Sell America?

Katie Martin (0:06)

Pushkin. Oh, America, what have you done? It's all going wrong over in markets. I'm not quite sure where to start here, but stocks have been taking a beating, led by US national champions in big tech. The dollar is wobbling, even though inflation is widely expected to kick higher, so much for the dollar's haven status. US government bonds, pretty much the same deal, no likey. The latest thing adding fuel to the fire is of course Mr. Donald J. Trump really cranking up the heat on head of the Central Bank, J. Powell. None of this is good. So today on the show, we're asking, is the sell America trade on? Can anything turn this around? This is Unhedged, the markets and finance podcast from the Financial Times and our friends at Pushkin. I'm Katie Martin, a markets columnist at the FT in London.

Fresh from a four-day weekend, spent gardening, climbing and doing as little else as possible. I'm joined down the line from New York City by two sacrificial Americans, Stooges, for us to laugh and point at. That talented young man, Aiden Reiter, is back in the house, joined by the big man, Rob Armstrong, who's back from some time out in the sunshine. He is apparently tanned and rested Rob, Santa Fe, I hear.

Robert Armstrong (1:32)

Santa Fe, adobe and turquoise. That is what that, even the McDonald's is adobe in Santa Fe. It's incredible. My son looked around, and he's like, every store in this town is the same, and he's exactly right. If you want to buy anything besides turquoise jewelry, cowboy hats, and cowboy boots, you are out of luck in Santa Fe.

Katie Martin (2:00)

What's the food? What's the vibe?

Robert Armstrong (2:01)

The food is great. It's southwestern food and Mexican food. It's at 6,000 feet, so the air is bright and clear. The mountains are surrounding you, and they're beautiful. I mean, it's a cool place.

Aiden Reiter (2:13)

Did you get your food all Christmas style?

Robert Armstrong (2:15)

Yeah, exactly. Exactly.

The red salsa and the green salsa, Christmas style is what they call it. It's really good. Yeah.

Katie Martin (2:23)

Well, look, it sounds lovely, but I'm not going. And you know why? Because I don't want to end up in a detention center in Louisiana, because some random immigration official doesn't like my resting journalist face.

Robert Armstrong (2:35)

Louisiana is very nice, but I don't know about its detention centers.

Katie Martin (2:40)

This is one of the problems that the states has got here, right? Nobody in their right mind wants to go there anymore.

Robert Armstrong (2:47)

Yeah.

Katie Martin (2:47)

I mean, tourism numbers are collapsing from overseas. The Canadians in particular have got some serious beef with you guys and they don't want to visit.

Robert Armstrong (2:57)

Well, I'm going to come on this show and be the optimistic one. I am going to say mistakes have been made to use the first George Bush's passive voice locution, but the damage can be repaired if we change course.

Aiden Reiter (3:15)

And also, I'll say, I was just in Miami and I saw a lot of Canadians. So they're still coming.

Robert Armstrong (3:20)

Right on. But maybe we should talk about the damage. What is the damage? What's the latest on that?

Katie Martin (3:24)

Well, luckily for you, I've written down some numbers about the damage. S&P 500 down 12% so far this year. Now, I will note, and I wrote about this the other day, it's up quite a lot from the very low point of that Liberation Day week when Trump announced the tariffs. So if you were lucky or skillful enough to call the bottom there, then congratulations. But I don't personally, I don't see it lasting. NASDAQ down 18%.

So anything sort of tech-flavoured is getting particularly hard hit. Now, one of the reasons why this is particularly bad for you guys is, meanwhile, even UK stocks are up a bit, and the DAX in Germany is up 7% or 17 in dollars. I could go on. The euro's up at 115 So like $1.15, big jump in the euro, big drop in the dollar. Gold up at 3,500 bucks an ounce.

Robert Armstrong (4:20)

I think gold is the most important indicator here. Because as I've said before, I think gold is just the flip side of fear.

Katie Martin (4:29)

Yeah.

Robert Armstrong (4:30)

I don't think it's not an inflation hedge. It's not an asset. I don't care about its industrial uses. It is stupid, but it is the thing you buy when you're scared. It's like even when the other not scary stuff is not, not scary enough, you buy gold. And gold at $3,500, for those of you who don't follow that price, is bananas.