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1. Asian markets hit hard this morning…the global sell-off is spreading around the planet.

2. “An economic nuclear winter”, says Bill Ackman.

Bank of America Corp.’s Michael Hartnett became the latest to recommend investors “short” risk assets until the Trump administration pivots away from tariffs and toward tax cuts, higher energy supply, deregulation and an aggressive increase in the debt ceiling.

The strategist said that in the event of a recession, investors should wait for the S&P 500 Index to slump between 4,800 and 5,000 points “to go all-in on risk.” The low end of that range implies a drop of another 11%.

UBS Global Wealth Management’s Mark Haefele had earlier cut his rating on US stocks to neutral and slashed his year-end target for the S&P 500 by 9%, warning of more market volatility.

Legendary investor Bill Gross also urged prospective dip-buyers to stay on the sidelines.

But Ed Yardeni of eponymous firm Yardeni Research has emerged as a rare voice advocating for US stocks. A “great buying opportunity is being created here,” the Wall Street veteran said in a Bloomberg TV interview. “The market is giving a big thumbs down to this tariff policy.” Yardeni — who had reduced his own target for the benchmark twice last month — expects the Trump administration to face pressure and political backlash, with a growth slowdown that may even factor into the midterm elections in 2026. Trump is going to “back off in a way that he can declare” a victory with some concessions from US trading partners in the next three to six months, Yardeni said.

3. Tariff rout hits almost every corner of the market.

Even sectors that aren’t typically seen as sensitive to tariffs tumbled, as fears about an economic recession triggered by the aggressive trade regime spooked traders. “That’s what the sector rotation is telling us,” JC O’Hara, chief market technician at Roth Capital Partners said on Thursday.

“Earlier this year, when there was a risk-off day, you would still have risk-off sectors higher in trading. Today, basically everything is lower.”

Financials are a good example. Banks are not directly exposed to tariffs, but the Bank Index had its worst slide since the March 2023 regional banking crisis.

4. Transportation stocks, seen as an economic bellwether, entered a bear market.

The sector, along with the wider Dow Jones Industrial Average, is sending up a smoke signal for the market.

5. The rotation to defensives has just started.

For Barclays strategists led by Emmanuel Cau, defensives or bond proxy plays such as telecoms, utilities and REITS may stay in the lead for now.

Defensive sectors are under-owned, while positioning on some European cyclicals is extended, according to the latest Bank of America fund manager survey.

The consensus among analysts is that global growth will take a hit from a trade war and that stocks are not yet pricing in a slowdown. That was reflected by a sea of red in cyclicals last week, sending Europe’s blue-chip benchmark down by the most in three years.

Defensives outperformed as real estate and utility stocks were helped by a plunge in bond yields. Outside bond proxies, some other sectors are looking relatively immune.

Goldman Sachs’s TMT sales specialist Sean Johnstone says telecoms should see “no impact” and “should be a good place to hide,” given they held up last time.

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