Tariffs – Good for the Stock Market or Bad?

It seems that every time you turn on the news, whether it be on a financial news network or are even watching your local news; or when you look up news online or read a news headline from the actual newspaper (for those still reading those), you are getting bombarded with information regarding the tariff war going on between the US and many other countries.

The question I get from many of my subscribers is are tariffs going to hurt the market and if so how bad?

I am here to say tariffs could be good or bad depending on your perspective, knowledge of what industries tariffs could hurt or help and how to trade according to that knowledge.

Let Me Offer Both Perspectives on Tariffs

If one knows how to go long call AND put options OR if one knows both bullish and bearish option strategies, they have the power to make money in either market reaction, higher or lower (and even sideways).

With that knowledge it shouldn’t mater which way the market trades, one just has to have an assessment on direction, and they can trade options accordingly.

Negative Impacts

• Market Volatility: Tariff announcements often lead to uncertainty, causing fluctuations in stock prices since investors may go back and forth on what they feel the tariffs in the industry they follow will do to the profitability or lack thereof in the short term to stocks in that industry
• Higher Costs: Companies relying on imported goods may face increased production costs, squeezing profit margins – this could lead to less profitability. Expectations of lower profitability could cause investors to sell some of their shares driving down the share price
• Retaliation Risks: Tariffs can provoke retaliatory measures from other countries, further destabilizing markets

Positive Impacts

• Boost to Domestic Industries: Tariffs can protect local industries from foreign competition, potentially driving stock prices in those sectors. It could very well be deemed that a tariff on a product / commodity sold by a foreign country becomes more costly to acquire resulting in that foreign company losing  sales and profitability becomes less likely or them making as much as they did seems less likely.

That could then result in a UScompany producing and selling that same product at a lower cost drives up sales and increases the companies’ profits and therefore investor flock to acquire that stock due to strong sale and growth potential.

• Sector-Specific Gains: Industries like steel and manufacturing may benefit from tariff protections.

Industries That Could Potentially Do Well Because of Tariffs

As already mentioned, Steel and manufacturing companies may benefit from tariff protections.

Some others include Industrials, Agriculture along with Technology and Semiconductors are a few others.

Bottom line, tariffs can create opportunities for certain industries by reducing foreign competition and encouraging domestic production.

Tariffs, though they aim to protect domestic industries, often introduce uncertainty, and can negatively affect global trade-dependent sectors. That’s ok as well since I, as an options trader, know how to trade ‘put’ options to make money on stocks and ETF’s that go down in price.

When stocks are anticipated higher I like to execute ‘call’ options trades: Or call or put spreads if pricing on single option are deemed a bit too pricey.

I teach options education, I run multiple videos each week, where I give my overall market view, my sector specific insights and discuss potential stocks and ETF’s and crypto currencies.

I then break down for everyone where I see the security (stock , ETF or crypto) going in price and by when and if you want to learn from me a great place to start is my site Patterns and Profits.

Welcome to Patterns & Profits with Tom Gentile – Gulfport Analytics

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Toms Option Tools scan the markets for bullish and bearish trade opportunities using our proprietary scans and strategy algorithms. TTR Darknet finds bullish entries based on triple stack channel collisions. Money Calendar identifies seasonal patterns with at least 90% accuracy looking back 10 years. Weekly Cash Clock finds short term opportunities that last a week on average. Microcurrency Trader applies Darknet technology and moving averages to cryptocurrencies. Velocity Trader utilizes volume spike and Velocity indicators on custom stock lists. Quantum Scripts scans the markets for momentum acceleration signals and employs Quantum noise filters. Optimal Trader finds directional pre-earnings opportunities that are optimized for entry date, stock movement, and volatility surge. My Trades tracks the profit/loss of your trades, displays stock charts and risk graphs, creates new trades, and edits existing trades. Morning Report provides top 10 option rankings in 6 categories each day.

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