
Matt Orton explains why dips are viable in the US market
, Head of Advisory Solutions and Market Strategy,
Raymond James Investment
,
says following a strong rally, the US market's future direction hinges on marginal policy shifts, especially concerning tariffs. Investors should prepare for potential dips, particularly if they missed opportunities earlier. While earnings justify market gains absent tariffs, the market has already factored in a baseline tariff, reacting to specific trade deal developments and future progress.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
The truth behind OS scheduling algorithms
expertinspector
Undo
Trump's policy is Olive branch and iron fist, then olive branch, and then iron first. What is coming next?
Matt Orton:
What we are going to continue to see is this back and forth. It has been happening since Liberation Day on April 2nd and the market has digested that. At first, the market prepared itself for the worst, very high tariffs across the rest of the world and the rally that we had through the month of April, throughout May has been quite spectacular. So, what the market has realised is earnings, the base from which we are going to come, how the economy has been growing, all of that is in a very solid place. The damage that tariffs are going to inflict is not going to put the economy into a recession. That has never been my base case and the pivots that we have seen from the administration help to confirm that.
But now that we have had this strong rally and since we do not really have the positive catalysts of the earning season coming, I suspect the market is going to be driven by these marginal directional changes of administration. I tell investors to be ready to use some of that downside if they were not as aggressive towards the bottom of the market in April because again the market is going to be able to see through all of this once we start getting increasing clarity.
Are markets already capturing a bit of an upside and are markets already assuming that tariff is not going to be as high as what was indicated in March and April?
Matt Orton
: The markets are baking in some of that. Obviously, the markets are not baking in the entirety of zero tariffs going forward. The market has digested a 10% baseline tariff across the entire world and now the reactions are going to be very much with respect to who is getting more, who is having the trade deal signed, and where we might start to progress in the near future. When you look at earnings, you can justify the move that we have had in the market because absent tariffs is obviously counterfactual, but if we had not had tariffs put in place, we would probably be at 7,000 plus on the S&P 500 after an earnings season that was almost double of what expectations were.
Live Events
You Might Also Like:
Trump tariff push to make iPhones dearer for US market, labour cost may rise 13 times: Experts
We have got some big companies like Nvidia reporting this week which are probably still going to be strong. I think the markets have baked in some good news, but they are not overestimating that, which is why I think dips are viable in the US market.
The good news here in India is that we have overtaken Japan to become the fourth largest economy in the world. But talking about Japan, the fact that their core inflation is already at a two-year high could perhaps force the BOJ to hike as well. What are you making of the Japanese economy because there has been a lot of volatility in their bond markets?
Matt Orton:
Yes, there has been and when you look at all of the major global bond markets, there has been a lot of volatility and there has been a lot of steepening of yield curves, long-dated yields not just in the US but across all of the major economies and bond markets have been very elevated. Part of that is idiosyncratic, part of that is the large institutional buyers in those countries just have not been as aggressive. Japan, in particular, has not seen a lot of buying flow from pensions.
If anything, there may have been a little bit of selling from some of the insurance companies that tend to be systematic buyers. But the Japanese economy is tied to trade. There is uncertainty with respect to where that direction is going to go, which is why any sort of trade deal that gets inked in the near future can be a very positive catalyst for that market because before we got into April and before you had the large reciprocal tariffs, Japanese earnings expectations were one of the only countries around the world where you actually had positive and accelerating earnings expectations from analysts.
So, if we can get back to a place where there is more certainty around trade, that will benefit the Japanese economy overall. It is a country to keep eyes on, but don't wade into that too early.
You Might Also Like:
Wall Street on edge this week: Will Nvidia's earnings revive markets or fuel chaos amid soaring U.S. Debt?
