Oh Mr. President, what have you done? The TPP weekend wrap.

Oh Mr. President, what have you done?

The tariff announcements triggered the steepest weekly stock decline in five years and fund managers around the globe are reaching out to clients to instil a little calm during the eye of the storm.

Advisor investment strategies are generally geared toward long-term horizons and most caution against panic buying and selling. That remains true in response to the tariff moves. However, many investment committees and chief investment officers at advisory firms have sent clients notes with further advice on navigating the current turmoil.

Merrill Lynch Chief Investment Officer Chris Hyzy preached patience in a note to investors.

"Given the current high level of uncertainty and the significant potential for change based on new deals, negotiations, and/ or targeted adjustments, it is important to let the volatility settle down, and at the same time, prepare a plan to act on as the dark grey clouds fade away," Hyzy wrote.

Ed Yardeni of the eponymous firm Yardeni Research has emerged as a voice advocating for US stocks.

A “great buying opportunity is being created here,” the Wall Street veteran said in a Bloomberg TV interview.

Yardeni, who had reduced his own target for the benchmark twice last month, expects the Trump administration to face pressure and political backlash, with a growth slowdown that may even factor into the midterm elections in 2026.

Trump is going to “back off in a way that he can declare a victory with some concessions” from US trading partners.

Even veteran investor Bill Gross posted on X (formerly Twitter) that next week will present ‘buying opportunities’.

Markets

Stocks fell sharply in response to the Trump administration’s announcement of a broad range of harsher-than-expected tariffs. Small-cap stocks lagged as the Russell 2000 Index lost about 10% and ended the week down over 30% from its all-time high, while the S&P 500 Index posted its worst weekly performance in over five years (since the COVID pandemic).

We also saw the largest one-day declines for some indices since 2020 on Thursday, and stocks then continued to slide through Friday. Several countries, including China, began to announce retaliatory tariffs and plans for negotiations with the U.S.

Expectations for the number of Federal Reserve interest rate cuts in 2025 jumped following the announcement, as investors wagered that negative growth effects from the new policies will force the Fed to ease monetary policy to support the labour market and spur economic growth.

In a speech on Friday, Fed Chair Jerome Powell acknowledged that economic “uncertainty is high” and that the “significantly larger than expected” tariff increases are likely to cause “slower growth.” However, Powell also noted that the “size and duration of these effects remains uncertain” and that the “economy is still in a good place,” which leaves the central bank well positioned to wait for greater clarity before adjusting monetary policy.

Elsewhere, the Labor Department’s closely watched nonfarm payrolls report supported a more optimistic view of the economy. The report showed that U.S. employers added 228,000 jobs in March, a sharp increase from February’s downwardly revised reading of 117,000 and well ahead of estimates for 130,000. The unemployment rate ticked up to 4.2%.

Europe

The pan-European STOXX Europe 600 Index ended 8.44% lower, also the biggest drop in five years. Major stock indexes also fell sharply. Italy’s FTSE MIB lost 10.56%, Germany’s DAX tumbled 8.10% and France’s CAC 40 Index plunged 8.10%.

The UK’s FTSE 100 Index plummeted 7%.

Annual consumer price growth in the eurozone ticked down in March to 2.2% from 2.3% in February, although underlying price pressures were softer than forecast, adding to expectations of an interest rate cut in April. However, Eurostat data showed that the labour market remained tight in February, although the jobless rate eased to a record low of 6.1%.

House price growth was flat in March ahead of tax changes at the end of the month, snapping seven consecutive months of gains. Bank of England data also indicated that activity had moderated. Lenders approved 65,481 mortgages in February, down from 66,041 in January and the lowest number since August last year.

Asia

As investors digested the Trump administration’s announcement of a 10% tariff on all imports into the U.S., as well as a larger-than-expected reciprocal tariff of 24% to be applied on Japan, Japan’s stock markets plunged over the week.

The Nikkei 225 Index fell 9% and the broader TOPIX Index registered a 10% loss.

Interest rate-sensitive Japanese banks led the sell-off amid a sharp decline in Japanese government bond yields, with the yield on the 10-year JGB retreating to 1.18%, from 1.56% at the end of the previous week. Japan’s carmakers continued to lag on account of separate 25% auto levies previously announced by the U.S., from which Japan said it would continue to request exemptions.

Mainland Chinese stock markets declined in a holiday-shortened week. For the week ended Thursday, the onshore benchmark CSI 300 Index fell 1.37% and the Shanghai Composite Index shed 0.28% in local currency terms. In Hong Kong, the benchmark Hang Seng Index retreated 2.46%. Stock markets on the mainland and Hong Kong were closed Friday for the Qingming Festival but will no doubt catch up with Friday’s fall on Monday when they reopen.

The Week Ahead

Next week we get the latest FOMC minutes as well as an update on U.S. inflation. The other major figure of the week is UK GDP, but economic indicators right now are taking a back seat to whatever Donald Trump announces next. We all hope that it is some sort of negotiation with a sensible end, but only time will tell. If it is, then the markets will move back up very very fast.

Enjoy the rest of your weekend and may it bring at least some good news from across the water.

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Disclaimer: The views expressed in this article are the author’s own and should not be considered in rendering any legal, business or financial advice.

Past performance may not be indicative of future results. Therefore, you should not assume that the future performance of any specific investment or investment strategy will be profitable or equal to the corresponding past performance.

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