Friday, 10 Oct 2025
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA
logo logo
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
  • 🔥
  • Trump
  • VIDEO
  • House
  • White
  • ScienceAlert
  • Trumps
  • Watch
  • man
  • Health
  • Season
Font ResizerAa
American FocusAmerican Focus
Search
  • World
  • Politics
  • Crime
  • Economy
  • Tech & Science
  • Sports
  • Entertainment
  • More
    • Education
    • Celebrities
    • Culture and Arts
    • Environment
    • Health and Wellness
    • Lifestyle
Follow US
© 2024 americanfocus.online – All Rights Reserved.
American Focus > Blog > Economy > The flaky case for buying the dip
Economy

The flaky case for buying the dip

Last updated: April 18, 2025 6:45 pm
Share
The flaky case for buying the dip
SHARE

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Either the mighty US mom-and-pop investor base knows something we don’t, or it’s heading for a bruising.

Right now, the amateurs are sitting pretty. Domestic retail investors were, by all accounts, conspicuously active buyers of US stocks in the initial firestorm kicked off by Donald Trump’s so-called “reciprocal” tariffs announcement at the start of this month.

As stocks indices plunged, purchases from this group were, as Vanda Research puts it, “historic”. Fair play to them. It was a brave call, but from the very lowest point on April 7, the US S&P 500 is still up by 9 per cent.

In recent years, retail punters have been an important market segment for professional investors to watch. They were swift to buy the (much larger) dip after the Covid shock five years ago, jumping in when many institutional investors were still too nervous, and they were absolutely right. It is worth thinking about what drives them.

Logic dictates that one reason is a large number of have-a-go investors in the US voted for Trump, and quite possibly believe his argument that massive import taxes are poised to rekindle jobs in the country’s manufacturing sector.

However, muscle memory is a powerful thing. The past 65 years tell us that US stocks reliably go up, in roughly twice as many years as they go down. Positive runs are much more powerful and longer lasting than bad patches.

Even for more heavy-hitting institutional investors, the rationale for buying now, when US stocks are down by some 10 per cent so far this year, is incredibly strong, if we are playing by the usual market rule of zigging when the world zags. (Note the “if”.)

See also  Parent gives class full of kids alcoholic Jell-O shots — the second such case in one month

The mood among fund managers is absolutely dire. Bank of America’s regular monthly survey of institutional investors, released this week, is pretty apocalyptic — the fifth most miserable reading in its quarter-century history. Growth expectations are at 30-year lows, with almost half now expecting a hard landing in the US. A record number of respondents intend to cut exposure to US stocks.

When institutional investors turn that miserable that fast, your inner contrarian would normally tell you to be brave like US retail investors and jump in.

Some of the woe-is-me wailing at the sky from professional fund managers may also be a little performative. “Today we’re hearing a lot that we’ll never go back,” said Michael Kelly, head of multi-asset at PineBridge Investments. “But I know finance people, and they’ll do whatever makes sense in future. Wall Street people will go where the cheese is.”

A hint of the notion that the pain has gone too far is also evident in US government bond markets, typically the territory of the professionals. Treasuries are, in many maturities, strikingly weak, despite the three to four interest rate cuts investors now anticipate for the rest of this year that would normally waft bond prices higher.

Mike Riddell, a bond fund manager at Fidelity International, said he had been running smaller allocations to Treasuries than normal, but “we have been scaling into it now”, he said, adding that he’s “getting to the point” where they are cheap enough to pique his interest.

So, pack in your caveats as you see fit. On paper, in theory, on average, based on historical precedent and if the usual rules apply, the present moment is a once-in-a-generation opportunity to snaffle up US assets on the cheap.

