Media Chaos Makes Headlines, We Make Strategy

• Macro uncertainty has brought about the bears, even as stocks rally

• We see reason for optimism in the years ahead as mainstream outlets promote fear and division

• Risks are apparent, and a steady, strategic approach is required as the America First agenda is enacted

The beginning of Trump 2.0 has blown the minds of many in the media and drawn some investors away from their long-term plans. Stocks were historically expensive as the calendar flipped to 2025, with the S&P 500 rallying in response to the real estate mogul’s November 5 victory. 

Equity gains were pinned on hopes for tax cuts, deregulation, and targeted tariffs. That policy sequencing was upended on Trump’s first afternoon in the Oval Office. While delaying the onset of levies and a new trade regime on January 20, 2025, the POTUS promised steep duties on imported goods from countries that had been ripping us off for decades. 

That backdrop naturally spooked investors. It also made for dramatic media headlines and sensationalized stories about an impending economic collapse. While not every American is a student of the Great Depression, certainly most millennials and those older have seen Ferris Bueller’s Day Off, in which the lead character’s high school economics teacher, played by real-life economic commentator Ben Stein, relates the 1930 Smoot-Hawley Tariff Act as being the primary precursor to the sharpest economic decline in US history. 

When the president unveiled the reciprocal tariff placard from the White House Rose Garden on the evening of April 2, 2025, the mainstream media went down a dark path. To quote Ace Ventura from another classic film, "Fiction can be fun, but I find the reference section much more enlightening.” Later, we’ll explain why the facts make the case for investor calm, not chaos.

Investors without strategies might have also succumbed to the animal spirit of fear. Making wholesale portfolio changes either in November 2024 or shortly after Liberation Day proved to be bad moves—that's not simply outcome bias. Rather, allowing politically biased media narratives to sway your thinking about when and how to invest is a poor strategy. You must tune out the noise, rise above the fray, and be open to what could go right. 

At Allio, we believe the best macro investors thrive in the gap between perception and reality; you can harness turmoil to your advantage. Let’s explore why investing today might feel more challenging than ever and how the macroeconomic landscape, despite its volatility, is ripe with potential, and why the US economy is poised for growth once trade policies stabilize. 

The Disconnect Between Noise and Nuance

The second Trump administration has been a mainstream financial newsroom’s dream. They have served up a cocktail of chaos—tariff tensions, loud calls for recession (or worse), handwringing over the consumer, inflation, jobs data, and election speculation. Surely, the networks and their social media accounts have been rewarded by clicks and some public outrage. But that’s all noise, and news outlets thrive on it. 

A Deranged Mainstream Media

In contrast, a nuanced macroeconomic landscape doesn’t sell nearly as well as stories of imminent financial system collapse. As fast as stocks plunged following Liberation Day, they recovered, fooling so many so-called experts. Now beyond the first 100 days of Trump’s second term, the outlook is encouraging, in our view. 

To be clear, recession risk is real as we progress through a detox period—the transition from Biden’s stimulus-addicted economy to one grounded in fair trade, lower taxes, and deregulation. There are already green shoots:

1. Gas prices are down significantly from year-ago levels. 

   • Our portfolio management team of macro experts notes that gasoline futures prices are down by more than 20% from a year ago, 50 cents lower on the wholesale market.

   • You have to go back to Trump’s first term to find cheaper levels, which bodes well for Americans for the rest of the year. 

Gasoline Futures: Seasonal Lows Going Back to 2020

Source: TradingView

2. The labor market is cooling but not collapsing. 

   • Recent employment surveys suggest that companies, like grounded investors, have cut through the noise to turn profits amid a volatile macroeconomic environment. 

   • The jobless rate is historically low with cooling wage growth, easing the inflation burden on firms both big and small. 

US Average Hourly Earnings Growth YoY: Cooling, But Above the Prevailing Inflation Rate

Source: St. Louis Federal Reserve

3. Corporate earnings are holding up well. 

   • In Allio’s weekly Macro Calendar insights, we have profiled how it’s normal for S&P 500 earnings per share estimates to fall quickly in the year’s first two quarters. 

   • CEOs and CFOs, while uncertain about how the global economy will unfold in the future, demonstrate discipline as they prepare for whatever may come.

CY 2025 and 2026 Poised to Print Record S&P 500 Earnings Per Share

Source: FactSet

In short, the macro landscape might feel shaky, but it’s not unraveling. Investors relying on headlines and sentiment to dictate their allocation decisions are doing it wrong. Allio guides people to invest the right way, positioning portfolios for long-term growth.

