Archive
Hot Tips
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May 29, 2025
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Courts Toss Global Tariffs,
as we are not in a state of war, the basis on which the administration based its emergency actions. Where that leaves us is anyone’s guess, but stocks like it for 15 minutes, with the Dow up 550 points, which it quickly gave away. The Supreme Court will have to weigh in before we get a final decision. The Constitution clearly gives the power to impose taxes and tariffs to Congress, not the White House.
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Nvidia Comes in Line,
with both on sales and profits, taking the shares up $7. China is still a dead weight, with the administration's national security bans rendering $15 billion worth of inventory worthless. Despite earnings growth still on fire, the shares are unchanged YOY, which is what you get when everyone in the world already owns it. Buy (NVDA) on dips.
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Fed Minutes Come in Cautious,
with uncertainty running rampant and tariffs providing an inflationary push. No chance of an interest rate cut this year. The foreboding outlook has likely shifted since then, following the decision just a week after the meeting to postpone the severe import tariffs, including a 145% levy on goods from China, that had forced up bond yields, driven down stock prices, and led to widening predictions of a U.S. economic downturn.
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Pending Home Sales Hit Three-Year Low,
6.3% in April to 71.3% on a signed contract basis. The decline in pending sales suggests the resale market will continue to struggle until prices come off their record levels and mortgage rates settle closer to 6%.
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Best Buy Cuts Earnings Outlook due to Chinese Tariffs.
Best Buy has already increased prices on some items to blunt the costs from tariffs, with changes taking effect by mid-May. The company said price hikes are the very last resort, after it took other steps to offset higher expenses. Expect this to be a recurring story across the retail space. Avoid (BBY).
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May 28, 2025
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Home Prices are Still Rising,
according to the S&P Case Shiller National Home Price Index in March, up 3.4%. It was the first month-to-month decline since the pandemic. New York City leads with an 8.0% gain because of back-to-the-office orders. Chicago followed with a 6.5% increase and Cleveland with a 5.9% gain. Hurricane hit Tampa is still the only loser with a 2.2% loss.
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Tesla Sales Still in Free Fall,
with Europe down 49% in April versus an overall 31% decline for EVs in general. There is a ferocious price war in China. European consumers are also showing a preference for hybrid electric vehicles — cars with a small battery that still mainly run on traditional fuel. Hybrid electric vehicles account for just over 35% of the total European car market.
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US Capital Goods Orders are Collapsing,
down 1.3% in April amid mounting uncertainty over the economy because of tariffs. That suggests business spending on equipment weakened at the start of the second quarter. The report from the Commerce Department on Tuesday also showed shipments of these goods falling last month. The government's flip-flopping on import duties was making it difficult for businesses to plan ahead. That has been evident in the deterioration in sentiment among businesses.
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Gold imports to Switzerland from the US jumped to 13 Year High,
in April, after the exclusion of precious metals from U.S. import tariffs, Swiss customs data showed on Tuesday. Switzerland, the world's biggest bullion refining and transit hub, and Britain, home to the world's largest over-the-counter gold trading hub, registered massive outflows to the U.S. over December-March as traders sought to hedge against the possibility of broad U.S. tariffs hitting bullion imports.
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Japanese Interest Rates are Soaring,
part of a worldwide trend, with ultra-long 40-year bond yields hitting 3.675%. Heavily indebted Japanese government bonds are the "canary in the global duration coalmine." Long-dated debt has sold off on concerns that tax cuts and a chaotic roll-out of sweeping tariffs by the U.S. will stoke inflation and impel governments to spend more.
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May 27, 2025
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MicroStrategy Issued $2 billion in Preferred Stock,
yielding a 10% dividend, which it will use to buy more Bitcoin. The shares fell by 7.5%, even though the dilution of existing shareholders is only 2%. I get back to my argument that even though total Bitcoin issuance is limited to 21 million coins by 2040, there is no limit on Bitcoin derivatives.
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Global Shipping Rates are Soaring,
as a result of the on-again, off-again trade war. Port congestion is worsening at key gateways in northern Europe, with waiting times for berth space increasing significantly in Bremerhaven, Antwerp, and Hamburg due to labor shortages and low water levels on the Rhine River. The congestion is also affecting other hubs, including Shenzhen, Los Angeles, and New York, and is expected to continue for several weeks, with shipping lines facing delays and higher costs that may require freight rate hikes. Waiting times for berth space jumped 77% in Bremerhaven, Germany, between late March and mid-May.
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The 60/40 Portfolio is Dead for Now,
with both stocks and bonds going down at the same time. This isn’t supposed to happen. Bonds usually rise going into a recession. But foreign boycotts of new US bond issues and the “Sell America” trade have taken the (TLT) down from $94 to $83 this year, a loss of 11.7%. In the meantime, stocks have gone nowhere this year.
