Core Viewpoint - The article discusses the significant increase in trade policy uncertainty in the U.S. under the Trump administration, highlighting the potential economic repercussions and the political maneuvers that have led to this situation [1][2]. Group 1: Trade Policy Uncertainty - The U.S. "Trade Policy Uncertainty Index" surged to 5735 in March, which is 29 times higher than the level before the presidential election in October 2024, and three times higher than the previous record in August 2019 [1]. - The uncertainty is attributed to Trump's fluctuating tariff policies, which are creating a highly opaque economic outlook [1]. Group 2: Political Maneuvering - Trump has invoked the International Emergency Economic Powers Act (IEEPA) to declare a state of emergency regarding tariffs, allowing him to bypass Congress and manipulate tariff rates and targets freely [2]. - The number of presidential orders issued by Trump has exceeded 100 within three months, significantly higher than the 29 orders issued during his first term [2]. Group 3: Market Reactions - The Dow Jones Industrial Average dropped by 13% in April compared to the end of 2024, while the STOXX600 index fell by 7% after an initial rise of 11% [2]. - The VIX, known as the "fear index," surpassed 50 on April 8, marking the highest level since the 2008 financial crisis, excluding the COVID-19 pandemic period [2]. Group 4: Economic Impact - Following the initiation of reciprocal tariffs on April 9, there was a simultaneous sell-off in stocks, the dollar, and U.S. Treasury bonds, indicating a broader market panic [3]. - The yield premium demanded by investors for U.S. Treasury bonds reached its highest level since September 2014, suggesting a loss of confidence in U.S. bonds as a safe asset [3]. Group 5: Public Sentiment and Global Implications - Trump's average approval rating was 46.5% as of April 18, which, despite a decline from over 50%, remains relatively high [4]. - A survey indicated that 75% of researchers are considering leaving the U.S. due to the current administration, while the EU is exploring trade agreements to maintain a free trade system without the U.S. [4].

Core Viewpoint - The article discusses the potential for a market rebound due to a combination of loose monetary policy and a resolution to tariff issues, creating a favorable environment for stocks, similar to the situation in 2018 [3][5]. Group 1: Market Reactions and Historical Context - Tom Lee from Fundstrat Global Advisors suggests that the current market reaction to tariffs may mirror that of 2018, despite significant differences in the economic landscape [3][4]. - In 2018, the S&P 500 index fell 12% within 10 days after Trump's tariff announcements, followed by a 9% drop after actual tariff announcements, and a subsequent 20% decline due to interest rate hike signals from the Fed [5]. - Lee notes that after these declines, the S&P 500 surged over 30% in 2019, indicating potential for recovery after current market volatility [5]. Group 2: Current Market Conditions - The Federal Reserve is currently considering further interest rate cuts rather than hikes, which contrasts with the 2018 scenario [5]. - The S&P 500 has rebounded above its 50-day moving average, suggesting a more favorable technical outlook for the market [5]. - The VIX index is expected to rise around the April 2 tariff deadline but is anticipated to decline afterward, indicating market resilience [5]. Group 3: Economic Sentiment and CEO Confidence - Lee expresses surprise at the rapid deterioration of market sentiment, particularly among CEOs, but believes that if economic disruptions are not prolonged, they may be temporary [6]. - The S&P 500's 10% drop reflects a 40% probability of recession, but Lee argues that the market does not fully align with this pessimism, as other global markets have outperformed the U.S. since February 18 [6]. - The article suggests that a significant rebound in the stock market post-April 2 could restore CEO confidence and mitigate negative impacts on economic growth [6]. Group 4: Investment Outlook - Lee counters concerns about foreign investors' hesitance towards U.S. investments, stating that investors seeking quality companies will still favor U.S. markets [6]. - A mutually acceptable trade agreement could alleviate trade tensions and enhance the attractiveness of the U.S. market for investors [6].