Listen to the full episode, here.
Key Points
- The market volatility and uncertainty are being driven primarily by the president’s unpredictable trade policies and comments, rather than fundamental economic factors. [04:35]
- John and Sam are concerned that the president’s actions could have a detrimental impact on consumer and business confidence, which could in turn hurt corporate earnings and economic growth. [08:38]
- They advise investors to stick to their long-term investment plans and not get caught up in the short-term market swings, as the long-term outlook remains positive despite the current uncertainty. [14:20]
- John and Sam highlight the importance of focusing on the underlying fundamentals of the economy and corporate earnings, rather than getting distracted by the political noise. [08:38]
John Norris (00:30):
Well, hello again, everybody. This is John Norris at Trading Perspectives. As always, I’m joined by our good friend, Sam Clement. Sam, hello.
Sam Clement (00:36):
Hey John, how are you doing?
John Norris (00:37):
I’m doing fantastically. And it seems like the market’s doing a little better too.
Sam Clement (00:40):
Yeah, it’s been a bit of a reprieve—a sigh of relief. I think there are a lot of ways you could describe it.
John Norris (00:45):
There definitely has been a bit of a breather these past few days. But from where I sit, there are still a lot of unanswered questions—and a lot of potential for volatility. I worry people might be getting lulled to sleep by a few days of green ink. Because when you ask, “What’s actually changed?”—well, not much.
Sam Clement (01:16):
Exactly. Especially when we’re not even clear on what was implemented in the first place. It’s hard to say what’s changed when we never had clarity to begin with. That’s the nature of markets—they’re always pricing in unknowns. We saw that first sharp move down after tariffs came in way stronger than anyone expected. It got ugly fast—one of the quickest drawdowns in history.
John Norris (01:44):
It really did.
Sam Clement (01:46):
Then came the back-and-forth: maybe we’re easing off the tariffs, maybe we’re discussing trade deals, maybe those take years. So many maybes. It all seems to hinge on who has the microphone that day. Step back, and not much has actually changed. But for a lot of people, it feels like we’re through it. That we’re moving on. But we talked about this yesterday—nothing fundamental has shifted.
John Norris (02:33):
It’s frustrating—for me, and I imagine for a lot of people who do what we do. When things seem to settle a bit, people start asking, “Is now a good time to buy?” And the honest answer—maybe the unpopular one—is: every day is a good time to buy if your time horizon is 10, 15, 20 years.
John Norris (02:58):
If you’re treating investing like a marathon—not a sprint—then go ahead and buy. Don’t look at your portfolio for 10 years. You’ll have more money by then, and that’ll be that. But that’s not sexy. That doesn’t sell. People want to know: is this the best moment to squeeze out a few extra percentage points?
Sam Clement (03:30):
Right.
John Norris (03:32):
Honestly, I’m not sure. I’ve been doing this a long time—you can see the white hair. Been in this business 34 years, and I’ve never seen an American president toss around economic policy like this. If I’ve never seen it before, how do I react? There’s no historical precedent to base decisions on.
Sam Clement (03:48):
And that’s why you fall back on the original plan. If you built a plan with unknowns in mind, you stick to it—because nothing has changed.
John Norris (04:00):
Exactly.
Sam Clement (04:01):
The securities are priced differently, sure. But the uncertainties are still here. It’s not flashy advice, but you’ve got to ask: what was your plan before Liberation Day—or Obliteration Day, or whatever we’re calling it?
John Norris (04:21):
What were your expectations before all of this? What was your risk tolerance? People want to jump in and out of the market every time a tweet goes out. But the truth is, if you can’t sleep at night, you’re probably taking on too much risk.
What concerns me now is that while the markets are up this week, I feel just as nervous as I did right after Liberation Day. Why? Because nothing has changed. On Monday, the president takes a swipe at Jay Powell—the market drops a thousand points.
Sam Clement (05:25):
Calls him a big loser!
