Tariff Headlines Weigh On Markets… And A Private Credit Port In The Storm? 4/8/25

0:02Live from the Nasdaq market site in the heart of New York City's Times Square. This is Fast Money. Here's what's on tap tonight. The relief rally fails. Stocks ripping at the open as the administration boasts of talks with over 70 countries on potential trade deals. But hawkish comments from the Chicago Fed president, more tough talk on China, a weak auction in the bond market seemingly crush the market's mojo. Is this the new normal investors need to get used to for now? We will debate. Plus, earnings season about to start. Tomorrow we get Delta. Friday, big banks start to report earnings. Will this be a headwind or a hill in for the markets?

0:37Stick around to find out. And then later, inside the energy trade, after a promising start to the year, the sector has slumped big time. So even with a friendly push from the White House, is the oil patch still a no touch? We're going to take a look at the charts on that one. I'm Sarah Eisen in for Melissa Lee tonight, coming to you live from the Nasdaq Studio B on the desk tonight. Tim Seymour, Dan Nathan, Carter Wirth and Julie Beal. We're going to start with another stomach churning day for the markets. The S &P jumping more than 4 % in early trading, but steadily giving back those gains, falling 3 % at its lows, closing solidly in the red.

1:10The index is now down 12 % since President Trump announced the tariffs just last Wednesday, the worst four-day loss since the depths of the financial crisis. The Nasdaq, meanwhile, erasing a more than 4.5 % gain to close over 2 % lower, and then the Dow up over 1 ,400 points at its highs, ended the day down more than 300. Take a look at Apple, down for a fourth straight day, losing more than 20 percent and more than$770 billion in market cap during that time. The broad market reversal coming as we are just hours away from the onset of country-specific tariffs, including the potential of an additional 50 percent tariff on China going all the way up to 104 percent.

1:50Chicago Fed President Austin Goolsbee saying the tariffs announced by President Trump last week were much higher than what the central bank was factoring into its forecasts. But Treasury Secretary Scott Besson defending the president's policy on Squatbox this morning. If we're successful, tariffs would be a melting ice cube in a way because you're taking in the revenues as the manufacturing facilities are built in the U.S. And there should be some level of symmetry between the taxes we begin taking in with the new industry from the payroll taxes as the tariffs decline. And earlier today, U.S. trade rep Jamison Greer testified on Capitol Hill that the policies were starting to get results.

2:34Let's go to Megan Casella for all of the headlines. Megan, what can you tell us? Hey, Sarah. So we heard from Jamison Greer a very strong defense of the tariffs. He told senators an adjustment period would be worth it to bring manufacturing jobs back to the U.S. and to reduce the trade deficit. He said the administration is open to negotiations with other countries and suggested that the U.S. could lower potentially the new tariffs as long as countries had good ideas about how to reduce that deficit. He said there's no particular timeline here. They're working as fast as they can. But given that these issues, he says, have been decades in the making, they are not going to be solved overnight.

3:11And while Greer said the administration will be going country by country to try to strike these deals, there was one country he said is not likely to see a deal, quote, in the near term, and that was China. We're trying to remedy a situation. We're trying to remedy a situation that's persisted for many years. And it would be wonderful if the Chinese agreed with that and wanted to persist and work with us on that. But that's not where they are. And the president has recognized this, and he wants to focus on other partners. Now, those comments came just before the White House confirmed this afternoon that an additional 84 percent tariff will be taking effect against China tonight.

3:48That's on top of the 20 percent fentanyl tariff that took effect earlier this term. I'll note, Sarah, we have not seen the president yet sign paperwork to make the new rate official, especially that extra 50 percent. But the White House says they do expect that will happen at some point today. Sarah. Megan, are the goalposts changing here for those negotiations? At first, they wanted to lower tariffs on American companies overseas, and then non-tariff barriers like VAT taxes or exchange rates that are more fixed. And now they want to wipe out trade deficits with countries, which I think is harder than all of those things, because how do you negotiate out of that if you're a country like Vietnam, which is much poorer than the United States?

