Maybe don’t look at your stock portfolio today

Summary

Marketplace Morning Report - Episode Summary: "Maybe Don’t Look at Your Stock Portfolio Today"

Release Date: April 4, 2025
Host: David Brancaccio
Podcast: Marketplace Morning Report

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Market Overview: Sharp Decline Fueled by Chinese Tariffs

The episode opens with a significant downturn in the U.S. stock market, attributed primarily to China's announcement of new hefty tariffs on American goods. David Brancaccio reports that the Dow Jones Industrial Average plummeted by 2.6%, the S&P 500 fell by 3%, and the Nasdaq experienced a 3.1% decline. This sharp decline follows a preceding 4% drop in the Nasdaq, marking the deepest skid since the initial pandemic lockdowns in 2020.

David Brancaccio [00:31]:
"The Dow is down another 1,052 points, 2.6%. The S&P is down 3%. The Nasdaq is down 3.1% with yesterday's 4% drop on the Nasdaq, the deepest skid since the first pandemic lockdowns in 2020."

Economic Indicators: Mixed Signals in the U.S. Economy

Despite the market downturn, there are contrasting indicators regarding the U.S. economy's health. The U.S. economy added 228,000 jobs in March, showcasing unexpected strength. However, economists caution that this robust job growth might not sustain throughout the financial quarter.

Christopher Low [01:23]:
"The average job gain in the quarter, 157,000, is a little weaker than the fourth quarter. It's not all that inspiring."

Additionally, the unemployment rate has slightly increased to 4.2%, raising concerns about the labor market's stability.

David Brancaccio [01:33]:
"Meanwhile, the house to house survey finds the unemployment rate unexpectedly going the wrong way, up slightly to 4.2%."

Interest Rates and Recession Fears

Amid these economic shifts, interest rates have seen a significant decrease, with the 10-year benchmark dropping below 4% for the first time in a year and a half. While lower interest rates can benefit borrowers, Christopher Low highlights that this decline signals growing concerns about a potential global recession.

Christopher Low [01:56]:
"We're likely to see the lowest mortgage rates in a while, but the reason those yields are down is because traders are increasingly convinced the global economy is heading into a recession."

Broadening the scope, Low emphasizes that the expectation of a recession isn't confined to the U.S. but extends globally, exacerbated by the new tariffs disrupting international trade.

Christopher Low [02:42]:
"Oh, absolutely. You know, I mean, that's the whole point of tariffs, right? Is that America, which is the world's consumer, is not going to buy foreign made products, at least not as much. So that means manufacturing output globally is going to decline, most likely."

China's Tariff Strategy and Its Impact

Jennifer Pack, Marketplace's China correspondent based in Shanghai, provides an in-depth analysis of China's retaliatory tariffs. While China's new tariffs target fewer American goods compared to President Trump's initial tariffs, they introduce significant challenges for U.S. exporters.

Jennifer Pack [03:25]:
"China's new tariffs will hit far fewer American goods than President Trump's tariffs because the Chinese do not import as much from the US as Americans buy from China. Last year, China bought some $140 billion worth of American exports such as semiconductors and agricultural goods. But it's sold well over $400 billion worth of things like smartphones and furniture."

China has also implemented non-tariff measures, including export controls on rare earths essential for high-tech products and placing 27 American firms under trade sanctions or export controls. This escalation underscores the tension between the two economic giants.

Jennifer Pack [03:25]:
"A commentary in the government news agency Xinhua says the U.S. tariffs are a 'flagrant bullying practice' in Shanghai."

Union Support and Industry Pivot: The United Auto Workers (UAW) Response

The episode shifts focus to the United Auto Workers (UAW) union, which is tentatively supporting the administration's strategy to hike import taxes. The union believes that these tariffs could incentivize businesses to produce more within U.S. union factories. However, industries like apparel and footwear face significant challenges in adjusting to the new tariffs.

Denise Greene [05:59]:
"With tariffs targeting all U.S. trading partners, there's nowhere to hide. They cannot move production to other countries to avoid a tariff in one country in any realistic timeframe. And moving garment manufacturing to the US is just not an option."
— Stephen Lamar, Head of the American Apparel and Footwear Association

Compounding these challenges is the lack of sufficient labor, skill sets, and infrastructure in the U.S. to scale up production effectively.

