Jay Woods, Chief Global Strategist at Freedom Capital Markets, spoke with NYSE (ICE) TV for a special video interview.
Watch the interview above and check out the transcript below, which has been lightly edited for length and clarity.
KRISTEN SCHOLER (KS): Joining me is our resident expert and friend of the show, Jay Woods. He’s a chief global strategist at Freedom Capital Markets. Jay, always good to have you, especially on a day like today. And as we prepare for this open, what do our viewers need to know?
JAY WOODS (JW): Take a deep breath. It’s could be a very bumpy ride today. Yesterday, liberation day. Today looks like liquidation day. We are seeing things in the red across the board. I was looking at where the safe havens and even gold is down as we enter this day. So we’ll see how it goes as the day progresses. But as a technician, we are gapping lower. We’re gapping below 5,500 in the S&P. We did that on Monday. We got below that level and then we quickly recaptured it. It does not have the feel like we’re about to recapture it this time and it could lead to a more drastic sell-off. So we’re watching the tape very closely. But the news out of Washington, tariffs are a little more excessive than we originally had thought. And as a result we’re waiting and we wanted clarity and we didn’t get it. We got news that was a little disheartening, to be nice. And now we have to wait another week to see if there are any reciprocal tariffs before these tariffs are implemented on some countries that we hadn’t talked about prior to yesterday.
KS: And Jay, we have a lot to cover, including a jobs report that we’ll get tomorrow, earning season, which will officially kick off next week, including from a consumer company Delta (DAL), but also these big banks. We are awaiting remarks in the boardroom from Newsmax’s CEO. So we will take our viewers to that soon here as we wait for that. Jay, the expectation for jobs, is the economy showing that the jobs market is still solid?
JW: Yeah, and that’s what’s interesting about why we’re making all these tariffs. They’re going to come back not just to the consumer but to the company’s bottom line.
KS: Jay, just about 20 minutes away from this open, after the president’s so-called liberation day, we were about to talk jobs. That’s another factor this week, as well. What are your expectations?
JW: Right now unemployment hasn’t been ticking up. We are still at historical lows. That’s why this is very frustrating because we are going to see unemployment rise. Now, we’re seeing inflation rise and growth slow. Hello—that’s the definition of stagflation. This is not what the economy needs right now and the odds of going into recession continue to grow.
But as far as tomorrow’s number go, I don’t expect anything drastic out of that number. The DOGE effects still have not taken effect. We see that from the weekly job list claims, which actually came in a little lighter than anticipated just today. Those won’t really have an impact until those severance checks are done and people actually claim for unemployment. But it will grow. And so tomorrow’s unemployment number, I don’t think it’s gonna move the needle too much. It’s what you talked about besides that. Earning season kicks up again, we have the banks starting next Friday. Delta, I believe is Wednesday. And it’s not what they report, it’s how they guide. One of the biggest fears was, “Well, we can’t give guidance because we don’t know what the tariff situation is.” Well, now we had liberation day. And we’re still not sure exactly how this is gonna affect the bottom line, so I can’t expect rosy outlooks as we go into this starting next week, but Jamie Dimon speaks on Friday. He’s always interesting. It’ll be interesting to see what he says.
KS: So for investors who are looking at their portfolios and at the market open, they’re probably gonna see if they hold the major indexes, for instance, 3% losses, the S&P returning to correction territory. How do they navigate the days and the weeks ahead in this environment?
JW: Well, don’t look at your portfolio today. But no, you know, these are days where you always want to, as I say, have a shopping list ready. It’s very cliche, but there are some stocks that are really getting hit. Why? Uncertainty. Not sure what the direction’s gonna be, but some names like Apple (AAPL) that are down trade now 207, 200 is major support level. Stocks that are breaking down. If you think there’s going to be some panic, which there is this sense, we’ve seen consumer sentiment at all-time lows. This could be the washout. And when you’re below 200-day moving averages, when you’re in bear market territory, meaning a 20% drawdown in individual stocks — we’re not there. In the S&P 500, we’re only down 10%. But you may get opportunities to get quick rewards for a snapback rally, but right now things are breaking down.
It doesn’t spell well for the next quarter or two given all of this continued uncertainty. But if you are watching this and you want to dip your toe in the water, you have cash on the sideline, put in what I call a low bid and see if one of your favorite stocks goes on sale and it gets accelerated. So if it’s trading down 3% in the pre-market, maybe down 6%, you buy a little bit here, you shop a little bit in these uncertain times, but I don’t think we’re gonna snap our fingers and get back on the winning track anytime soon right now.
KS: So it sounds like it is still perhaps a market to trade with the downtrend that does seem to be moving lower. Jay, what I’m gathering, based on what you’re sharing here, that we might see some relief rallies, but buy the dip, sell the rally, it sounds like might be the case.
JW: That’s exactly what the case was and we saw when the S&P 500 broke a key technical support level, that 200-day moving average, we got below it. Then what? What happened? We rallied a relief rally back to that average and then we failed. So the trends have changed, the rallies are being sold and until otherwise, until we get a little clarity it is going to continue to be that way for some time.