4:29Right. When a country simply can't afford to buy nearly as much as we buy from a place like Vietnam, where Nike gets a lot of its materials shipped over, for example, The goalposts have always been a little bit hazy with this administration. They seem to want to do multiple things at once. We even heard the president say earlier this week that he likes the idea of these as a revenue raiser and as a negotiating tactic, which cannot be both. Obviously, they would have to stay in place in order to raise significant revenue. And in that case, you're not negotiating. So we don't know. What we can say now for sure is that Greer was pretty singularly focused on the trade deficit as sort of the overarching goal.

5:03And a lot would have to happen for us to get there. So we'll see what happens next. Yeah. Navarro has been that way, too. But he was trashed on Twitter on X all over with Elon Musk today. Thank you, Megan. Megan Casella. Our next guest just lowered his S &P target for the year end to 5600, down from 6800. Julian Emanuel, senior managing director at Evercore ISI. So this was a game changer for you. Yeah. I mean, look, if you're going to announce what was announced on April the 2nd in the sledgehammer form and you're going to put in numbers that are higher than Smoot-Hawley, the obvious effect is going to be much more market volatility, much more uncertainty, which we've gotten.

5:47And, you know, frankly, the questions I'm getting is why is it that you aren't going to a recession base case economically? And why is it that you're not going to a recession in terms of earnings? And our view is, is that as someone who wants to think about the market, there are two things you need to believe in to believe in higher stock prices this year. First off, that we are approaching the level of peak uncertainty with regard to the trade issues. We do believe that to be the case. Obviously, it's ratcheted even higher in the last several hours. And then the other is that Washington does not wish to precipitate a recession, okay, because there are lots and lots of consequences.

6:31Hold on a second. This is a policy team that seems to think that recession is—sorry, this is an administration that seems to have indicated that recession is a policy potential or that essentially it is policy. Right. I mean, I guess. So my question to you is then back to the markets, because I hear what you're saying. You're being cautious and you always are. And I think you're right to be. But on a day when stocks, bonds and the dollar sold off, you and I have spent a lot of time looking at emerging markets. That's kind of what this feels like. And this is a market that today to me felt like a market that's always a discounting mechanism, felt like it was really discounting significant, I think, loss in revenues in terms of a tax structure and a dynamic that I think are the result of where we are two or three chests moves down the road.

7:18So I guess back to earnings season that's coming upon us. I mean, how do you begin to even calculate this? It's very difficult, Tim. And the fact is, is that results for this earnings season are completely meaningless. You know, there's no there's no importance to them whatsoever. However, what it is is basically CEOs' willingness to, and not even project forward to the current quarter, to lay out a scenario, a number of scenarios, in terms of what to expect for the rest of the year and 2026. And frankly, the message should be that the attempt to make this transformation is something that, you know, economic wreckage is going to make it much more difficult globally to achieve the desired ends.

8:09I mean, Julian, one thing that brings to mind about all this is that something always comes to town. It's tariffs. Or it could be COVID. Or it could be September 11th. It's a convention, and it's a new one, to have a price target in the first place, right? The Dow was what was referred to, not the S &P, until about 1992, as you will know. And then price targets started appearing for individual companies, but not widely disseminated. And then for the market. And now every firm must have a price target. It's arbitrary, 12 months versus 11 versus 13. And you know this, too. Things come along, tariffs, and it makes the whole model, oops, blown up.

8:44Just as you said, earnings could not be more irrelevant this coming quarter. So why not abandon the convention? I mean, why do it? It's a reference number. I think it's a comfort blanket. People like to think, oh, this is where they think or they think the market's going. And here's the other thing that's inconvenient about it. But since this has been tracked, and you know this as well, all strategists put out a price target, and it's always calling for higher. Never once as a group have strategists called for a lower stock market. Not in any year. I think the whole thing is borderline silly. And it has nothing to do with you personally.

9:16I was a strategist on the fundamental side. Now I'm a technician. But I never understood it, and I still don't. And I'm almost 60. Well, I will say this, Carter. Go back and look at a chart of the Dow Jones or the S &P going back to 1982 and think about the last 40-odd-plus years calling for a higher target year in and year out. It makes sense. Markets go up. It's been an extremely winning strategy. Right, but guess what those targets are? They're always 10 % higher, which is the average growth of the market over the last 100 years. So I just don't see the value in it, and it's nothing to do with you personally.

