Stocks moved down slightly on Friday–with the Standard & Poor’s 500 off 0.50% and the NASDAQ Composite down 0.28%–as investors started to revise their belief that President Donald Trump wasn’t really serious about raising tariffs.
And they’re down again today, Monday.
Now that the White House as made it clear that the first round of tariffs–on Canada, Mexico, and China–will go into effect on Tuesday, I think we’ll see more downward movement in stocks. I don’t expect the drop to be swift or especially severe to start. That will have to wait until the economy starts to register the effects of higher prices for so much that we import.
But I’d like to get ahead of this revision in sentiment with some sells now.
Therefore on Monday, I will sell my positions in the iShares Russell 2000 ETF (IWM) out of both my Volatility (On my subscription JubakAM.com site) and Jubak Picks portfolios. Small cap stocks often take the biggest hit when market sentiment changes and the economy down shifts. I’ve got a gain of 1.78% in these positions since July 16, 2024. I’m leaving my positions in the ProShares Short Russell 2000 ETF (RWM) in place for obvious reasons. (Like if the Russell drops I can make money on the short side.)
I’m also selling shares of Anheuser-Busch InBev (BUD) out of my Jubak Picks Portfolio with a loss of 15.18% since November 30, 2022. BUD has heavy exposure to Mexican beer exports through its part ownership of BUD owns a stake in Grupo Modelo, which produces Corona and Modelo beers. In addition several Canadian provinces have already announced that they’ll pull U.S. brands off the shelves in state-run liquor stores. I don’t know the effects of that move on sales of Budweiser in Canada but i don’t imagine it will be positive.
I will be looking for other portfolio positions with exposure to the Trump Trade war in the next few days.