John Norris (05:26):
Yeah—calls him a big loser, market drops a thousand. Then the next day he walks it back.
Sam Clement (05:36):
Says he never planned to fire him.
John Norris (05:39):
Market bounces back a thousand points. Then maybe there’s a deal with China. Maybe there’s not. It’s all so vague. It feels like economic policy is being made on social media. And that’s no way to run a railroad—let alone manage investments.
Sam Clement (06:16):
Right, and that’s always been my issue with technicals in markets. They’re useful as backward-looking tools, and I think there is psychological value to them, sure—but they tend to break down when there’s this much human decision-making driving the market.
John Norris (06:25):
Exactly.
Sam Clement (06:26):
Take now, for instance. Let’s say we hit a technical low—that should be a buy signal. But then a tweet or a post sends markets down 2,000 points the next day. It throws all the usual psychology out the window when a single person can move markets this much.
John Norris (07:04):
That’s the thing—technical analysis assumes rationality. It assumes past performance can tell us something about the future. But when we’re dealing with tweets and trade wars, none of those assumptions hold. It’s hard to lean on historical resistance and support levels when irrationality rules the day.
Sam Clement (07:46):
And you’ve said it before—politicians get too much credit for the good and too much blame for the bad. But right now, it really feels like a lot of this is being driven by just one person’s decisions.
John Norris (08:02):
Exactly. And we’re heading into earnings season. But instead of focusing on fundamentals—on profits—we’re still reacting to tweets. Today, for example, major airlines aren’t even giving forward guidance.
Sam Clement (08:09):
Right, and that’s what I was going to say—we’re still in the early innings of earnings season. And what we’re seeing so far? Guidance is being pulled, widened, or weakened. Sure, a few companies have issued stronger guidance, but most are saying they just don’t know what the next three, six, or nine months are going to look like.
John Norris (08:50):
And that’s key—because the market hasn’t even fully turned its focus to earnings yet. Maybe on an individual stock level, but overall, it’s still preoccupied with headlines.
Sam Clement (09:01):
Exactly. And if anyone thinks this kind of uncertainty doesn’t hurt consumer or business confidence, I’d like a sip of whatever they’re drinking.
John Norris (09:18):
There’s no way this doesn’t have a chilling effect on long-term decision-making.
Sam Clement (09:24):
And even short-term, too. We’ve already seen trucking companies shut down. Rates have plummeted—below COVID levels in some cases. So there’s already real impact in the economy. GDP has taken a hit. Net exports have been a big factor, but that’s not the only concern.
John Norris (10:00):
Right. And we’ve still got a lot on the horizon that’s concerning. Student loans are coming due again. That’ll affect consumer spending. Earnings are softer. Things aren’t getting better—and tariffs being thrown around only make things worse.
Sam Clement (10:25):
Right. But somehow tariffs and all these other economic risks are being treated like separate issues. As if we can deal with one and then the other. But they’re all intertwined. Tariffs will absolutely impact everything else.
John Norris (10:39):
Exactly. And if you look at consumer sentiment—University of Michigan’s numbers, for instance—it’s dropped significantly. People are buying now to get ahead of rising prices. That kind of front-loading can make April’s data look okay, but May and June? Those could look really rough.
Sam Clement (11:40):
And you’ve got to remember, container ships from China take close to a month to reach some U.S. ports—sometimes longer. So what happens to all the goods being ordered now, if they’re still in transit when new tariffs go into effect?
John Norris (11:52):
Exactly. That’s a real issue. It creates uncertainty for businesses placing orders today. Are they going to face higher costs by the time shipments arrive? That’s why I can’t tell anyone with confidence that this volatility is over.
Sam Clement (12:01):
It might feel better this week, but it’s still hard to say it’s safe to just jump back into the market.
John Norris (12:07):
That’s right. In five years, you won’t be upset if you bought now—or if you waited a few more weeks. But if you’re thinking short-term—like over the next three months—there’s just no clear answer. I wish I had a stronger outlook to offer.
