President Trump has indicated that he will lower the tariffs on Chinese goods, after acknowledging that the current trade war between the world’s two largest economies cannot last.
Trump has said the tariff won’t be 0, but it won’t be anything like 145 per cent.
The IMF has forecast a significant slowdown in global growth due to Trump’s tariffs and has slashed its US growth forecast from 2.7 per cent to 1.8 per cent, due partly to the tariff program.
The IMF has also cut Australia’s 2025 growth forecast from 2.1 per cent to 1.6 per cent, a cost to the economy of about $13 billion.
IMF chief economist Pierre Olivier Gourinchas said the fund was not forecasting a US recession because the US economy was “coming from a position of strength.”
That position of strength will be a needed buffer over the next couple of years.
HEADLINE CORNER
American consumers and companies are likely to be the biggest tariff victims.
Travellers are avoiding the US.
Airlines see steep declines in travel to and from America.
GOLD UPDATE
You will see that gold has dropped from its record high of $3,500 yesterday.
I’m watching the price action closely, and if gold falls $400 from its peak – breaks $3100 - and you are short-term to medium-term focused, I suggest you close some gold trades/stocks.
If you are long - term focused, hold.
I will be able to give you a better update next week after I see more price action this week.
BITCOIN UPDATE
Bitcoin is $93k+ as I write this, and I am expecting it to keep rallying, as it appears to have made a bottom.
When the US stock market was tanking on Monday, Bitcoin was quietly rising and has continued to gain ground.
Gerry O’Shea, Head of Global Market Insights at Hashdex, comments that more “investors seem comfortable with the view that Bitcoin is a form of ‘digital gold’ that can perform independently from equities and act as a risk-off asset during periods of uncertainty.”
Hold your position in Bitcoin and your options/stock on (MSTR) and (IBIT).
S&P500 UPDATE
The index rallied yesterday, and futures are up strongly this evening.The index may rally for the short term. ($4800 - $5500/$5700) Expect wide ranging pattern behaviour.However, I don’t believe we have seen the bottom yet.So, don’t get complacent that all is now rosy in the world.
When we do see the bottom, it will be the buying opportunity of the century.
QI CORNER
SOMETHING TO THINK ABOUT
WELL-BEING CORNER
A wallaby in my backyard enjoying a grassy patch in the sunshine.
Earnings:Schlumberger, Phillips 66, Charter Communications, Colgate-Palmolive, Centene, AbbVie, Abbott Laboratories.
A Bunker Worthy Stock
One company that we might be able to hide away from all the angst in the world now is Netflix (NFLX). Its business is booming and appears well-protected from any economic headwinds.
It has a goal of reaching $1 trillion in market capitalization by 2030, and that seems reasonable.It looks like the streaming giant is poised to benefit whether the U.S. goes into recession.
Netflix’s earnings were better than expected.It has a market cap of $416.2 billion, based on FactSet.
The company expects to double its advertising revenue growth in 2025 after it launched its advertising-backed service in the U.S. on April 1.The second quarter will see an international build-up.
Even with the price increases in the U.S., Netflix has not reported any downgrades or defections, and that is certainly a sign of strength and resilience.
Many analysts, including Oppenheimer and Pivotal Research, have price targets of $1,200 or even $1,450.
Netflix (NFLX) $973.03 – April 17, 2025
In the chart above, you can see a clear flag pattern has formed.Additionally, you can also notice there is a clear divergence as shown on the MACD. Plus, we see that the stock has come down to test the 200-day MA, (not quite reaching it) and bounced strongly.
The Jumpy Bond Market
I don’t care what side of the political fence you sit on, a bond market under pressure commands attention.
Trump wants Powell to lower interest rates, but Powell has made it clear that the Fed would put US interest rates on hold until the impact of Trump’s trade policies became clearer.When that happens, Powell might be forced to choose between prioritising fighting higher inflation or rising unemployment in a slowing economy.
Trump is under the belief that he can oust the Fed Governor.But any attempt to sack Powell would surely set off a backlash from financial markets because it would damage the Fed’s credibility as an independent, non-political central bank.
