Morning Brew April 8 2025

Good morning,

Tariff worries hold markets in a tight grip, and we are trading hope and despair very close to one another.

The US 500 traded a high-low range of nearly 10% yesterday chased by news all day, new threats against China weighed,  rumors of a tariff delay let it surge to 5250…  a great proof of the massive nervousness among traders was Rheinmetall, falling to a low at 933 before rising to a high at 1300 to close at 1244…The Vix crossed 60…

Volumes were huge, nearly 30 billion shares were traded, a new all time high.

Very curious if not worrying is the fact that US Bonds failed in their role as haven:  10 Year yields rose almost 30 basis points Ole points out: US Treasuries are losing their haven status. Capital is leaving the US at an increasing rate as the dollar’s reserve-currency standing is diminished, and the risk of a recession raises the likelihood of an inflation-stoking double-digit fiscal deficit.

With yields higher again the short term decline did not help the US treasury substantially in lowering the borrowing costs

This morning, it looks like we are calming down a little, equities are trading friendly with indexes between 0.5% and 1% higher, Gold, Silver and Oil up, Crypto friendly, the USD Index is slightly lower at 102.70. After the huge Selloff yesterday, the Nikkei gained 6%.

Current Levels: US500 5130, US Tech 100 NAS 17626, GER40 20130, Tesla 234, Apple 181, Nvidia 98, Gold 3000 Silver 30.15, EURUSD 1.0975, Bitcoin 80k, US 10 Year Yields 4.15%

It is not yet time for complacency, but we may see nerves calming - until the next news. The short term is very news dependent at the moment and every rumor or news can cause massive shifts as we saw yesterday. All economic data is of little importance until we see the first effects of the tariffs filter through – that is still months away.

Once the initial shock wears off, the implications on consumers will become clearer. Goods in the US will become massively more important, putting the Fed in a tight spot to lower rates.

The most interesting longer-term question will be the extent the US will be hurt by destroying the reputation as a reliable and predictable partner to the rest of the world.

Key headlines

• Elon Musk tried to convince DJT not to raise the tariffs but failed according to news, Trump reiterated people opposed to them were dumb.
• China pledged not to succumb to "blackmail" from the United States amidst a global trade conflict initiated by U.S. President Donald Trump.
• JPMorgan Chase CEO Jamie Dimon cautioned that trade wars might lead to enduring negative effects, he is joined by Bill Ackman, Larry Fink and other key players.
• UBS sees a US recession likely.
• The European Commission announced it had proposed a "zero-for-zero" tariff agreement to prevent a trade war with President Trump, as EU ministers decided to focus on negotiations while retaliating with 25% tariffs.

Here are two articles to help you navigate the – excuse my French – mess we find ourselves in thanks to Mr Trump

Navigating Trump’s tariffs: your top investment questions answered

• Maintain perspective: Even severe downturns historically end in recovery.
• Don’t panic, stay calm and disciplined: Avoid panic-driven decisions.
• Diversify broadly to cushion volatility: Cushion volatility by spreading risks.
• Use volatility to your advantage: Consider selective buying of high-quality stocks, and create watchlists of ETFs and stocks.
• Prepare your portfolio for inflation: Add inflation-resistant investments to your portfolio.
• Write down your investment plan: Anchor your decisions during volatility.

Looking to buy the dip? Here’s how you could screen for opportunities

• Looking to buy the dip? In a market meltdown, the real skill isn’t buying the dip—it’s knowing which dips are worth buying.
• Screeners to hunt for opportunities: We’ve built two targeted screeners to help you hunt for opportunity: one to spot solid companies unfairly dumped, another to catch elite growth names finally on sale.
• Key risks to watch: falling earnings, value traps in disguise, policy shocks from global power plays, and fast-moving sector rotations.

Tuesday, April 8, 2025

- U.S. NFIB Small Business Optimism Index (March): Indicator of small business confidence

- Ivey PMI

- Federal Reserve Official Daly Speaks: Policy insights from the Fed

- King Charles and Queen Camilla Begin State Visit to Italy

 Wednesday, April 9, 2025

- U.S. FOMC Meeting Minutes (March): Detailed discussions on monetary policy

- U.S. Reciprocal Tariffs Come Into Effect: Impacting trade with the EU and other nations

- King Charles Addresses Italian Parliament

Thursday, April 10, 2025

- U.S. Core CPI & CPI (March): Critical inflation data release

- Multiple Federal Reserve Officials Speak: Bowman, Schmid, Harker, Goolsbee provide commentary post-CPI data

- China Implements Tariffs on U.S. Goods (34%)

Friday, April 11, 2025

- U.S. Core PPI & PPI (March): Key producer price inflation indicators

- UK Monthly GDP Estimate Released

- Istanbul Mayor Ekrem Imamoglu Appears in Court