Cetera Financial Group shared early insights this week on the economic impact of the tariffs implemented by the Trump administration. Gene Goldman, chief investment officer and director of research at Cetera Investment Management, noted that with nearly a month passed since the tariffs were announced on April 2, the effects on inflation and the broader economy are becoming more visible.
The ISM Manufacturing Index – a key economic indicator that provides a monthly snapshot of U.S. manufacturing sector activity – provides one of the first data points reflecting those effects. The index declined from 49 to 48.4 in April.
“This is consistent with the impact of tariffs: more inflation and slower growth. Expect new orders to fall, and prices paid to rise,” Goldman said.
Also known as the Manufacturing Purchasing Managers’ Index, or PMI, the ISM index is published by the Institute for Supply Management on the first business day of each month, making it one of the earliest indicators of overall economic performance.
Goldman also pointed to “extreme bearishness” in the market, which he views as a contrarian indicator. If tariff revenues are recycled into the economy as tax cuts, he said, the U.S. could avoid a recession.
“Volatility will be with us for a long time, but I still expect equities to be higher at year end than they are right now,” Goldman added. His comments echo themes he shared at ADISA’s Spring Conference in Los Angeles one month earlier.
At that presentation to the alternative investment industry, Goldman noted that nearly all aspects of the economy and markets are moderating significantly – including growth, the labor market, inflation, and stock returns – and that was before “Liberation Day.”
Perhaps most importantly, the strategist declared that “diversification is back.” After recent years where diversifying portfolios away from concentrated large-cap growth and technology stocks often hindered relative performance, Cetera’s view for 2025 is that broader diversification will again prove beneficial and help mitigate market volatility.
Click here to visit the AltsWire directory page.
Read the full article here