Were the White House to exert influence over the Fed, the implications would most probably be that US monetary policies would become more stimulative and inflationary, and the US economic cycle more volatile.
And then think about what would happen to the US bond market and the dollar.The US dollar, as the world’s reserve currency, and the haven of the US bond market, could both be at risk from Trump’s attacks on Powell and his trade war on everyone.
Trump’s policymaking is erratic and has induced enormous day-to-day volatility within financial markets.The markets are, on any day, at risk of another downward spiral in response to an unexpected Trump social media post.
Dollar weakness shows a wave of funds leaving the US to what are believed to be more stable jurisdictions such as Japan, Germany, and Switzerland.
If that dollar depreciation and capital flight were sustained, they would have implications for the US government’s massive refinancing tasks this year.
MARKET UPDATE
S&P500
The index is showing a choppy pattern behaviour.Volatility will be with us for a while.In the short term there is scope for more weakness back toward the base = part of larger period of ranging.
Resistance: 5345/5485/5525
Support: 5210/5150/4800/35 area
GOLD
Gold just keeps making new highs, reaching $3358 on April 17th.Market is overbought, but still no evidence in the patterns that a top is forming yet.Bias is therefore to the upside.
Resistance: $3357/$3396/$3420
Support: $3281/$3242/$3165
BITCOIN
We will be beset with more ranging behaviour over the near term as part of the larger bottoming, and with eventual gains above that Jan. peak at 109~ thereafter.
As I have already suggested, there is still some scope for a retest or even a slight break of the April 7th low at 74.4k, before the larger upside is seen.(My research is saying we could go as low as 67k).
Resistance: 85.8/86.3/92/93k(If we can close & hold above 86, we may have seen the low).
The global economic landscape is being reshaped as we speak.There are now heightened concerns about economic growth, currency stability, and financial retaliation.We need to consider China’s potential response via US Treasury yields and other retaliatory measures.
On April 2, 2025, President Trump signed Executive Order 14257, imposing a 34% tariff on Chinese imports, pushing total levies above 70% for some goods.China retaliation on April 4 with a matching 34% tariff on US imports, plus rare earth export curbs.This is reminiscent of the 2018 trade war.
The US aims to boost manufacturing and cut reliance on China, whose share of US imports fell from 21% in 2018 to 14% in 2023.Yet, higher tariffs will likely raise consumer prices for electronics and machinery.The US-China Business Council estimates that revoking China’s trade status could cost 744,000 jobs. With a $36.2 trillion national debt, the US faces refinancing challenges in 2025 as Treasury yields rise, a vulnerability China could exploit.
The US faces a delicate moment in its fiscal policy.With national debt exceeding $36.2 trillion, the Treasury is set to refinance substantial portions in 2025 amid rising yields.The 10-year Treasury yield has surged recently, reflecting market unease over tariffs and inflation expectations.If China leverages its $1.11 trillion in US Treasury holdings, it could exacerbate this pressure.
China’s economy, slowed by post-COVID recovery and property debt, faces a tariff hit.The Economist Intelligence Unit predicts as 20% US tariff increase could cut GDP growth by 0.6 points through 2027, with a 60% tariff costing 2.5 points.Exports to the US (2.9% of GDP in 2023) remain key.China plans a 6.9 trillion-yuan stimulus and rate cuts to hit a 5% growth target, but success is uncertain amid trade disruptions.
The yuan has weakened to its lowest since September 2023, with the People’s Bank of China (PBOC) seemingly willing to let it go lower.A weaker yuan could offset tariffs by cheapening exports, potentially sliding to 7.7 to 7.8 if tensions rise.However, this risks capital outflows and higher import costs, as well as global ripple effects from a broader monetary breakdown.
Alongside the changed economic environments, China holds several strategic tools for retaliation against the US.
China holds $1.11 trillion in US Treasuries and could sell or halt purchases to spike yields, raising US borrowing costs as $6 trillion in debt matures in 2025-2026.This is China’s primary trade war weapon.
It dominates the global rare earth supply chain – critical to military and high-tech industries – supplying roughly 72 per cent of US rare earth imports, by some estimates.