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Time of India
2 minutes ago
- Time of India
Trump deals bring some clarity for world's manufacturing base
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads After months of uncertainty, President Donald Trump 's latest tariff deals are providing clarity on the broad contours of a new trade landscape for the world's biggest manufacturing on Tuesday announced a deal with Japan that sets tariffs on the nation's imports at 15%, including for autos — by far the biggest component of the trade deficit between the countries.A separate agreement with the Philippines set a 19% rate, the same level as Indonesia agreed and a percentage point below Vietnam's 20% baseline level, signaling that the bulk of Southeast Asia is likely to get a similar rate.'We live in a new normal where 10% is the new zero and so 15% and 20% doesn't seem so bad if everyone else got it,' said Trinh Nguyen, senior economist for emerging Asia at Natixis. At a 15%-20% tariff level, it's still profitable for US companies to import from abroad rather than produce similar goods at home, she US Treasury Secretary Scott Bessent said he'll meet his Chinese counterparts in Stockholm next week for their third round of talks aimed at extending a tariff truce and widening the discussions. That suggests a continuing stabilization in ties between the world's two largest economies after the US recently eased chip curbs and China resumed rare earths exports.'We're getting along with China very well,' Trump told reporters on Tuesday. 'We have a very good relationship.'Throw it all together and a level of predictability is finally emerging after six months of tariff threats that had at one point jacked up tariff levels to 145% on China and near 50% on some smaller Asian exporters. Investors cheered the moves, with Asian shares rising the most in a month and contracts for the S&P 500 up 0.2%. The Nikkei-225 index in Japan jumped 3.2%, with Toyota Motor Corp. and other carmakers leading the gains.'What's been interesting to me is that equity markets still have been fairly rosy about the changes,' Albert Park, chief economist at the Asian Development Bank, said in a Bloomberg Television interview. 'I'm not sure they've priced in fully all of the effects that are likely to occur from the disruption of higher tariff rates.'Back in April, Trump hit the pause button on the steepest levies after a rare combination of weakening US stocks, bonds and the dollar showed investors were unnerved by his protectionist salvos. That bought time for policymakers from Tokyo, Manila and across the globe to negotiate more palatable the latest deals bring some relief, key questions remain. The Trump administration is still considering a range of sectoral tariffs on goods like semiconductors and pharmaceuticals that will be critical for Asian economies including Taiwan and India — both of which have yet to announce tariff agreements with the Korea is also more exposed to sectoral tariffs, even though the Japan deal provides a potential template for new President Lee Jae Trump moves quickly on talks with countries accounting for the bulk of the US trade deficit, he has said he may hit around 150 smaller countries with a blanket rate of between 10% and 15%.With some certainty on tariff levels now emerging, businesses with complex supply chains across Asia and still reliant of the US consumer can start to game out how they'll shift operations to minimize the hit to like the first trade war in 2018, the latest tariff announcements are likely to spur companies to increasingly shift production outside of China. The average tariff rate on the world's second-largest economy remains the highest in the region, and continued White House pressure on the nation's technology and trade ambitions means companies may find more stability and industry groups have been flagging for months that uncertainty is worse than tariffs for investment. The manufacturing sector across the ASEAN region saw the most notable weakening since August 2021, according to S&P PMI, led by a sharper decrease in new orders, major job cuts and weaker purchasing front-loading of shipments from Asia to the US to get ahead of the incoming levies will likely slow once the new rates kick in. While there's relief that tariff rates for Southeast Asian economies and 15% for Japan are lower than some of Trump's earlier threats, the reality is that they're far higher than they were before he took latest deals 'continue the trend of tariff rates gravitating towards the 15-20% range that President Trump recently indicated to be his preferred level for the blanket rate instead of 10% currently,' Barclays Plc analysts including Brian Tan wrote in a note. That skews risks to GDP growth forecasts for Asia 'to the downside,' they US consumers who have so far been spared the tariff ticket shock, economists warn there's likely to be some pass through in the months ahead. Goldman Sachs Group Inc. economists now expect the US baseline 'reciprocal' tariff rate will rise from 10% to 15% — an outcome that threatens to fuel inflation and weigh on economic Reserve Chair Jerome Powell has argued he wants to see where tariffs land and how they filter through the economy before cutting interest rates — much to the annoyance of now, the US president is hailing a win on trade, and investors seem overall relieved.'I just signed the largest trade deal in history — I think maybe the largest deal in history — with Japan,' Trump said at an event at the White House on Tuesday after announcing the deal on social media. 'It's a great deal for everybody.'


