Haven't Seen Full Retaliation from Tariffs Yet: JPMorgan's Meera Pandit

Money managers are warning that the trade war is threatening to trigger a worldwide recession.

The S&P 500 Index tumbled as much as 5.2%, and stocks in Italy, France, Switzerland, and Germany have plunged 10% or more from their highs.

Traders are pricing in a negative-feedback loop as Trump indicates he's not going to back down, and Federal Reserve Chair Jerome Powell says the shift in trade policy is likely to fan inflation and slow the pace of growth.

Meera Pandit Executive Director, Global Market Strategist JP Morgan Asset Management joins to discuss the market selloff and what to expect from the tariff volatility.

Up and down Wall Street, executives are starting to come to terms with a new reality: Donald Trump isn’t delivering the long-awaited rebound in M&A they hoped he would.

Inside JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., executives are considering revising down internal revenue projections for their advisory businesses for this year. Such moves across the industry could portend job cuts in the second half if the environment doesn’t improve.

Even before this week, UBS Group AG has begun asking senior investment bankers to draw up lists of employees who could be included in potential cutbacks, according to people with knowledge of the matter who asked not to be identified discussing information that isn’t public. Bank of America has trimmed some investment-banking roles across London in recent weeks, though the cuts aren’t related to the slowdown, people familiar with the moves said.

It’s a sharp reversal from just five months ago, when bankers had high hopes that Trump’s plans to introduce sweeping tax cuts and do away with large swaths of regulation would unleash a wave of dealmaking and capital-markets activity.

Instead, his policy changes have caused markets to go haywire and reignited inflation fears, causing many companies to pause any plans for mergers. Trump delivered the latest blow to confidence on Wednesday, when his plan to roll out a raft of tariffs on major trading partners around the world wiped out some $3 trillion of stock-market value and caused the dollar to tumble by the most in at least two decades.

Already, the havoc in markets has caused companies including Klarna Group Plc and Stubhub Holdings Inc. to pause their initial public offerings. That spells bad news for legions of equity underwriters across Wall Street and the fees banks normally collect from such work.

“We are now facing a number of simultaneous hits to the global economy in general, and the US financial sector in particular,” said Tom Kirchmaier, professor at the Centre for Economic Performance at the London School of Economics. The tariffs, he said, will likely cause a slowdown in economic activity, which would “mean that there will be substantially lower financial-advisory work to be done.”

Spokespeople for Bank of America, Goldman Sachs, JPMorgan and UBS declined to comment.

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