On March 4, China placed 15 American entities on its export control list, followed by another 12 on April 9.Many were US defence contractors or high-tech firms reliant on rare earth elements for their products.
Export restrictions on rare earths could further pressure US tech and defence sectors, though escalation risks backlash.
China also retains the ability to target key US agricultural export sectors such as poultry and soybeans – industries heavily dependent on Chinese demand and concentrated in Republican-leaning states.China accounts for about half of US soybean exports and nearly 10 per cent of American poultry exports.On March 4, Beijing revoked import approvals for three major US soybean exporters.
And on the tech side, many US companies – such as Apple and Tesla – remain deeply tied to Chinese manufacturing.Tariffs threaten to shrink their profit margins significantly, something Beijing believes can be used as a source of leverage against the Trump administration.Already, Beijing is reportedly planning to strike back through regulatory pressure on US companies operating in China.
Let’s not forget the position that Elon Musk holds.As we understand it, he is a senior Trump insider who has clashed with US trade adviser Peter Navarro against tariffs.Furthermore, we know he has major business interests in China.These facts could be a strong wedge that Beijing could exploit to divide the Trump administration.
As I pointed out last week in my Post on Friday (WHO’S IN CONTROL – TRUMP OR XI?) the changing dynamics could significantly reshape the geopolitical landscape of East Asia, bringing together countries to take advantage of a strategic opportunity to displace American hegemony.
Southeast Asian countries could see a strengthened alliance and an “all-round cooperation”, which offers an opportunity to directly erode US sway in the Indo-Pacific.
A promising strategic opportunity is building in Europe too, with the European Union contemplating strengthening its own previously strained trade ties with China.Both sides have jointly condemned US trade protectionism and advocated for free and open trade. EU and Chinese officials are holding talks over existing trade barriers and considering a full-fledged summit in China in July.
China is watching the US dollar.It sees in Trump’s tariff policy a potential weakening of the international standing of the US dollar.Widespread tariffs imposed on multiple countries have shaken investor confidence in the US economy, contributing to a decline in the dollar’s value.
Traditionally, the dollar and US Treasury bonds have been viewed as haven assets, but recent market turmoil has cast doubt on that status.At the same time, steep tariffs have raised concerns about the health of the US economy and the sustainability of its debt, undermining trust in both the dollar and US Treasurys.
The tariff standoff between the US and China is more than a trade dispute, it may well reveal a world at a historic inflection point, where economic strategies and asset choices will define the next decade.For the US, higher costs and refinancing woes loom; for China, growth hangs in the balance, with yuan depreciation a risky but viable counter.
China’s potential to sway US Treasury yields adds a financial warfare dimension – a weapon that should not be taken lightly.It has the tools to inflict meaningful damage on US interests.Perhaps, more significantly, we need to understand that Trump’s all-out trade war is providing China with a rare and unprecedented strategic opportunity that could forever change the economic landscape.
Earnings:Netflix, Truist Financial, State Street, American Express, Snap-On, KeyCorp, Fifth Third Bancorp, Regions Financial, United Health Group, Charles Schwab, Huntington Bancshares, D.R. Horton, Marsh & McLennan Cos.
Friday, April 18
NYSE closed for Good Friday holiday.
Volatility – Make It Thy Friend
Are you enjoying The Ride?
Volatility is expected to continue into this week.
Uncertainty is the dark cloud hanging over the world due to the Trump administration’s constant policy backflips and sidesteps over trade tariffs – from day to day we are uncertain which countries are exempt, or pay a lower tariff, which goods are exempt and how long the pause will be on tariffs and how long tariffs will be enforced.
It's all very chaotic and leaves companies completely undone in trying to understand their position in relation to earnings in the future.
It’s futile currently; there is no firm ground anywhere.
But this volatility can create valuable opportunities.
Stocks are on sale.And the markdowns will be here for a while – but not forever.
The latest change to Trump’s trade tariffs circles around electronics imported from China – iPhones, computers, and computer chips have been temporarily exempted from tariffs.We don’t know how long this will last.But tech stocks are expected to surge when the market opens on Monday.
