Not Yet Past Tariff Pain, Citi's Moore Says

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00:00How do you characterize the tariff threats impact on these markets?

00:03Yeah, so I think there are a few things to keep in mind here.

00:05Of course, we're kicking off U.S. earnings, the large cap earnings in earnest today with a bunch of the banks.

00:11And that's going to be really important for sentiment.

00:13So I think from an investor's perspective, everyone is very, very focused on the guidance and the commentary from U.S. management teams,

00:22especially since we continue to reach new all time highs, what felt like on a daily basis over the course of 2025.

00:29So I think that's important in weighing on sentiment.

00:32And people are in a wait-and-see mode, perhaps take a little profits.

00:35But the tariff side is really important.

00:37And I've been saying for the duration of 2025, or at least since the April 2nd tariff announcements,

00:43that we are past perhaps tariff shock, but not past tariff pain.

00:49And I think that the president of the United States will continue to use tariffs as a negotiating tactic with all of our trade partners.

00:56We saw this, of course, with China on Friday.

00:58It is not going to be off the table for the duration of this administration.

01:02Yeah.

01:02And I mean, there's so much focus on those earnings in the absence of government data because of the U.S. government shutdown.

01:07But I wonder on the tariff point, is it too soon for clarity on the impact of tariffs on companies' bottom line,

01:14given that, as you say, the U.S.-China tariff spot is ongoing?

01:18Yeah.

01:18So this is what I will say.

01:20This is where taking alternative data into your process is even more important than ever,

01:24because some of the official data doesn't tell the true story.

01:27And one piece of data I've been anchoring to has come from a Harvard Business School study.

01:32There's been kind of a scraping they do of the Internet and, like, looking at all these major U.S. retailers

01:37and kind of saying what's happening to prices.

01:40And for many of the imported goods, the prices have risen sharply over the course of the beginning of October,

01:46even as we haven't had official economic data.

01:49So I'm watching these third-party data, which is indicating basically that inflation is percolating once again.

01:56And I think that will make the decision for the Fed that much harder as we go through the fall.

02:00You talk about tariffs, and it seems timely to linger on that conversation a little bit, Kate,

02:05given we've had this news flow overnight, which once again catches our eye around China, the United States.

02:10So you draw a distinction between the shock and the pain.

02:12Yes.

02:13Is the pain less when there's no shock?

02:15I'm trying to work out whether we have a sort of reduced reaction function to tariff headlines.

02:21This is what I will say.

02:21We actually had this conversation yesterday, pardon me, last week on the team with some of our counterparts on the street, etc.

02:27People were just not talking about tariffs at all.

02:29I was trying to get a pulse of, you know, all the traders and everyone's in the markets business.

02:34And they were saying no client really wants to even talk about tariffs.

02:37They're thinking it is, you know, in the past.

02:39And, of course, this comes up on Friday, reminding everyone it's not just in the past.

02:43It's in the present and potentially in the future.

02:45So I think there was complacency around the impact that tariffs could have on overall activity and on price levels.

02:52And I think we're likely to see some impact, especially at the low-end consumer in the U.S.,

02:57of higher prices into the back end of this year.

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