American Association of Individual Investors Bulls Minus Bears: Historically Poor Stock Market Sentiment

Source: Stockcharts.com

Markets Are Discounting Mechanisms

Now, you might still feel uneasy about the state of play. After all, a potential 145% tariff on Chinese goods (effectively an embargo with the world’s second-largest economy), steep duties imposed on imports from ally nations, and what’s going to be a reconfiguring of global trade writ large is enough to make those favoring the status quo queasy. Moreover, a fast 19% drop in the S&P 500 and a 20%-plus plunge in the Nasdaq coincided with media stories of Trump’s reckless assault on what took decades to build. 

This narrative, while attention-grabbing, is so dangerous because it ignores one of the most compelling aspects of markets. Discounting. More than a century ago, famed investor and tape-reader Charles Dow developed the Dow Theory. First among its six tenets is the reality that the market discounts everything, namely the news. While not directly implying that markets are “efficient,” it posits that all the chaos currently clogging up your social media feeds is baked into stock prices. Hence, hiding out in cash and halting your periodic 401(k) purchases due to tariff fears is foolhardy since everyone already knows that trade policy is a risk. 

The Dow Theory’s Six Tenets

Worst-case scenarios are commonly discounted into the S&P 500 when fear reaches a zenith. The Cboe Volatility Index (VIX) soared to 60 in the sessions immediately after Trump’s Rose Garden presentation. Stocks bottomed on the third trading day from April 2, and before any real clarity emerged, equities had launched from their lows, leaving weak investors in cash. 

VIX to 60, Followed by a Fast Fall

Source: TradingView

As macro investors, we understand that markets don’t react solely to present-day data. Every price you see on your app reflects a blend of expectations, fear, greed, and opportunity. When sentiment is in the toilet, investors are susceptible to flushing their wealth away if they are not open to what could go right. 

President Trump and Treasury Secretary Scott Bessent have already demonstrated policy pragmatism. The POTUS’ Truth Social post on April 9, announcing a pause on reciprocal tariffs for 90 days, perhaps reflected that a larger mission is being crafted—a global trade resetting that turns about better for Americans. Of course, the media dismisses a sanguine possible outcome, opting for pre-mortems on Trump 2.0 and the death of American dominance.

For investors, this disconnect between headlines and reality is when macro strategy shines.

Macro Investing in an Age of Media Theater

Ray Dalio offers a framework for navigating all the chaos, and he has recently hit the public speaking circuit, cautioning market participants about the key downsides. We take those risks seriously, as part of our unbiased macro approach. Indeed, in a recent post, the Bridgewater Associates founder called out the perils of Trump taking a blunt approach to shaking up the world order. 

He described the situation of disrupted supply chains, manufacturing activity, and trade flows as being unpredictable, with tariffs contributing to increased recession risks globally. We believe recent developments point to the worst-case scenario being avoided as Trump and Bessent work to negotiate America First deals.

Where we agree with Dalio is on the condition of US finances. The country’s role as the largest consumer and debt issuer is unsustainable, and a risk is that the US dollar loses its reserve currency status. That’s why we have shed light on paradigms like the Mar-a-Lago Accord as a potential path to US prosperity. 

Dalio puts forward a message of hope, noting that the best outcomes depend on calm, coordinated, analytical management of so many macro changes, focusing on shared challenges of deleveraging and rebalancing global trade and debt, rather than reactive volatility and conflict. Investors and policymakers should avoid short-term reactions (dismissing the noise) and instead plan strategically for a world of smaller trade imbalances, reduced globalization, and new economic realities. 

A Summary of Ray Dalio’s It's Too Late: The Changes Are Coming

What’s Going Right in the Macro Picture

Media fearmongering, markets that discount the future, and a macro detox period make for a challenging climate to put money to work. Along with lower gas prices, a still-decent employment picture, and record corporate profits, there are facets to the economy that are underappreciated in Allio’s eyes. 

First, consumers and businesses have the power to pivot—when prices rise on a specific group of goods, say handbags made in China, they can substitute for other, non-tariffed items. This is a first principle of microeconomics: If one consumption category dips, another often benefits. Companies can do the same thing—perhaps that’s why the S&P 500 still trades with a price-to-earnings multiple near 20x. 