Christopher Low [06:30]:
"Because we don't have the labor, the skill sets, the infrastructure, the capabilities to scale up production."

Impact on the Global Apparel Industry

Denise Greene from Cornell emphasizes that the tariffs could devastate the global apparel industry, leading to higher costs for consumers. She suggests a potential silver lining in reduced waste, encouraging consumers to value and maintain their clothing better.

Denise Greene [06:38]:
"We're not going to be able to buy clothing as inexpensively as we have in the past."

Denise Greene [06:44]:
"There could be an upside, though. We've been buying and wasting a lot of apparel for years."

Used Car Market Insights: A Glimpse from Britain

Shifting from macroeconomic trends, Henry Epp reports on the robust used car market in Britain. With the average selling price reaching $10,500 in January—a 6% increase from the previous year—the market shows resilience despite the influx of electric vehicles (EVs).

Ben Muster [08:16]:
"Ideally, we kind of look at the mileage, so as long as it's not too heavy on the miles, preferably under eight years old."

The surge in EVs reduces the supply of traditional petrol and diesel cars, driving up their prices. However, not all dealers are ready to pivot entirely to EVs.

Sonny Batt [08:49]:
"It's a supply and demand issue. There's a massive influx of electric cars, so a lot of the auctions have less and less petrol and diesel cars, which will drive the price up."

Human Element: The Auction Experience

Leanna Byrne, Marketplace’s BBC colleague, takes listeners inside a car auction in Mannheim Leeds, England. Here, the high-paced environment showcases the dynamics of buying and selling vehicles. From stringent inspection processes to the competitive bidding on auction floors, Hansen highlights the meticulous nature of the used car trade.

Ben Muster [09:34]:
"We're trained professionals. You're okay."

The segment underscores the ongoing strength and adaptability of in-person markets amidst broader economic uncertainties.

Volatility and Mortgage Rates: Final Numbers

Concluding the episode, David Brancaccio shares key financial indicators:

• The 30-year fixed mortgage rate has decreased to 6.63%, down from 7.25% in mid-January.
• The VIX index, known as Wall Street's fear gauge, has risen by 25% this morning, reflecting increased market volatility.

David Brancaccio [04:28]:
"Daily's average 30-year fixed rate mortgage calculation is down at 6.63% now. It was seven and a quarter in mid-January. One more number for you. The VIX index of stock market volatility is up 25% this morning."

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Conclusion

In this episode of the Marketplace Morning Report, David Brancaccio navigates listeners through a tumultuous economic landscape marked by aggressive Chinese tariffs, significant stock market declines, and mixed economic indicators. Expert insights from economists and industry leaders highlight the far-reaching implications of these developments, from job markets to global trade dynamics. Additionally, on-the-ground reports from Britain's used car auctions provide a tangible perspective on how these macroeconomic factors influence everyday markets. As uncertainties loom, listeners are advised to approach their financial portfolios with caution, encapsulated aptly in the episode's title: "Maybe Don’t Look at Your Stock Portfolio Today."

Transcript

[T Mobile Representative]

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[David Brancaccio]

The stock market plummets again with news China is putting hefty new tariffs on American goods. I'm David Brancaccio in Los Angeles. The news out of China today can be summarized like this. We see your 34% tariffs United States and we match with new 34% tariffs of our own. If we were hesitant to use the phrase trade war before, it seems more apt now. And the Dow is down another 1,052 points 2.6%. The S&P is down 3%. The Nasdaq is down 3.1% with yesterday's 4% drop on the Nasdaq, the deepest skid since the first pandemic lockdowns in 2020. There is also news this morning. The US economy added 228,000 more jobs in March, surprisingly strong, but not a few widen out to the whole financial quarter.

[Christopher Low]

The average job gain in the quarter, 157,000, is a little weaker than the fourth quarter. It's not all that inspiring.

[David Brancaccio]

Christopher Low is chief economist at FHN Financial in New York. Meanwhile, the house to house survey finds the unemployment rate unexpectedly going the wrong way, up slightly to 4.2%. Okay, but looking for something positive to cling to during times like these. Interest rates are way down with the 10 year benchmark below 4% for the first time in a year and a half.