See also  Donald Trump defends national security adviser over chat breach

And yet the rush to do that is just not there. The consensus among the pros is that the tariffs policy itself is a mess. One moment, commerce secretary Howard Lutnick is on US television telling the world about the administration’s grand vision of “millions” of Americans fixing tiny screws into iPhones as part of a new golden age for American craftsmanship, and a week later, his boss decides to exempt smartphones from some of the tariffs altogether. In any case, it takes years to bring sophisticated manufacturing back home, and the next US president could scrap the import taxes entirely. In that environment, few sane US company executives would crank up domestic manufacturing as Trump hopes.

Meanwhile, the president is busily launching blunt broadsides against Federal Reserve chair Jay Powell and, the icing on the cake — the US’s crucial tech sector took a massive hit this week after chips giant Nvidia said it would take a multibillion-dollar earnings hit from new export restrictions to China. The Philadelphia semiconductor index is down by 22 per cent this year.

Uncertainty in markets is nothing new. It is the whole point. It is why certain assets pay out returns to those brave enough to buy them. But it has a whole new flavor now. An orange flavor.

Record-breaking gold prices, a soaring Swiss franc and a massive jump in German government bonds are all a clear sign that professional investors are deeply spooked, and anticipating the next wave of pain. If the retail dip buyers are right again, this will have been a heroic call on their part, but the odds are heavily stacked against them. My hunch is that the beatings will continue until morale improves.

See also  Why CrowdStrike Stock Was Climbing Today

katie.martin@ft.com

TAGGED:Buyingcasedipflaky
Share This Article
Twitter Email Copy Link Print
Previous Article New colour seen for the first time by tricking the eyes New colour seen for the first time by tricking the eyes
Next Article Sick pranksters SWAT the house of slain teen Austin Metcalf with bogus shooting report Sick pranksters SWAT the house of slain teen Austin Metcalf with bogus shooting report
Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Popular Posts

Meghan Markle Uses This $10 Cream Shoppers Say ‘Works Magic’

Discover Meghan Markle’s Affordable Skincare Secret for Flawless Skin Us Weekly has affiliate partnerships. We…

April 21, 2025

End of the line for cod?

Experts Warn of Declining Fish Stocks: Urgent Call for 'Zero Catch' Quotas on Cod Conservationists…

September 28, 2025

President Trump, First Lady Met with Standing Ovation at Kennedy Center – The White House

Articles The White House June 12, 2025 In a dazzling display of cultural patronage, President…

June 12, 2025

Double serving of evidence underscores power of plant-based diet for heart health

The plant-based Portfolio Diet has been making headlines recently, with two new studies showing its…

June 2, 2025

Fighter jets scrambled after civilian aircraft violates Trump airspace at New Jersey Bedminster

Fighter Jets Scrambled to Intercept Civilian Aircraft in Restricted Airspace Fighter jets were scrambled to…

August 4, 2025

You Might Also Like

Nvidia’s Jensen Huang Says AI Demand Is Up ‘Substantially’ This Year, and Still Growing
Economy

Nvidia’s Jensen Huang Says AI Demand Is Up ‘Substantially’ This Year, and Still Growing

October 10, 2025
Gold, Silver, and U.S. Stocks Are All at Record Highs. What Gives?
Economy

Gold, Silver, and U.S. Stocks Are All at Record Highs. What Gives?

October 10, 2025
Meme stock resurgence prompts return of central meme investment fund
Economy

Meme stock resurgence prompts return of central meme investment fund

October 10, 2025
Sugar Prices Retreat on a Forecast for a Global Sugar Surplus
Economy

Sugar Prices Retreat on a Forecast for a Global Sugar Surplus

October 10, 2025
logo logo
Facebook Twitter Youtube

About US


Explore global affairs, political insights, and linguistic origins. Stay informed with our comprehensive coverage of world news, politics, and Lifestyle.

Top Categories
  • Crime
  • Environment
  • Sports
  • Tech and Science
Usefull Links
  • Contact
  • Privacy Policy
  • Terms & Conditions
  • DMCA

© 2024 americanfocus.online –  All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?