Like in the Star Wars movie “The Phantom Menace”, the taxation of trade routes is leading to turmoil, including market turmoil. Bond and oil prices suggest the economy is about to abruptly slow down, following US President Donald Trump’s sweeping tariff announcements. The hope is the rest of the world will quickly come and negotiate with Trump, and some are. But the largest bilateral trade relationship is between China and the United States. China has called his bluff, raising its tariff on US imports to 52%.

Comparisons of indicators such as volatility ratios, deviations from averages and investor sentiment between today and previous flash crashes, all indicate high chances of the S&P 500 index being higher a year from now. But fundamentally, there’s no way to know what things will look like a year from now. We expect US valuations to compress and valuations to expand, as foreign savings fund domestic growth in Europe and China.