[Christopher Low]

Yeah, I like the way you call it cheer. Yes, it does mean if you're borrowing money to pay for something, it'll be cheaper in a sense buying a house, for example. We're likely to see the lowest mortgage rates in a while, but the reason those yields are down is because traders are increasingly convinced the global economy is heading into a recession. And that obviously not great news in terms of what we can expect for jobs and income going forward.

[David Brancaccio]

I don't like the word global in what you just said. I've had a bunch of economists on this program talk about recession. United States second half of this year. But you think it's elsewhere too, right?

[Christopher Low]

Oh, absolutely. You know, I mean, that's the whole point of tariffs, right? Is that America, which is the world's consumer, is not going to buy foreign made products, at least not as much. So that means manufacturing output globally is going to decline, most likely. And the result, you don't really have that engine of growth that you like to see to lift you out of a recession.

[David Brancaccio]

Christopher Lowe, Chief Economist, FHN Financial thank you.

[Christopher Low]

Thank you, David.

[David Brancaccio]

For more on how Beijing is responding to U.S. tariffs, here's Marketplaces China correspondent Jennifer Pack in Shanghai.

[Jennifer Pack]

China's new tariffs will hit far fewer American goods than President Trump's tariffs because the Chinese do not import as much from the US As Americans buy from China. Last year, China bought some $140 billion worth of American exports such as semiconductors and agricultural goods. But it's sold well over $400 billion worth of things like smartphones and furniture. China's new tariffs are on top of existing retaliatory tariffs of 10 to 15% on certain American exports such as coal, crude oil and agricultural products. Separately, China's Commerce Ministry has imposed non tariff measures on Friday. It has added export controls on more rare earths critical for the production of high tech products such as computer chips. China has also put 27American firms on lists of companies subject to trade sanctions or export controls. A commentary in the government news agency Xinhua says the U.S. tariffs are a quote, flagrant bullying practice in Shanghai. I'm Jennifer Paak from Marketplace Mortgage News.

[David Brancaccio]

Daily's average 30 year fixed rate mortgage calculation is down at 6.63% now. It was seven and a quarter in mid January. One more number for you. The VIX index of stock market volatility is up 25% this morning. That's sometimes called Wall Street's fear gauge.

[Henry Epp]

Foreign.

[T Mobile Representative]

T Mobile network outperforms expectations in all sectors because T Mobile helps keep you connected from the heart of Portland to right where you are On America's largest 5G network Switch now keep your phone and T Mobile will pay it off up to $800 per line via prepaid card. Visit your local T Mobile location or learn more@t mobile.com keepandswitch up to 4 lines of your virtual prepaid card last 15 days qualified unlocked device credit service port in 90 plus days device knowledgeable carrier and timely redemption required card is no cash access and expires in six months.

[David Brancaccio]

We have a report today now in the podcast on the United Auto Workers union, offering tentative support to the administration's hiking of import taxes if these tariffs do encourage businesses to make more at union factories on U.S. soil. But among industries trying to pivot given the tariffs clothing and shoes A lot of apparel is made in Southeast Asia, where exports are facing tariffs now of more than 30%. Here's Marketplace's Henry Epp.

[Denise Greene]

When President Trump raised taxes on imports from China in his first term, apparel companies moved a lot of their operations elsewhere, especially to Vietnam, says David Swartz with Morningstar. This time, with tariffs targeting all U.S. trading partners, there's nowhere to hide. They cannot move production to other countries to avoid a tariff in one country in any realistic timeframe. And moving garment manufacturing to the US Is just not an option, says Stephen Lamar, head of the American Apparel and Footwear Association.

[Christopher Low]

Because we don't have the labor, the skill sets, the infrastructure, the capabilities to scale up production.

[Denise Greene]

Bottom line, says Denise Greene at Cornell.

[Henry Epp]

University, we're not going to be able to buy clothing as inexpensively as we have in the past.

[Denise Greene]

There could be an upside, though. We've been buying and wasting a lot of apparel for years, she says.

[Henry Epp]

Maybe we come to value clothing and take care of it and ensure its longevity.

[Denise Greene]

But Green says tariffs will devastate the global apparel industry. I'm Henry Epp for Marketplace.