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The Shale Oil Boom is Over,
due to tax-subsidized US overproduction, weak Chinese consumption, and recession fears. As a result, oil companies are scaling back capital investment. Texas, Oklahoma, and Louisiana will get hit the hardest.
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US Steel (X) Takeover Goes Through,
at $55 a share, with Nippon Steel investing $14 billion of investment over the next 14 months to modernize antiquated technology. U.S. Steel's headquarters will remain in Pittsburgh, the president said. U.S. Steel shares were up more than 1% on Tuesday. Going into a recession, and with tariffs demolishing the auto industry, steel is not a business you want to be in right now.
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May 23, 2025
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Trump Threatens 25% Tariff Against Apple,
unless the company builds an iPhone in the US, which can’t be done. The shares dropped 5% on the news. A further 50% tariffs were threatened for Europe because of the lack of progress with negotiations there. Stocks dumped 400 points at the opening. Another day, another trade war. Maintain your (AAPL) short.
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US Dollar Hits Two-Year Low,
as the “Sell America” trade continues. It’s almost unprecedented for a currency to fall when its interest rates rise. Debt, default, and trade wars are now the larger concern. Keep buying dips in (FXE), (FXA), (FXB), and (FXY).
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Administration Pushes US Nuclear Industry,
which had been slowed by safety regulations under previous administrations. An all-electric economy with AI is going to need a 400% increase in the electric power grid. Buy Cameco and Vistra Energy on dips, past Mad Hedge recommendations.
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New Home Sales Hit Three-Year High,
up 10.9%, but rising mortgage rates and economic uncertainty remained headwinds for the housing market. Builders are definitely trying to unload inventory ahead of a recession. Data for February and March was revised significantly down, taking some of the shine from the unexpected increase in sales last month. New homes are now cheaper than existing ones.
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Yes, Tom Cruise Really did Get to Borrow a US Aircraft Carrier,
the USS George W. Bush, for his latest movie, The Final Reckoning. The Pentagon reviews scripts for accuracy and depiction of the military, and charges for equipment use and personnel support, but in this case, the carrier and crew were already on scheduled training missions, so no reimbursement was required. The crew spent three days in the Adriatic Sea filming aboard a nuclear-powered Nimitz-class carrier commissioned in 2009. All of the Top Gun movies have led to a massive surge in Navy recruiting, although few qualify.
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May 22, 2025
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The Bond Vigilantes are Back,
and are not to be taken lightly, as seen by yesterday’s failed auction of 20 US Treasury bonds. The last time they were this upset, they took ten-year US Treasury bill yields up to 16%, causing a three-year-long recession. Stocks fell by 30% from already very low lows. The 20% inflation rate then was caused by an oil shock and a collapsing US dollar, not tariffs. Don’t kid yourself, this can’t happen again.
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Walmart is Planning Mass Layoffs,
some 1,500 jobs, as demanded by the high prices brought by the trade war. Walmart is the largest U.S. private employer with about 1.6 million employees. It employs about 2.1 million employees worldwide, according to its website. It is also the country's biggest importer with about 60% of its imports, mainly items such as clothing, electronics, and toys, from China.
The company had last week said it would raise prices for some products by the end of May as President Donald Trump's trade war hits its supply chain and increases expenses.
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Existing Homes Sales Hit 16-Year Low,
down 0.5% to 4 million units. Inventory jumped 9% MOM and 21% YOY. That is a 4.4-month supply, a five-year high. The median home price is at $414,000, up 1.8% YOY. First-time buyers accounted for 30% of the sales. Homes over $1 million are doing better, up 6% YOY. The cancellation rate doubled, due to the stock market crash.
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Weekly Jobless are Unchanged,
down only 2,000 to a seasonally adjusted 227,000 for the week ended May 17. They expect claims in the coming weeks to drift into the upper end of their 205,000-243,000 range for this year, mostly driven by difficulties adjusting the data for seasonal fluctuations. Economists, however, see layoffs picking up in the second half of 2025 as the administration's tariffs dampen demand, snarl supply chains, and stoke inflation.
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Sushi Deflation is Here!
New York City is a global capital for high-end sushi, home to some of the most sought-after omakase experiences outside of Japan at $1,000 a plate, with chefs like Keiji Nakazawa of Sushi Sho and Tadashi Yoshida of Yoshino. Now, there is a new consciousness that comes amid uncertainty around the tariff-related price of imported Japanese fish. Japanese seafood vendors have recently increased prices from 10% to 15%. One restaurant has responded with smaller discount meals, where $58 gets you 13 courses. That’s about what it costs in Tokyo. The owners are hoping to make up the profit loss with higher volume.
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