All the while, households and enterprises are getting what’s effectively a real-time tax break in the form of much lower energy prices. As was among President Trump’s many goals for his second four years, WTI crude oil is now under $60 per barrel, with the national average gas price potentially falling below $3 at some point in 2025. That frees up cash for spending and investment.

WTI Crude Oil: Lowest Since January 2021

Source: TradingView

Unlike the latter half of Biden’s term, Trump does not have the Fed on his side. Chair Powell once deemed tariffs a transitory inflation risk but now appears dug in with the left’s false conclusion that they will potentially lead to an inflationary cascade. Still, the bond market prices in at least a few Fed rate cuts over the year—another jolt for consumption and investment, particularly US small businesses. 

Fed Rate Cuts Likely On the Way Over the Back Half of 2025

Lower borrowing costs are undoubtedly a boon, and tax cuts could be the ultimate catalyst for animal spirits returning to Wall Street. The president laid out his 2026 budget proposal, and he has been talking more about delivering relief to families and corporations in the form of lower taxes. 

At a rally in Michigan, Trump called on Congress to pass “one big, beautiful bill” and once again deliver the largest tax cuts in history to the American people. That would entail exempting tips, overtime, and seniors’ Social Security from taxes, increasing real wages by as much as $3,300 per year and boosting take-home pay for median-income households by up to $5,000 annually.

A Big, Beautiful Bill...And Tax Cuts Possible

Source: The White House

Lastly, lost in the shuffle is the prospect of less red tape. Trump is a businessman—he wants fewer rules and hoops for risk-takers to jump through. As the 2026 mid-terms approach, we expect a ramp-up of initiatives to make life easier for domestic entrepreneurs and middle-class families. At the same time, corporate dealmaking should experience a renaissance as Biden-era restrictions are lifted—we’re talking IPOs, M&A, and increased private-sector risk-taking.

A Dearth of IPOs Under Biden

Source: BofA Global Research

Most investors are on edge today, unsure of what the stock market might do after panic selling, followed by seemingly panic buying. We urge you to remember that people and businesses are nimble, they are shrewd, they can pivot. Cheaper energy prices are tailwinds, and lower interest rates are an imminent boost. Tax cuts may come sooner than pundits think. Finally, deregulation is poised to be a signature of the president’s final years in office. 

Strategy Over Sentiment

Is there chaos right now? Yes. That’s how Donald Trump operates. He comes out swinging, seeking to distract and dishevel adversaries, and even his allies. But when emotions run high and binary outcomes are front and center, that’s when probabilistic strategy is demanded—if you want success in markets.  Fear is not a strategy. Neither is blind optimism. Macro investing is about probability, positioning, and preparation.

The Allio approach looks beyond the news cycle. We examine not only where we are in the economic cadence but also how policy, demographics, technology, and capital flows are likely to evolve. What we see today is not an economy in crisis—but one in a much-needed transition. A macro milieu where the old rules (zero rates, free globalization, infinite liquidity) are giving way to a more balanced and sustainable future—that’s the America First agenda.

We don’t pretend to predict the future. No one can. But we can prepare. As macro investors, we believe the right move now is to stay invested, stay diversified, and stay objective. The media will keep making noise, and politics will remain messy. But markets, over time, reward discipline and adaptability.

So, What Do We Do with All This?

Your approach must be rooted in your goals. Allio’s approach aims to provide automated investing options that consider broad economic trends while aligning with your objectives. You see, a personalized strategy is one you can better stick to when volatility inevitably rises and the media turns into a bearish circus. Our app and portfolio management process harness AI, adapting to the changing world order and all the hope it brings. 

Now is the time to:

• Reassess positions and exposures that were built for a different interest rate regime.

• Consider the upside case of US-focused plays as global trade reorients.

• Realize that volatility is a feature, not a bug; panic often offers reward chances.

• Use pullbacks as buying opportunities.

In other words: strategy over reaction.

The Bottom Line

You can’t ignore the news. It’s fruitless even to try. When the world watches every Truth Social post, eyes every poll, and dissects every presidential speech, rather than immediately reacting, you should be a second-order thinker. Sage investors know that what truly drives long-term returns is a repeatable process that views risk and reward through a long-term lens.

At Allio, we don’t ignore chaos—we factor it in with our dynamic macro portfolios, just as the market discounts all the news. We recognize that the media has one job: to sell ads. Ours is to help you generate wealth in a personalized way. If you're tired of reacting to the noise and ready to build a strategy that endures, now’s the time to get serious about the macro. Join the movement.