In this podcast, Motley Fool analyst Asit Sharma and host Mary Long discuss:
- Companies that could be celebrating on April 2.
- What’s to blame for the recent market “freakout”
- 23andMe‘s bankruptcy filing.
Then, Motley Fool contributor Travis Hoium joins host Ricky Mulvey for a look at MGM Resorts and the company’s bet on online sportsbooks.
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A full transcript is below.
Mary Long: The tariff situation changes, again, maybe. You’re listening to Motley Fool Monday. I’m Mary Long joined on this Monday morning with Mr. Asit Sharma. Asit, thanks for being here. Good to see you.
Asit Sharma: Mary, thank you for allowing me to come back.
Mary Long: Of course, we’ll have you come back many more times in the future. What did you do last time that I’m unaware of?
Asit Sharma: Let’s not rehash old history. Let’s proceed.
Mary Long: Let’s move on to the future. Another day we got another tariff-related development to kick off the week. We’re now a little bit more than a week out from what’s been dubbed Liberation Day, AKA April 2nd. That’s when the US intends to impose reciprocal tariffs on a set group of countries. The idea of imposing these tariffs at all, plus this continued back and forth with Canada and Mexico in particular has set markets into a tailspin of uncertainty these past few weeks. The market’s general trajectory has been downward since these tariffs were first announced. We got some news that I want to hit about the potential narrowing of these tariffs ahead of April 2nd, AKA Liberation Day. But before we get to that, Liberation Day has quite the ring to it. Are there any companies that are going to be celebrating this April 2nd when it hits?
Asit Sharma: Mary, maybe the steel producers. I thought I saw this morning that UBS had upgraded steel producers, and I get that because these are companies that have been up against much lower cost competition in raw commodities. Steel is something that’s subsidized by a lot of economies, so maybe this helps that industry. But look, that has some follow on effects on things like roofing companies because that means their stuff is getting more expensive. Alternatives to steel, like aluminum are getting more expensive. There’s a small group that’s really going to be celebrating tariff Liberation Day. It’s not a huge list that we can look to.
Mary Long: For everybody else, it seems that the only certain thing is that uncertainty is sure to continue. There is this glimmer of hope that perhaps these fast approaching April 2nd tariffs won’t be as wide ranging as they were once assumed to be. News came out last night that the White House supposedly plans to narrow the scope of these tariffs. This most recent iteration of the current plan is allegedly that tariffs will target 15% of nations that run persistent trade imbalances with the US. This cohort is being dubbed the dirty 15 by Treasury Secretary Scott Bessent. Sectoral tariffs are also now likely to be delayed post this April 2nd date. We’ve got this news, but again, there still seem to be a lot of details that need to be hammered out. We don’t really know what the timeline of these changes will be or exactly what the scope, narrow or wide of these changes are going to be when they do roll out. With all that said, all that unknown Asit, what is an individual investor supposed to do with this situation?
Asit Sharma: Mary, I think maybe the best strategy is recognizing that tariffs and uncertainty that stems from tariffs are going to be a feature of the investing landscape. If you told me a few years ago that there was this great technology, it’s called transformer technology, and it’s this extension of, like, machine learning, and it’s going to be a feature of the investing landscape. I probably would have embraced that and said, let’s roll with it. Let’s see if we can make some money from generative AI. Our brains aren’t as well equipped to handle features that have negative implications that could mean that potentially the stock returns won’t be as great or that there will be some winners we have to find and some losers that we have to avoid.
But acceptance is a really great tool when you hit these periods where the change is in how the outcomes might fall out and not always for the best. For me, this is a way to cope. It does mean, though, that you have to get a little bit more knowledgeable than you were before about different industries and the potential. I mean, potential is such a big word here, isn’t it? Because the story changes from one day to the next. But the potential effects and that’s some work, but look, everyone now understands what a large language model is. Everyone knows what ChatGPT is. We can learn. It’s just we don’t like to learn as much about stuff that’s frightful or tough or uncertain.
