CGTN Europe spoke to Satosh Rao, Partner and Head of Research at Manhattan Venture Partners.
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00:00Let's talk now to Satosh Rao, who's Head of Research and Partner at Manhattan Venture Partners.
00:05I want to dig a little bit deeper into all of this. Let's talk about if this could get worse
00:11and if so, how quickly? Yeah, good morning, afternoon. That's the big question now,
00:19because no one knows. In the past, Trump has changed his mind and you saw the stock market
00:26short rally. There was a rumor and the market reacted well. So everyone's on the edge. No one
00:31knows where to go with this. But on the face of it, it just does not make sense. In any sense,
00:37you cannot justify this reciprocal tariffs the way he put it on there. I think he needs to go
00:44country by country and be very specific and negotiate a rate at 10 percent across the board
00:48maybe is defensible, but he's not going to change his mind. He likes what he's seeing.
00:55He's getting what he wants for the wrong reasons, though. The yields are coming down.
01:00The dollar is coming down. So he's happy with that. So I think that's not a good reason why
01:05to bring those things down. So I think you're going to see some back and forth, a lot of
01:10confusion. I would continue to hold. Not really. The market is very treacherous. Not come into this
01:17market and watch because you really can't trade this market that you don't know where the next
01:21step is. You're calling the market treacherous. Do you think investors think that Trump's trade
01:26policies are going to lead to recession in the U.S. and beyond? Yeah, if it continues and stays
01:33then down the road, not not immediately. I think right now what's going to happen if it stays
01:39is there's going to be an adjustment to this whole price increase, inflationary pressure on there.
01:44We'll see what the Fed, how the Fed reacts. They've said they're not going to do anything.
01:48They're not going to lower the rates at this point just because he's doing this. But at some
01:53point, maybe there will be additional pressure on him. But even this, I don't know how long this is
01:58sustainable, because if you see the energy exposed states, the senators from Nebraska, from the north
02:05and Texas, they're beginning to rumble and kind of say that, hey, come on, this is not really
02:11working, helping out. So I think you're going to see some internal pressure on him as well.
02:15Let's see if he buckles to that or if he just gives a pause and kind of says, let's look at it
02:21more closely. Very unlikely, but possible. So I think that's where we are. So recession is not on
02:27the cards. We still have a good economy, but he is really bringing a sledgehammer to this whole
02:32thing and maybe trying to correct something. Maybe his intentions may be right, but he's going about
02:38it the wrong way. Look, the decline in risky assets is pretty staggering. I know you're saying
02:44hold, but might you maybe consider this is actually the buying opportunity of the century?
02:51Yes, it usually is. But I would say if you want to start slowly getting in, OK, that's fine. It
02:58always works over a long term. It's always there. But invest in fundamental stories. Don't go with
03:03this momentum plays. At this point, go with companies that have pricing power. But I would
03:09wait. I mean, let go of this bottom 5 percent. We don't know. Like the people who bought in on
03:14Friday thinking that's the low. They're they're down in the water. So they're down in the red.
03:19I mean, they're losing money at this point. So I would wait because we need some clarity
03:24somewhere. I know there's by the time clarity comes, the market will go up. You make money when
03:31there is imperfect information. I know that. That's a fact of Wall Street or any investment.
03:36But I would say in this case, because it's so arbitrary, so random and doesn't make any
03:41economic sense, tariffs are regressive. They're not. They will lower the standard of living
03:46and they will really hurt U.S. and the dollar in the long run. So I think I'm hoping as an
03:52economist also and as a strategist, as an analyst, rather, I hope there's some sanity prevails and we
03:59come to some kind of a middle ground where things are more rational. At this point, it's very
04:04irrational and you don't want to jump in when you don't know what the next step is at this point.
04:09So I would say even if you get in, go in very lightly because there's a lot more that's going
04:13to happen. Just quickly, Sanjosh, we have got time for one quick one more. Look, you're talking here
04:19about standards of living being low and everyone's looking at their pensions shrinking and all of
04:23that. But I'm looking at oil that's now down to to 2021 levels. Is it going to get cheaper to
04:29fill up your petrol car? Is there a little shining light for petrol heads here?
04:35Yes, I think at this point there are some numbers where I saw that oil could be at a very worst
04:40case scenario. I was listening to one of the major oil analysts here that it could go as low as 40,
04:45but it's not unlikely. Oh dear, so sorry, we've lost Sanjosh there right at the end,
04:54but some really juicy analysis there. That was Sanjosh Rao from Manhattan Venture Partners.