"Tactical Tariff Thoughts": A Must-Read April 2 Primer From JPMorgan's Trading Desk

Ahead of Trump's April 2 tariff "Liberation day" JPM's Market Intel desk has published a primer laying out its Tactical Tariff Thoughts (full note available to pro subs). The trading team starts off by immediately noting that it remains Tactically Bearish (as a reminder, it turned bullish around the time of the October 2022 lows and was bullish up until a month ago). The team, led by JPM's Andrew Tyler writes that "policy uncertainty is the dominant factor in the markets and that neither the Trump Put nor Fed Put activate in the near-term." Further, they see downward pressure on the soft economic data though hard data is likely to remain resilient, potentially putting a floor on the next US downdraft. That said, one potential event that could break the bearish outlook is the announcement of a trade deal, or framework of one, with a G7 country ahead of the announcement, e.g. US/UK deal could allow the market to look through tariffs on places such as the EU and/or Japan.

JPM's proposed Monetization Menu: