Market Quote: Next Tariff Deadline Looms Over Equity Markets
Author: The editor's desk
March 21, 2025
A weekly analysis of what’s happening in global financial markets from the perspective of AGF’s investment management team.
Levies Weigh Heavy
Global equity markets have recouped some of their recent losses this week, but trading remains choppy and several questions still need to be answered before the current bout of heightened market volatility subsides, in our opinion.
In particular, as we await the outcome of the potential imposition of reciprocal tariffs early next month, it’s still unclear how extensive the implementation of new levies on trade will be around the world and how much they will impact economic conditions like inflation and, by extension, corporate earnings.
Spirited Away
U.S. bank stocks rallied following the U.S. election in November because it was widely believed that deregulation policies of the new administration would unleash “animal spirits,” which, in turn, would drive stronger activity in capital markets and bolster commercial and industrial (C&I) loan growth.
But that hasn’t transpired quite to plan and the ‘shoot first, ask questions later’ economic policy approach of the U.S. President — specifically as it relates to tariffs — has taken the air out of the performance of some U.S bank stocks more recently.
In fact, while deregulation is still expected to benefit the sector, we expect tariff uncertainty is likely to pause further capital investment, which is weighing on the C&I loan growth outlook and may lead to lower economic growth forecasts, causing banks to increase their provisioning for credit losses.
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