Markets Happy Hour Podcast April 3 - LIVE from Dallas - The Morning After

What a day we chose to hold our once rescheduled Markets Happy Hour Podcast in Dallas. We were hosted in the glorious surroundings of Old Parkland in the Executive Board Room and enjoyed a dialogue with a broad audience of family office investors, real estate, oil and gas and private credit experts.

We naturally talked about tariffs - a lot, and showed slides that show that the recent tariffs will lead to the highest effective rate of US tariffs in decades. Throughout today it is clear that this is being met with severe market strain and some incredulity at their breadth and depth.

Some commentary has focused on the means of calculation of what is in fact reciprocal - and it has been argued that the actual tariffs in effect abroad do not reflect those contained in the now infamous tariff chart used in the Rose Garden. Some of the rates include VAT which is imposed on all goods in Europe, while all reflect a calculation based on a goods deficit only, while in some cases there is a services surplus with these global trading partners.

Markets have reacted violently and will continue to do so. It is interesting that the Russell 2000 has sold off more than the mainstream large cap indices - these indices should in theory be a little more protected than the larger multi-nationals, but what we are witnessing is a broader risk sell-off. Most affected are tech companies, shoe companies, manufacturers of furniture (highly reliant on imports) as well as other "risk on" assets such as cryptoassets.

All global markets have been affected too - there is clearly a contagion effect, but a falling dollar has cushioned the blow somewhat.

US 10 year rates have fallen and expectations of more rate cuts in 2025 may well play into Scott Bessent's preferred focus, but it is all an indication of souring growth expectations.

And meanwhile other dynamics - such as a slowing in pace of AI expenditures and data centers - continue to swirl. It will be a dynamic and fluid situation for many weeks;