9:48We've known each other a long time. I'm just saying something that has always been a mystery to me, and I'm still trying to figure it out. I thought someone might have an answer. No, but I think it's interesting that your target is higher than we are right now, even though you've turned bearish. So you think we're going to rally? We do. And as I said, it's predicated on the idea that the administration will, in the final analysis, not tolerate a recession. Because if you think about it, the most important piece of legislation that needs to get passed is the budget and the debt ceiling. And frankly, we all know that that's going to require every Republican to row in the same boat.

10:24And there's a lot of Republicans that have never voted to raise the debt ceiling. And I would suggest that it's going to be easier to get that accomplished with an economy that's moving in the right direction than one that is, you know, on the precipice of moving in the wrong direction. It does throw into question a lot of the agenda, I think, if we are moving toward recession and we continue to see market days like this day after day after day. Right. There's no way it can't. OK, thank you, Julian. It's good to have you, Julian Emanuel. Dan, I just think you've got to focus on this intraday volatility right now.

10:57If you're an investor and you're looking for opportunities to kind of figure out where this market bottoms, I think given the uncertainty on policy like you just mentioned, it really makes it hard. It brings you back to maybe COVID in those early days in March of 2020 or go back to kind of the summer of 2008, where we really didn't know what the potential outcomes. I think we have that here, except for the fact that you have an administration who could put somewhat of an end to the guessing game. Right. And so the S &P right now, after a seven percent intraday move, is pricing for the rest of the week about a six percent move in either direction.

11:29That seems cheap right now. The move index that tracks the Treasury market is at all 52 week highs, you know, right now. So we're seeing some major dislocations. Crude oil just broke below. Basically, it's COVID lows other than the one that it got all funky, you know what I mean, with the delivery thing or whatever. There's just a lot of things that are active. I think we should stop and talk about bonds today because something really funky happened in the bond market, which is so what's been happening since the tariffs were announced is people bought bonds. They went into safe haven bonds. They bet on recession and yields went down.

11:59Guess what started happening yesterday? The opposite. And it wasn't a relief rally because today stocks sold off and bond yields did a full round trip from pre-liberation day. And now we worry, do we have to worry about foreigners selling our bonds? Look, it's a great question. And one of the first things I think we should say is that there was on this topic is there was a very disappointing three-year auction. We've got 10s and 30s this week. I think it's both ignorant and arrogant to assume that there can't be some regime change. You know, people want to sit around and say reserve currency is not in question and that the U.S.

12:34is still the place that's going to be the flight to quality. I agree with that. But there's no question that to me that if I'm hedging local currency risk, investing in bonds and investing in even in BTBs in Italy or in gilts in the UK is probably a lot more attractive. It is more attractive than it's ever been. The GDP differentials have come to a place where actually you could see a GDP surplus or essentially a spread over what's going on here. You also get to a place where we talk about this all the time. And I know people kind of poo poo the ratings agencies. But again, I've been investing in emerging markets my whole career.

13:08The things that are going on here is the kind of stuff that gets you downgraded. And if you look at the revenue side of the income statement and based upon dynamics, do we really think tariffs are going to make up for lost revenue that would be coming from tax revenues? And do you really think that this the policy that we're hearing about, whatever you want to call it, is a$740 billion tax? It's a tax tariff. You know, you can you can use that word, too. but that ultimately this is a dynamic where it's going to be. This is not a stimulative policy. There's nothing about it that's going on that's going to stimulate growth.

13:41So I get back to the bond market because I do think this is what you had today. You had a dynamic where not only are we 50 basis points wider on the 30 than we were earlier in the week at a time when you should be seeing a flight to quality here in a growth scare. That's my point. And so I think that's part of what's going on here and part of the volatility we're all talking about. The dollar just today, just in today's trading session, had five intraday moves of plus 50 bips, minus 50 bips, plus 50 bips, minus 50 bips, five times for the dollar today alone. Yeah, but think about what happened today.