It's interesting to note the resilience of Bitcoin, which has held up remarkably well during the tumultuous movements that have taken place on global markets. It’s now being seen as a hedge and a distinct asset class.
MARKET UPDATE
S&P500
The index has bounced nicely from the April 7 low at 4835.Though this market is obviously oversold, there is still no evidence of even a shorter-term low in place.And this suggests weakness back toward the 4800-support area.
Resistance:$5480/$5595
Support:$5110/$4915
GOLD
Gold has rallied to another all-time high, reaching $3245.There is no confirmation of a top yet, but the market is certainly overbought, raising risk.
Resistance:$3240
Support: $$3160/$3100/$2975
BITCOIN
Bitcoin did push down into the low $70’s before quickly bouncing.Eventual new highs are favoured.Basing takes time and even though we have seen a nice move up, there is still a risk more basing will take place, and we may even see a slight new low before a more significant upside is seen.
Resistance: $85.3/$85.8 (If we can close above these levels – a final low may be in place).
Further resistance levels above include $ 88.6/$ 88.6/$92.1
Support:$79.5/$74.4/$73.3
HISTORY CORNER
On April 14
SOMETHING TO THINK ABOUT
Mohamed El-Erian expresses the notion that Economic and Market Stability Hinges on These Questions
Are the “wins” from gaining concessions from the more than 70 countries eager to negotiate with the US sufficient to calm markets and restore the economy’s footing?
Are there pathways to constructive negotiations between China and the US that do not involve a significant loss of face for either party?
Can the administration and the Fed signal the existence of credible bazooka-style circuit breakers that would be quickly activated with limited collateral damage should financial markets malfunction?
How much patience will holders of American assets, particularly foreign holders, have in the face of the threat of Chinese selling?
How much of the damage to America’s global standing and reputation is already too close to the line that separates worrisome from irreversible?
How hard is it to persuade US households and companies to maintain their spending during such a time of heightened uncertainty?
How quickly can the US counter China’s stepped-up efforts to present itself to other countries as a responsible and dependable partner for trade, technology, institutional collaboration, and, eventually, a collective payments system?
American policymakers need satisfactory answers to these questions if they are to successfully navigate the Trump administration on its desired path.
Trump’s goals –
Fairer trading system
More enabled private sector
A slimmed down and more efficient public system
A more favourable debt dynamic
“The stock market is the only market where things go on sale and all the customers run out of the store.”
Tariffs will spur inflation, and then slow growth.It is very doubtful that the Fed will come to the rescue.
Morgan Stanley sees gross domestic product growth almost coming to a complete standstill and core inflation ending the year well above the central bank’s 2% target.The Fed, then, is very likely to sit on its hands and maintain its holding pattern on interest rates.
Last week, Fed Chair Jerome Powell said he expects policymakers to “wait for greater clarity” on trade policy ramifications before adjusting any further.The Fed currently targets its key overnight lending rate in a range between 4.25% and 4.5%, where it has been since December.
In a stagflation scenario of high inflation and slow growth, Morgan Stanley expects the Fed to lean toward controlling inflation rather than boosting growth.And that means, probably no rate cuts in 2025 and not one until March 2026.The investment bank then sees several cuts throughout next year.However, a recession could change that and bring forward rate cuts.
Below is a chart of the S&P 500.I show the Fib. Retracements.I have already expressed the view that the S&P500 could fall as far down as 4500, and I still see the possibility of that move happening.It may find a base between 4600 and 4500.I also show the support level with the horizontal line which marks the 4400 level.This support level should hold.
Trump’s steeper “reciprocal” tariffs are set to go into effect at midnight and are in addition to the 10% baseline tariff that took effect Saturday.A 104% tariff rate on Chinese imports is among those the U.S. will impose.
China has said that it will continue to take ‘resolute and forceful’ countermeasures as U.S. tariffs kick in. And China has wasted no time.Just this evening the country has slapped 84% tariffs on the U.S.
With Trump seeking to rebalance global trade, a byproduct of that will be capital outflows from the U.S.
U.S. exceptionalism is not shining now – financial markets are suffering.
QI CORNER
Jeffrey Gundlach is speaking here on CNBC about the market turmoil.Worth a listen.
