Trump Promised a Markets Boom. 100 Days In, Stocks Have Only Seen Damage

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“It was whiplash after whiplash after whiplash,” said Dave Lutz, macro strategist at JonesTrading and a 30-year Wall Street veteran.

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And Wall Street is bracing for more. Speculators just widened their net-short position on S&P 500 futures to the highest since December, according to the latest CFTC data released on Friday.

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The declines in equities since Trump’s inauguration on Jan. 20 have been led by the consumer discretionary and information technology sectors, with footwear company Deckers Outdoor Corp., semiconductor equipment manufacturer Teradyne Inc. and specialty chemicals producer Albemarle Corp. among the biggest losers. Other companies with struggling share prices include Elon Musk’s electric-vehicle maker Tesla Inc., United Airlines Holdings Inc., Delta Air Lines Inc., and Norwegian Cruise Line Holdings Ltd. 

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Consumer goods makers and the chip industry are grappling with the risk of higher costs from new tariffs, while travel companies are expected to feel the pinch as consumers tighten their purse strings if the economy starts struggling. 

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“There is irreparable damage done,” Malek said. “Trend and momentum are extremely important in the stock market and they really reflect investor sentiment. Unfortunately these things are very hard to turn back around when they go down so fast.” 

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Equity positioning remains near the bottom of its historical range, according to data from Deutsche Bank AG, whose strategists last week threw in the towel on predictions for a large advance in the S&P 500 this year. 

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Meanwhile, Bank of America Corp. strategists warned on Friday that the conditions for a sustained stock market rebound are missing and encouraged investors to sell into the most recent rebound in US equities and the dollar. Foreign investors already got the memo and have been dumping American shares since the start of March, according to Goldman Sachs. 

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Cloud Of Uncertainty

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There’s one word money managers use to sum up Trump’s trade plans and their impact on the stock market: uncertainty.

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“We still don’t know what it is that we are trying to achieve with Vietnam, or Canada, or Europe, and we have no idea what success looks like,” said Paul Nolte, market strategist and senior wealth manager at Murphy & Sylvest Wealth Management. 

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This lack of clarity has prompted investors to turn defensive, wary of headfakes and preferring to wait on the sidelines until there are more concrete policy details. But that’s not the only risk.

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“We need to get past this cloud of trade policy uncertainty as it’s holding back businesses from capital expenditures and hiring plans and may also dampen consumer spending,” said Eric Sterner, chief investment officer at Apollon Wealth.    

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A tariff-induced slowdown in economic activity, and the higher costs associated with it, will crimp earnings growth, according to David Lefkowitz, head of US equities at UBS’s global wealth management arm. He expects profits for S&P 500 companies to be flat this year.