It could be JPMorgan’s (JPM) investor day at the moment, which brings with it the inevitable Jamie Dimon CEO successor chatter.
However a hat tip to Citigroup (C) CEO Jane Fraser for aiming to snag a couple of headlines of her personal in a uncommon weblog publish on Friday.
“We’re coming into a brand new section of globalization — one much less outlined by cooperation, and extra by strategic self-interest,” Fraser wrote. “Lengthy-held assumptions are being challenged, not simply by tariff bulletins however by a deeper confidence shock. The near-term impression is already being felt, and the long-term trajectory is being rewritten in actual time.”
Fraser mentioned the markets are signaling a “shift” by shifting to cost larger dangers into property.
“For those who’re seeking to markets for readability, you could be a tad upset,” Fraser wrote. “However in case you’re on the lookout for alerts, they’re in all places. Treasury yields rose whilst fairness markets wobbled. The U.S. greenback, sometimes a protected haven, has weakened at moments when it used to rally.”
“That tells us one thing deeper is occurring,” she continued. “Traders aren’t simply pricing near-term dangers; they’re reevaluating the credibility of long-held certainties. It is displaying up in how capital strikes. Pensions and asset managers are tilting extra in direction of Japan, India and elements of Europe. Hedge funds are being selective and did not chase the April fairness bounce. Sovereign wealth funds are diversifying extra aggressively. Hedging towards the greenback is now at ranges we have not seen in years.”
Learn extra right here: Learn how to shield your cash throughout financial turmoil, inventory market volatility
Traders can be smart to mirror on Fraser’s ideas.
Markets simply bought a damaging shock within the US dropping its sterling triple-A credit standing. Moody’s downgraded the US authorities late Friday, blaming massive fiscal deficits and rising curiosity prices. Shares bought off throughout the board on Monday because the 10-year Treasury yield (^TNX) rose above the important thing 4.5% degree.
One other market shock mendacity within the weeds is the third quarter earnings season, which generally begins in mid-October. Execs suppose the cumulative impact of tariffs will likely be most extreme within the third quarter, a lot to the dismay of upbeat analysts who proceed to count on bumper company earnings.
“I feel there is a lag between the tariff bulletins and once they truly hit the earnings,” Trivariate Analysis founder Adam Parker mentioned on Yahoo Finance’s Opening Bid podcast. “So I believe it is extra possible that third quarter numbers which are going to melt just a little bit.”
Citi’s Fraser sees the priority on company earnings from her perch, noting that the financial penalties of tariffs will take time to play out.
Learn extra: What Trump’s tariffs imply for the economic system and your pockets
“Tariffs work like sand within the gears of development, rising friction over time,” Fraser wrote. “We’re listening to it instantly from shoppers. … On the identical time, there could also be a break within the clouds. With inflation cooling barely and a short lived settlement between Beijing and Washington to decrease tariffs, markets rallied sharply this week and traders now consider the worst-case situation is off the desk.”
“Nonetheless, uncertainty stays,” Fraser added. “Firms are pausing selections, delaying capex and holding off on hiring. Many are making ready for second- and third-order results, from demand shocks to provider uncertainty.”
Brian Sozzi is Yahoo Finance’s Govt Editor. Comply with Sozzi on X @BrianSozzi, Instagram and on LinkedIn. Recommendations on tales? E mail brian.sozzi@yahoofinance.com.
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