14:13It's a great example of how they'd just gotten things ass backwards. They were focused on the 10-year yield. Remember, that's the thing that they were worried about, lowering it. And the stock market, they didn't really care. And look at the weakness in the stock market and the strength in yields. And so that's the sort of thing that makes you lose confidence about what they come out and say. I don't know about you. Scott Besson is not making me feel more comfortable every time he goes in front of a camera. I think this morning he was making people feel more comfortable because he's the one who's talking about negotiations with trading partners.

14:41I mean, when he posted on X that he's in charge of negotiations with Japan, that helped. But the market's not buying it. I mean, like, let's be let's be frank. You know, like we kind of, you know, have had some strength. Well, I think the question is, is there damage done? Julie, I want to bring you in. What what are you doing with all of this? Yeah, I mean, I think all of us at Kane are sitting very still. Well, most of our portfolios are outperforming on a relative basis because we've seen this flight to quality and we tend to benefit on a relative point. I think the biggest challenge that I really see is you have this really clear mismatch in duration in terms of the Trump administration's objectives.

15:15And that is that with the strike of a pen, we've changed tariffs, right? We haven't done the normal, traditional going through the structure, going through Congress to create a structural change. But we're hoping to create a structural change in the economy in that we want manufacturing to come back. And those don't work together, right? You cannot have this stroke of the pen change right now with the hopes that there will be structural investment on the long term. Because there's just no real incentive if you're a U.S. economy, if you're a capital allocator right now, there is no real incentive to be sticking your neck out and investing, be it in people, be it in capital goods.

15:54there's no incentive. You just don't have enough clarity. And so we can be enthusiastic about raising revenue in the near term and creating deals kind of in the short term, but you continue to have these mismatches and timing and goals. And I think that's actually the biggest problem, right, is that every time the Trump administration speaks, the goals seem to change. And so we don't have clarity on timelines and we don't have clarity on objectives. And without those, it's really hard not to feel completely paralyzed. Dan, wouldn't you feel better, though, listening to Treasury Secretary Besson over Peter Navarro?

16:29That was the alternative. But even Lutnik sounds like a fool when he comes out there, because they're talking in ways that we know as market participants are not the truth. You know, these sycophants, they're going down there and they're talking about somebody, you know, they're talking about a policy of somebody that none of us believe has a good handle on it. That would be the president of the United States. And, you know, think about all these other market participants who come out, all these other billionaire hedge fund guys, they're basically looking at them and they're telling them, we don't believe you, you know what I mean, about this policy.

16:56We know better. And that's the thing. I just think. I think they just don't like the execution of how it was done. They don't believe. Oh, come on, Sarah. They don't believe that the reshoring is going to happen anytime soon. And to Tim's point, it's going to offset some of the weakness that we're having. But I think it's a fair goal to go after countries that have limited access. And why should we be the second freest market in terms of trading? We can fight back on that. The question is just how you do that. I think everybody wants an environment where the U.S. is able to exert the leverage that it deserves and not be, you know, certainly not to be punished in certain markets.

17:30But the idea of having a balanced trade budget with every country in the world, to me, is one of the most ludicrous things I've ever heard. But that's part of the conversation. That's part of the inconsistency. So if this is really about going back and extracting back the leverage that we deserve and should have as a trading partner, as the most important trading partner to every country in the world, I mean, that's a great goal. And to do things that are going to help American households get jobs in industries that are actually the ones that will pay them more money, bring that business back to the United States.

18:02But most importantly, this really started about taking care of strategic industries and protecting our interests in the industries where we really can't mess around. And I think those are great goals, and I think those are goals of this administration. So I think the problem is that we're getting mixed messages. I think as it relates to China, and we're going to have a great conversation on China, so maybe I should shut up. Let's dive into China because our next guest thinks China's options are limited short of taking drastic actions against the United States. Shahzad Qazi is the China Beige Book COO and managing director.

