Morning Brew April 9 2025

Good morning,

Today may go down in history as the pinnacle of self-inflicted wealth-destruction, as Trump's tariffs take effect, with China being hit with 104%. The market reaction is that US equities, bonds, as well as the USD, are being sold in a worrying show of distrust in US assets. If this development continues, it will become concerning quickly. The US500 is at 4870, 10-year yields at 4.40, EURUSD at 1.1040, and the USD Index at 102.30. Gold is at 3015, and silver at 29.90. USDCNH is near an all-time high at 7.3750, and Bitcoin is at 76k. AUDUSD looks in freefall.

It is hard to see anyone happy with the tariffs, neither in the US nor globally, and I would expect massive opposition soon. Cracks are appearing in Trump's inner circle as Elon Musk states Peter Navarro is "dumber than a sack of bricks." Also, internationally, tones are getting rougher; JD Vance insulted the Chinese by stating the US was borrowing from Chinese peasants to buy things those peasants manufacture, to which China called him ignorant. While it appears amusing, these episodes are really a sign that nerves are lying raw.

Microsoft halted massive data center investments of more than 1 billion USD even as it overtook Apple as the most valuable company again.

Other news, such as the German coalition talks reaching the final stage, will find little attention as reactions to the tariffs take centre stage. We are awaiting reactions from China to the increase of tariffs to 104%; this could be an increase in its own tariffs but also other measures. Japan and the EU will also either impose tariffs or negotiate in earnest now, and as stated, in the US, many political and business leaders will try to convince the administration to return to normal political behaviour.

Looking at the year-to-date numbers, no one can be happy with the current administration that was expected to be good for equities with tax cuts, fewer regulations, lower rates, and a supportive environment for crypto. The Nasdaq 100 is down 20% year-to-date, the S&P -17%, Apple -30%, Tesla -45%, Nvidia -28%, Bitcoin -17%, Oil -20%, while Gold is up 15% and Silver 4%. The Dax is now negative at -1%.

While at the current level, some equities may start to look attractive, markets are likely to be volatile and erratic. If you are looking to invest, manage the risks you take carefully.

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

Key points:

• 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.

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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