Mornings With Markman - July 15
What if these professional money managers realize Trump's tariff rhetoric isn't an unbreakable commitment?
Professional money managers are caught in a conundrum. Since “Liberation Day,” they have been betting that American exceptionalism is dead. They see President Trump's high tariffs as the executioner, choking off trade and suffocating U.S. dynamism. They're missing the glaring truth, the open secret hiding in plain sight: Trump's hand is weak. His trade partners know it.
You have seen the headlines about tariffs, trade wars, and American competitiveness. This narrative, swallowed whole by the "pros," claims the U.S. is committing economic suicide. But they're failing to grasp the simple, inconvenient truth: tariffs aren't a weapon against foreign powers. They're an import tax paid by Americans. Every dime, every penny, comes out of U.S. pockets.
Despite this, the latest Bank of America Fund Manager Survey shows that pros are all-in on American exceptionalism's demise. These gurus are missing the plot. They've wildly overestimated the President's resolve, believing he'll follow through on threats that ultimately cripple American competitiveness.
Look at the Nvidia (NVDA) chip drama with China. The President took a hardline stance, cutting off Chinese access to all artificial intelligence chips. However, when the Chinese cut off access to rare earth metals, President Trump folded. The Chinese are getting access to those chips, and probably much more.
What if these professional money managers, who have seriously underweight U.S. stocks, finally realize Trump's tariff rhetoric isn't an unbreakable commitment? What if they grasp it's a high-stakes bluff, he's forced to fold? That the public drama is a show of force, one that inevitably gives way to economic reality, forcing the very threats they fear to simply fade away?
Pay no attention to the skeptics who wring their hands over politics and outdated models. You need to be quietly accumulate shares in the best businesses on weakness. That's what we guide our subscribers to do our Digital Creators & Consumers newsletter. The U.S. stock market is under-priced, not because risks aren't real, but because the market is missing the grand miscalculation.
Trump's tariff stance isn’t vanishing due to cleverness; it’s collapsing under its own weight, hiding in plain sight. And when those money managers finally see it, that capital, currently sidelined, or worse, invested in European stocks, will come back to U.S. stocks with a vengeance.