Sam Clement (12:46):
Volatility messes with people’s psychology. It’s tough not to feel better when the market goes up, and hard not to panic when it goes down.
John Norris (13:10):
Right. We’re seeing swings that resemble emerging markets—up 10%, down 20%—stuff you’d expect from Latin America or Southeast Asia, not the U.S. economy.
Sam Clement (13:43):
Exactly. It’s not just the stock market either. The dollar weakening, bond yields rising—those are emerging market moves. We’re seeing all of them at once.
John Norris (13:51):
And that’s what’s so unsettling. Rising gold prices, falling bond prices, a weaker dollar—it all points to continued uncertainty. That’s not the kind of environment where I can say, “Now’s the time to dive in.”
Sam Clement (14:10):
But longer-term? The story’s different.
John Norris (14:12):
Always. Long-term investing is about discipline. There’s never a “perfect” day to buy. There will always be lower days and higher days. That’s why you build a plan and stick to it.
Sam Clement (14:51):
Exactly. You build a plan for the unknowns. A 10% correction happens every other year. A 20% drawdown? Every few years. These are normal parts of investing.
John Norris (15:28):
Couldn’t agree more. So what’s ahead for the rest of the year? Still lots of unknowns. We didn’t expect a full-blown trade spat with China when the year started. But we did expect the first half of the year to be slower than the last half of 2024.
Sam Clement (16:14):
Wait—did you say 2004?
John Norris (16:15):
Ha! I did. I meant 2024. But you’re right—2004 was strong too.
Sam Clement (16:19):
Just keeping you honest!
John Norris (16:20):
Fair enough. But seriously, 2024 surprised all of us with its strength. So expecting a slower first half in 2025 made sense. I still think the Fed may cut rates a bit more aggressively than markets expect. And we could enter 2026 in a stronger position.
Sam Clement (16:48):
So this isn’t doom and gloom.
John Norris (16:50):
No, not at all.
Sam Clement (16:53):
It might sound like it, but it’s not. As long as we return to a more normal policy environment, the outlook could brighten.
John Norris (17:07):
Exactly. If we can move past tariff talk and global economic standoffs, we can get back to focusing on fundamentals.
Sam Clement (17:19):
That’s what the market wants—less noise, more clarity. Headwinds, tailwinds, probabilities—those are what investors can plan around.
John Norris (17:30):
And I do hope that whatever’s being envisioned for tariffs is resolved soon. If we can clear that up, there’s potential for strong market performance this year.
Sam Clement (17:50):
But let’s be honest—it’s not going to bring back manufacturing jobs.
John Norris (17:54):
Exactly. The market rallied post-election on hopes of tax cuts and deregulation—not tariffs.
Sam Clement (18:01):
Right. It was about lower corporate taxes, fewer regulations—things that boost earnings.
John Norris (18:09):
Which is why investors got excited. A dollar in earnings can create $20 in wealth when multiples apply. But now? No new tax cuts, no meaningful deregulation—and we’re looking at expensive tariffs instead.
Sam Clement (18:56):
And investors are understandably cautious.
John Norris (19:01):
All we can hope for now is to get past the drama and get back to policy that supports long-term growth.
Sam Clement (19:19):
Right. Let’s talk about how we help the consumer—especially the middle and lower class. Tax incentives, benefits that strengthen household budgets—those are the kinds of things that could really move the market.
John Norris (19:41):
Exactly. And with that, thanks everyone for listening. We always love to hear from you—drop us a line at or leave us a review on your podcast platform of choice.
If you want to read more of our thoughts, visit oakworth.com and check out our Thought Leadership section. There you’ll find links to previous podcast episodes, our blog Common Cents, and our quarterly publication Macro and Market. The Q1 2025 edition is out now.
Thanks again for joining us.
Sam Clement:
Thanks, everyone.
John Norris:
Take care.