April 25, 2025

 

(SUMMARY OF JOHN’S APRIL 16, 2025, WEBINAR)

 

April 18, 2025

 

Hello everyone

 

TITLE – The Special Chaos Issue

 

PERFORMANCE

April +0.95 MTD

2025 year to date = +14.78%

Since inception = +766.33%

One year return = 75.65%

Average annualised return = 50.28%

 

PORTFOLIO REVIEW

Risk On

(COST) 4/$840-$850 call spread

(TSLA) 4/$160-$170 put spread

(NFLX) 4/$800-$810 call spread

(NVDA) 4/$70- $75 call spread

 

Risk Off

(MSTR) 4/$340-$350 put spread

(All expired in profit this week)

 

THE METHOD TO MY MADNESS

Trump announced worst-case scenario tariffs, tanking stocks and crypto, triggering the biggest tax increase in 85 years.

Trump then cracks, announcing a 90-day delay in trade tariffs forced by the imminent collapse of global financial markets, with possible exceptions for smartphones, computers, and chips.

All asset classes are dumped, presaging global economic crisis.

Bonds have worst week in 25 years, spiking yields by 60 basis points to 4.5%

Both inflation and unemployment are about to take off like a rocket.

Recession call is still on.

US Dollar has been pummelled.

Oil crashes.

 

THE GLOBAL ECONOMY – TURMOIL

Chinese tariffs raised to 145% this evening in a US retaliation to the retaliation.  China counters with 125%

Unemployment rises to 4.2%, a multi-year high – the March Nonfarm Payroll Report.

Nonfarm payrolls in March increased by 228,000 for the month, up from the revised 117,000 in February.

U.S. inflation expectations hit a 44-year high.

Consumer Price Index falls to 2.4% in March, a big drop from 2.8%.

Canadian Visitors fall 32%, in line with other forecasts of a collapse in international travel.

NFIB Business Optimism Index plunges.

JP Morgan raises recession risk to 79%

 

STOCKS – PANIC!

All Capital gains of the last 13 months were wiped out at market lows.

Chaos reigns supreme, with the (SPX) dropping 20% at the lows.

Volatility hits 16 16-year high at 62.

Hedge funds are still dumping technology stocks, as they still command big premiums to the main market.

Tech leads the downturn on every selloff.

All long-term technical indicators have rolled over, meaning that the bear market could continue until summer at the earliest and next year at the latest.

Delta Airlines collapses 50% on recession expectations and foreign travel fall off, pulls forward guidance.

2025 will be a down year for stocks.

Visa (V) buy any dips

Banks are good buys – PE multiples are in low teens.

 

BONDS – DEFAULT RISK

The Financial Crisis trade is still on, with 10-year US Treasury bonds hitting 4.6% yields.

Bonds suffer their worst sell-off in 25 years.

Foreign investors panic-sell, worried about US default or capital controls.

Collapse of the US dollar is pouring gasoline on the fire.

If countries can’t run trade surpluses with the US anymore, they don’t need to buy US bonds or dollars.

Bond Credit Quality is crashing as recessions lead to more defaults.

Junk bonds have fallen by $6.00 in a month, a massive move for this market, no doubt partially due to margin calls across all asset classes.

Avoid (TLT), (JNK), (NLY), (SLRN) and REITS

 

FOREIGN CURRENCIES – Dead Dumping

Shrinking international trade brings a shrinking demand for the US dollar.

US dollar declines as a reserve currency in the last quarter of 2024, while the percentage of actual dollars held as reserve ticked up, IMF data showed on Monday.

The Trump economy is forcing investors to flee all US assets, including stocks and currency.

Massive cash flight is running away from the US and into Europe and China.

Buy (FXA), (FXE), (FXB), (FXC), and (FXY)

 

ENERGY & COMMODITIES – CRASH!

Oil crashes down an amazing $13, or down 18% in a week, from $72 to $59.

High dividend-paying (XOM) has collapsed by 18%.

It is the sharpest fall in Texas tea prices since the 1919 Gulf War.

Recession fears are running rampant, and no one wants to pay for storage until a recovery, which may be years off.

Sell all energy rallies.

A global recession is looming large.

Avoid all energy plays like the plague.

 

PRECIOUS METALS – MELT UP

Gold hits a new all-time high, as the only flight to safety asset that is really working.  My target is $5,000.

Gold sees first $100 up day in history.

Q1 gold inflows hit three-year high, according to the World Gold Council.

Gold ETF’s saw an inflow of 226.5 metric tonnes worth $21.1 billion in the first quarter.

Central bank buying and Chinese savings demand continues unabated with China devaluing its currency.

Keep buying all (GLD) metal dips.

 

REAL ESTATE – GREEN SHOOTS SQUASHED

Existing home prices may rise due to the tariffs, as their replacement cost has just shot up enormously.

Lumber comes from Canada, and drywall and labour come from Mexico. A recession will also drive interest rates lower.

Mortgage rates rising back to 7.1% demolish any recovery.

Pending Home Sales rise, based on signed contracts. Pending home sales decreased 3.6% from a year earlier.

Homebuilder sentiment craters to a seven-month low in March as tariffs on imported materials raised construction costs.

 

TRADE SHEET – THE RECESSION TRADE

Stocks – sell rallies

Bonds – stand aside

Commodities – stand aside

Currencies – buy dips

Precious Metals – buy dips

Energy – stand aside

Volatility – sell over $50

Real Estate – stand aside

 

NEXT STRATEGY WEBINAR

12:00 EST Wednesday, April 30, 2025

From Incline Village, NV

 

 

Cheers

Jacquie