Here are the winners and losers of the trade war

The administration has announced tariff rates for approximately 70 countries, effective next Thursday. This policy is actively reshaping market winners and losers despite record stock market highs. Some strategists believe there's a disconnect between market performance and economic reality, with tariff-driven inflation yet to fully impact consumers. Investors are advised to analyze sectors and companies individually to identify vulnerabilities and opportunities. Sectors like financials, Big Tech, utilities, and communications are expected to be winners. Conversely, consumer staples, energy, real estate, and health care are identified as potential losers. Consumer discretionary, industrials, and materials fall into a mixed category. Winners benefit from AI's strength and resilient consumer spending by wealthier individuals. Underperformers may face challenges from lower-income consumer weakness and sector-specific tariff impacts. For instance, luxury brands and travel companies are faring well, while discount retailers may struggle with increased costs. Big Tech's capital expenditures for AI strategies could sustain their rally, although some see Big Tech as potentially overvalued. Investors should consider overall asset class valuations to ensure their portfolios make sense. A significant market correction is anticipated, likely originating from sectors with stretched valuations. The administration's change on copper tariffs serves as a case study, showing how market expectations can misprice tariffs. Understanding the administration's ultimate trade policy goals is crucial for future market clarity.