[David Brancaccio]

In an economy that's so many binary digits these days, we like to learn about markets where humans come together face to face. Our series here, Tricks of the Trade, is in search of wisdom from the pros who work in these kinds of in person markets today. Listen to a car auction in Britain. Here's my Marketplace BBC colleague Leanna Byrne.

[Henry Epp]

This is what it sounds like when a car gets sold. It happens in seconds right here at Mannheim Leeds in the north of England. About 250 cars are going under the hammer here today, and I'm right in the thick of it.

[Ben Muster]

We roughly sell about 50,000 vehicles a year out of this one centre.

[Henry Epp]

That's Ben Muster, centre manager. Out in the yard, it's a fresh spring morning. Cars arrive by truck and undergo a rigorous process before hitting the auction floor. Cleaned, inspected and graded. Over in the main building is Mannheim's expansive warehouse. Lined neatly across the floor are gleaming cars waiting their turn to be driven down to the double lane auction floor. Here, Sonny Batt, who runs SRH Cars and Leeds, is eyeing up German premium cars.

[Ben Muster]

Ideally, we kind of look at the mileage, so as long as it's not too heavy on the miles, preferably under.

[Henry Epp]

8 years old and how much would Something like that. Go for it.

[Ben Muster]

Depends on the brand. You'd be hoping to pay around about 8,9000 pounds.

[Henry Epp]

That's about $11,000. And according to another player, British Car Auctions, the UK's used car market is going strong, with the average selling price $10,500 in January, up 6% from the year before. Sunny says we have electric vehicles to thank for that.

[Ben Muster]

It's a supply and demand issue. There's a massive influx of electric cars, so a lot of the auctions have less and less petrol and diesel cars, which will drive the price up.

[Henry Epp]

By petrol and diesel, Sony means gas cars. And despite this influx of EVS into the market, Sonny says for now he's not interested.

[Ben Muster]

I'd rather stick to the petrol and diesel cars that we know and kind of love and we can fix.

[Henry Epp]

In the middle of the two lanes, Gwen is selling the essentials.

[Ben Muster]

Bacon sandwiches, sausage sandwiches, chicken wraps.

[Henry Epp]

That smells brilliant. Nice bacon. Can't beat it. After greeting all the regulars on the auction front floor, Ben Muster gets me to go shoulder to shoulder with the other bidders.

[Ben Muster]

So we're on lot number 496. This is a Mitsubishi Shogun and it's 130,000 miles. It's got a guide price, an auction guide price of about 2,000 to 2,450.

[Henry Epp]

Okay.

[Ben Muster]

Where do you think it's probably going to end up?

[Henry Epp]

Say, 2,000?

[T Mobile Representative]

I don't.

[Ben Muster]

I don't think you're a million miles away. I think that's going to probably do 17. 1800 pounds. Nobody. Nobody's putting their hand up just yet.

[Henry Epp]

I better keep my hand down.

[David Brancaccio]

We're all right.

[Ben Muster]

We're trained professionals. You're okay. So he's now asking for 18. The Internet's flashed up there. 1900 pounds.

[Henry Epp]

Yeah.

[Ben Muster]

So that's now gone provisional.

[Henry Epp]

That's it. It's done.

[Ben Muster]

That's vehicles offered and out the door.

[Henry Epp]

It wasn't too far off.

[Ben Muster]

You wasn't. I didn't mention 18.

[Henry Epp]

Okay, so Ben wins this one. It's clear here at Mannheim Leeds, the used car market remains strong and always moving. I'm the BBC's Lianna Byrne for Marketplace.

[David Brancaccio]

Day two of the stock market digesting sharply higher tariffs. The dow down another 1,022 points. 2.5%. Marketplace Morning Report from APM, American Public Media.

[Janelli Espinal]

If there's one thing we know about social media, it's that misinformation is everywhere, especially when it comes to personal financing. Financially inclined from Marketplace is a podcast you can trust to help you get serious about your money so you can build a life you've always dreamed of. I'm the host, Janelli Espinal, and each week I ask experts important money questions, like how to negotiate job offers, how to choose a college that you can afford, and how to talk about money with friends and family. Listen to financially inclined wherever you get your podcast.