18:32So we are set to get these higher tariffs. Now 104 percent increase on China altogether. What is China going to do about it? Well, you know, they can do things like double down on tariffs. They can announce more investigations. They can go after more companies. They can tell their citizens, do not go and buy from Chinese, from American companies, boycott them. They've done that before to companies belonging to the Japanese and so forth. So they have those toolkits. But beyond that, I don't see them taking some of the biggest, most drastic actions that would be considered, I think, acts of war, like weaponizing the Treasury holdings or trying to interfere with our critical supplies.

19:11So$760 billion is what China holds now in U.S. Treasuries. It's come down a lot, but it's still the number two foreign holder of our debt. You don't see that as a weapon? I don't think that they're going to try to use that right now. I think that would be a very, very serious escalation. We need to keep in mind that ultimately what Xi wants here is a deal. And they've been hoping actually to get the quote unquote right messages across to the administration since really the beginning. They would like for all this to go away as soon as possible. We're on a day when the offshore yuan hit an all time low against the dollar.

19:47So we're talking about a country that's export driven. We're talking about something that really is as catastrophic as you can get. And I guess I want to be clear here. While I'm frustrated by some of the policy, I'm all for pushing here. And I think we have all the cards to play here. I really do. I mean, I think that the things I worry more about are not necessarily what China can do back to us. But I worry more about how China is going to react in the region. And frankly, China spent a lot of time in the last year really disregarding a lot of protocols that I think are very important ones. Can you talk about that?

20:23I mean, should we be more concerned about Taiwan here? And some of the things that I think, frankly, have us more worried than what happens to the Chinese economy. Yeah, look, I mean, they're you know, they've gotten very, very aggressive in terms of their military drills. There's this idea that, you know, could you ultimately conceal a real invasion of Taiwan under one of these drills? They've gotten very aggressive vis-a-vis the Philippines. So certainly that risk is there. And, you know, that also creates a problem of accidental war between the U.S. and China. Again, I would put Taiwan right now in the bucket of things that they do not want to get to.

20:55An invasion of Taiwan, I don't think, is very high on the priority list for 2025. That calculus will most likely change, I think, as we get towards the end of the decade. Can you just tell us how U.S. consumers are going to be affected by these tariffs? Because we still manufacture a lot of apparel and footwear and accessories and baby strollers and toys and electronics in China. You know, last time around, when the first tranche of Trump tariffs went into effect in the first administration, You know, the general rule of thumb that was, you know, one third is eaten by the Chinese suppliers, one third is eaten by the American importers, and then one third, of course, the consumers have to eat.

21:30That's how it was discussed. We'll see to what extent that plays out again, because obviously there is no one-to-one relationship between the tariff hikes and what the increase in consumer prices is going to be. But I think we can reasonably assume that there are going to be increases, at least in certain areas. And how hard is China going to get hit? Well, China, they are concerned about the fact that that would bring down demand, that that would actually be worse for their economy at a time when they're hoping that property stabilizes, when they know that there's no realistic hope for a consumer-driven boom there whatsoever.

22:01Manufacturing and their industrial base is very, very critical to them. So that's why I said if they could wish it all away, they would today. All right. We'll be watching that fix, that yuan fix tonight. Thank you very much, Shahzad Qazi. I appreciate it from China Beige Book. Coming up, we are digging into Delta ahead of earnings tomorrow, how the airplane will fare after a nearly 40 percent drop already this year in the stock and what it could tell us about the current state of the consumer. That's coming up next. And then later this week, it is the bank's turn, how traders should be bracing for those results and the names that could weather the storm.

22:32Don't go anywhere. Just getting started. Fast Money back in two. Thank you.

23:05taking all this in. Yeah, and we've talked about this in Company Guided, I want to say, in late January, early February, and then they kind of came out with that pre-announcement. I think we were all a bit shocked in the speed in which they were changing their outlook. You know, we talk about earnings season all the time, and we talk about the mood of the market, the mood of investors as you head into it. And sometimes if it's a really bearish mood and, you know, you don't have that high of a hurdle to get over to have your stock or the sector sort of rally. And so this one's going to be really interesting because the visibility that a lot of companies have is kind of kaput, right?