Time of India
15 minutes ago
- Time of India
Renault Triber facelift launched at Rs 6.29 lakh: What's new
Renault India has launched the much-anticipated Triber facelift, priced from Rs 6.29 lakh, ex-showroom. The model will be available in four trims namely, Authentic, Evolution, Techno, and Emotion, with the latter setting you back by Rs 9.16 lakh, ex-showroom. Bookings for the model have commenced across the brand's dealership network in India. Here's a quick look at what's changed. 2025 Renault Triber: What's new As part of this update, the changes come mostly in the form of cosmetics and new features. Up front, the car now features sleeker LED headlamps with integrated DRLs, a revised bumper with silver skid plates. Other highlights include a gloss black grille with vertical slats, new Renault logo at both ends, and the addition of fog lamps - a feature that was missing before. Kia Carens Clavis first drive review: Game-Changer for electric MPVs? | TOI Auto by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This Could Be the Best Time to Trade Gold in 5 Years IC Markets Learn More Undo On the sides, the car more or less, remains unchanged save for newly-designed 15-inch alloy wheels. At the rear, it features redesigned LED taillamps with smoked effect, a gloss black panel between the tail lamps, and 'Triber' badging on the boot lid. Furthermore, it also gets a revised bumper and skid plates at the rear as well. The new Triber will be available in three new colour options: Amber Terracota, Shadow Grey, and Zanskar Blue. Inside, the cabin now features a dual-tone dashboard, an 8-inch touchscreen that supports wireless Android Auto and Apple CarPlay. Renault has also added LED cabin lighting, new upholstery, and a digital instrument cluster. In terms of practicality, the third row can be removed entirely, freeing up to 625 litres of boot space. Rear AC vents are available for passengers in the second and third rows. On the safety front, the updated Triber now comes with six airbags as standard across all variants. Additional safety features include Electronic Stability Program, Tyre Pressure Monitoring System, ISOFIX mounts for child seats, and front parking sensors. Under the hood, the Triber continues with its 1.0-litre petrol engine that produces 72 hp and 96 Nm of torque. While all variants come with a 5-speed manual gearbox, the top-spec Emotion trim also gets the option of an AMT. Discover everything about the automotive world at Times of India .


Business Standard
16 minutes ago
- Business Standard
Nifty above 25,100 level; auto shares jump
The key equity indices continued to trade with minor gains in morning trade as investors assessed stock-specific triggers amid Q1 earnings announcements. The Nifty traded above the 25,100 level. Auto shares gained after declining in the past trading session.. At 10:25 AM ST, the barometer index, the S&P BSE Sensex advanced 162.30 points or 0.20% to 82,350.08. The Nifty 50 index rose 46.90 points or 0.19% to 25,107.90. In the broader market, the S&P BSE Mid-Cap index shed 0.26% and the S&P BSE Small-Cap index fell 0.18%. The market breadth was negative. On the BSE, 1,492 shares rose and 1,865 shares fell. A total of 166 shares were unchanged. Buzzing Index: The Nifty Auto index added 0.98% to 24,111. The index declined 0.74% in the past trading session. Tata Motors (up 2.24%), Maruti Suzuki India (up 1.53%), TVS Motor Company (up 1.1%), Bajaj Auto (up 1.02%) ,Mahindra & Mahindra (up 1.01%), Bharat Forge (up 0.76%), Hero MotoCorp (up 0.63%), MRF (up 0.51%), Exide Industries (up 0.39%) and Eicher Motors (up 0.17%). Result today: Infosys (up 0.49%), Coforge (down 0.41%), Dr Reddy's Laboratories(down 0.11%), Tata Consumer Products(down 0.84%), Aditya Birla Real Estate(down 1.19%), Bajaj Housing Finance(up 0.91%), Bikaji Foods International(up 0.39%), CMS Info Systems(down 1.46%), Force Motors(down 0.31%), Maharashtra Scooters(down 0.90%), MAS Financial Services(down 0.91%), Mahindra Holidays & Resorts India(up 0.75%), Persistent Systems(down 0.74%) will announce their result later today. Stocks in Spotlight: Indian Railway Finance Corporation (IRFC) rallied 2.60%after the companys net profit rose by 10.70% to Rs 1,745.69 crore in Q1 FY26 as against Rs 1,576.83 crore posted in Q1 FY25. Inox Wind (IWL) shed 0.30%. The company said that it has secured a 51 MW order from First Energy (FEPL) for the supply of its 3 MW class turbines, with the contract also encompassing limited scope EPC and multi-year post-commissioning O&M services.