uneasy progress in US trade deals and what he makes of the outcome of the US-China temporary trade truce. The 90-day reduction in tariffs has already led to a surge in transpacific shipping volumes, with bookings from China to the US particularly strong, and freight rates are rising as a result.
4) Ellen Wald, Senior Fellow at the Atlantic Council, joins for a discussion on low oil prices and what President Trump's trip to the Middle East could mean for the outlook for gas and energy prices. The International Energy Agency expects a global glut in oil supply this year and next due to increasing production and slowing demand growth.
5) Kelsey Berro, Executive Director: Fixed Income at JPMorgan Investment Management, discusses reduced tail risk of a hard landing and JPM's case for sub-trend growth in 2025. Some officials, like Atlanta Fed President Raphael Bostic, expects the US economy to slow this year but not fall into recession. He also expects one rate cut in 2025.

See omnystudio.com/listener for privacy information.