It’s been a good end to a week from stock market hell, and we all know who we’d cast in the role of devil!

US President Donald Trump has always had a method in his apparent madness that worked well for him in his wheeling and dealing in the corridors of American corporations. But when it involves the eyes of Wall Street and the power brokers of some of the biggest countries in the world, it leads to stock market chaos.

However, before we go too far down a negative rabbit hole, let’s remind ourselves that fast stock market sell-offs have a history of reversing quicker than many expect. And I say this with US stocks up strongly overnight, so it’s timely to check out this chart of market comebacks.

Looking at the past fast drops of 7.5% or more, the team at Bespoke told CNBC the following: “In the past 16 situations, the market was higher on average when looking at one week, month, three months, six months and a year following the decline of at least 7.5% from all-time highs. One year later, the market had rebounded more than 13% on average and was in the green 69% of the time.”

Given the above, while it’s great to see this market rebound on Friday, given the unusual nature of Donald Trump and the reason for this stocks sell-off, namely tariffs where the US takes on the world, I don’t think the worst of this is over.

However, we are getting a preview of what will happen to stock prices, when a Donald-deal is done, probably after some heavyweight CEOs gang up and have a stern talking to this very unusual US President. That said, he’s not easily pushed around, though if Wall Street keeps reacting negatively to his trade trash talk, he might U-turn himself, if he thinks he’s had enough wins over trading partners to pat himself on his own back for the benefit of those who love and voted for the guy.

Keep your fingers crossed!

In many ways, this stock market slump is like a mini-version of Covid and, ultimately, will create buying opportunities that will drive share prices up once markets think the trade war looks settled. That could happen around April 2 when his reciprocal tariffs on most trading partners are scheduled to begin. In a perfect world, all his standover deals might be done, but of course, the Trump era is more of an imperfect world on steroids!

Shane Oliver looked at the worst-case scenario for the day after April Fool’s Day. “There is now a real risk that after 2^nd April average US tariffs will have risen to levels around or maybe even higher than they were after the Smoot-Hawley tariffs of 1930,” he said. “These famously contributed to the severity of the Great Depression as other countries retaliated and global trade collapsed.”

This is the worst-case scenario but being more positive, Oliver pointed out that Trump’s tariffs and the escalating trade war with the US means the RBA would give more rate cuts.

“This is because the escalating US tariffs pose more of a downside risk to Australian growth and less of an upside threat to inflation – as we won’t be putting tariffs on imports from the US and any boost to inflation from a weaker $A will be offset by weaker economic growth,” he explained.

Interestingly, overnight, the University of Michigan Survey of Consumers for March posted a reading of 57.9, which was a 10.5% decline from February’s reading and below the Dow Jones consensus estimate of 63.2, which means not only is Wall Street worried about Trump’s policies but also the US consumers who voted for him!

The one-year inflation outlook from this survey spiked to 4.9%, the highest reading since November 2022. That could work against a rate cut in the States and the President could cop the blame for that.

As a final comment, Mark Gibbens of BOK Financial, holds the same view on this big sell-off as me: “It’s hard to see it not continuing for the time being. Some sort of smooth statement coming out of the Trump administration” is needed to quell these sharp moves of stock prices.

Simply put, Donald created this negativity on global stock markets and only he can make it go away. That will happen but not as quickly as we’d all like.

Clearly, we’ll be looking for the time to go long stocks again,

To the local story and our S&P/ASX 200 Index had a good Friday with the market up 0.52%. But for the week it was given a real ‘trumping’, slumping 1.99% or 158.50 points.

As I pointed out above, we’re now down 8.75% in a month and the Index is up 1.56% for the past 12 months!

Let’s look at the stars and strugglers of the week that gained or lost 5% or more. (I won’t repeat any company’s share price moves for the week that are in “How top stocks fared” down below.)

To the Stars…

1. A2Milk milked the sell-off to rise 7.19% to $8.65.
2. Newmont glittered, up 5.20% to $73.43.
3. Regis Resources was gold rising 9.88% to $3.56 and they can thank Trump’s tariff concerns.
4. Evolution Mining had a golden result up 8.51% to $8.51.

And the Strugglers…

1. CAR Group spluttered off 5.75% to $33.10.
2. Healia Group was sick losing 7.53% to $5.53.
3. Neuren Pharmaceuticals wobbled down 5.19% to $11.68.
4. Myer lost share shoppers off 6.25% to $0.75.

What I liked

1. The decent bounce back of shares on Wall Street on Friday.
2. Eurozone shares haven’t fallen like a stone, unlike here, the US and most other markets.
3. OPEC increased supply and oil prices fell, which helps fight off any potential recession created by the Trump tariff plays.
4. The reaction of global buyers to the Musk-Trump plays, with Tesla’s share price down 30% since tariff talk and threats escalated. It’s being called the “Tesla Chainsaw Massacre”!
5. US job openings and quits rose in January, but this is ahead of the DOGE — Dept of Government Efficiency — led by Musk, who promises job cutbacks.
6. Canada cut its official central bank rate of interest again by 0.25% to 2.7%.
7. Locally, consumer confidence in March rose to a three-year high.

What I didn’t like

1. Trump’s tariff threats and tirades and the market reaction and the US stock market correction, which means a 10% fall.
2. No exemptions for local steel and aluminium producers.
3. Threats of 200% tariffs for European wine and spirits because of a 50% tariff imposed on US whisky.
4. US small business dived.
5. US consumer confidence slumped with the University of Michigan Survey of Consumers for March posting a reading of 57.9, a 10.5% decline from February and below the Dow Jones consensus estimate for 63.2.
6. US inflation in February fell to 2.8% year-on-year with the core (ex-food and energy) CPI falling to 3.1%.Producer price inflation also came in a bit softer than expected and fell on an annual basis.
7. China slipped back into consumer price deflation in February with the CPI down 0.7% year-on-year.
8. Locally, the February NAB business survey showed a fall in business confidence.

What do we look for this week?

It’s simple — Trump!

AMP’s Shane Oliver putting this week’s Trump tariff sell-off into economic perspective: “Trump’s erratic tariff announcements combined with DOGE’s manic cuts to the Federal workforce and service delivery at a time when the US labour market has cooled down and households have run down their pandemic savings buffers are increasing the risk of a US recession.”

But note this from economist, Holger Schmieding, chief economist at Berenberg Bank, to CNBC: “I don’t think we will talk about a U.S. recession. The U.S economy is resilient, I would say, largely despite Donald Trump.”