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(Bloomberg) -- This is the market Ben Inker has been waiting for. In the grip of Wall Street’s rebellion against President Donald Trump’s tariff agenda – with stocks down around 2% this week even after Friday’s big rebound – Inker is among a cohort of investors making money in this year’s volatility spiral.
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The long-time skeptic of the US bull run is sitting on a 4% gain in his benchmark portfolio, beating most of his peers thanks to outsized bets on cheap shares and equities around the world, from Japan to Europe. The international positioning looks smart, for now. The average daily swing in US stocks and bonds has just jumped to levels unseen since the disruptive days of the Federal Reserve’s inflation-fighting campaign.
“This does feel pretty violent, mostly because the market had been pretty tame for a couple of years,” the 54-year-old co-head of asset allocation at Grantham Mayo Van Otterloo said in an interview, in the aftermath of the more than $5 trillion equity rout. “I’m very sympathetic to what the market is doing.”
The Boston-based manager is benefiting from trade war-disrupted markets that in the past seemed impervious to concerns about spiraling valuations and concentration. Hedge funds, retail speculators and retirement balances have taken hits, even accounting for days like Friday, when the S&P 500 staged its biggest bounce from a loss in seven months. But for a cohort of long-time skeptics of the tech-fomented bull run — like Inker’s peers in international equities and value investing — it’s been a market to be relished.
Wild rides are a regular feature of Wall Street. Still, what strikes market pros is how unique this moment feels. Much of the trading action can be ascribed to just one variable: Donald Trump.
Indeed, the market impact of Trump’s early days in office is by some definitions historic, at least in the lens of a new presidency. Amid mounting concern about tariff threats and government firings, US stocks just posted their worst start for new administration since the global financial crisis. The dollar is headed for its biggest post-inauguration loss since Richard Nixon began his second term in 1973.
All that made for another bruising week across assets, with the S&P 500 on Thursday capping a 10% plunge that took just 16 sessions — before a Friday rebound. Credit markets also started to confirm the growth angst as junk bond spreads widened. The US dollar was hit for a second week, extending its March loss to 2.5%.