11:00 a.m. New York Federal Reserve Bank President and CEO John Williams speaks on Economic Outlook and Monetary Policy, Puerto Rico.
Earnings:Morgan Stanley, Wells Fargo, JPMorgan Chase, Fastenal, The Bank of New York Mellon, BlackRock.
Wednesday’s tariff announcement started The Ride.We have gone from free trade and globalization to tariffs and a trade war in the blink of an eye.It will make everything more expensive for the U.S. consumer.Wallets will close, growth will slow, and unemployment will rise. Welcome to stagflation!
Extreme volatility across financial markets saw US equities swing fiercely lower on the rollercoaster.A retaliatory response from China has already appeared.The US dollar also experienced dramatic swings with a pattern of initial weakness followed by significant strengthening into the weekend.
Volatility is likely to carry into this week with countries preparing their response to the proposed tariffs.The US stock market may find a bottom this week and attempt to recover from its sharpest decline since 2020.
Around $110 billion was wiped off Australia’s share market on Monday.It is possible we will get several rate cuts this year to attempt to patch the economic damage.
The next three-five years will be messy in the markets, but cycles suggest we should see the start of a new bull market by 2030.It is at this time when we should see the start of a commodity super cycle.
During the next five years, the greatest threat to the economy is the weather cycle.We could see droughts/floods causing food shortages, with prices skyrocketing, which is likely to drive up inflation and see impacts worldwide.
MARKET UPDATE
S&P500 – the index has been belted and has fallen to a low (Monday, my time) of $4801.04 in the futures market thus far, (which is the area I indicated where the market would target $4700-$4800). It gapped down from the Friday close of $5074 with strong selling pressure.It is also likely the retail investor is selling (at a loss) the stocks they bought last week, which is adding to the bearish momentum.There is a possibility for further market falls (to around $4500 max) when the US market opens, (because of forced liquidations from traders who were bullish), however, I do expect $4400 to hold.
Margin calls and forced liquidations set up great opportunities – and now is one of those times. The market is oversold and now has the potential for a 7-8% snapback.I would start viewing the market here as a great opportunity to buy.You could consider call options on the S&P500, a call spread on the SPX.If you want to be conservative set in-the-money call spreads, and if you are aggressive, you can enter out-of-the-money call spreads.You could also look at selling deep out-of-the-money puts.
But, be warned, volatility is at its highest, so everyone needs to expect wild swings.Keep your trades at a manageable size.You are not looking for a home run in every trade.Making 50% often will eventually build a moat around your castle.
Resistance:$4970/$5080/$5400/$5660
Support: $4800/$4660/85
GOLD
Gold rallied to another high last week reaching $3168.As I have been warning, a top is near and could be starting to form now. We need a fall in gold of around $250 over the next few months to confirm that a medium-term high is in place. Until then expect the rally in gold to continue, but maybe with a slowing momentum.The downside move could last a few months.
Resistance: $3045/55/$3085/95 and $3160/70
Support: #3010/$3020 and $2965/75
BITCOIN
Bitcoin was the only sector that ended last Friday in + territory.I anticipate that crypto will continue its messy bottoming pattern in the near term with eventual gains above the $109 former peak.As per last week, there remains scope for a fall toward the low 70’s or the high 60’s before a solid low is found.On Monday morning (my time) Bitcoin gapped down to around $77k.We may get a tradable low soon.
Resistance:88/93.5k
Support:73.5/75
QI CORNER
HISTORY CORNER
On April 7
SOMETHING TO THINK ABOUT
Thank you to all those who attended my Jacquie’s Post March Zoom Meeting last Friday.
As promised, I include a link here to the interview between Scaramucci and Simon Hunt.Ten minutes of this interview were included in the monthly meeting presentation.
$700 billion tax increase starts today – the biggest in 85 years.The depressing effects on the economy will be immense.
The US economy is now in recession.How long it will last, nobody knows.
Interest rate plays like bonds are back in favour as recession fears drive rates down.
Gold hits new highs on a major upside breakout.
US dollar enters free fall with declining rates cutting it off at the knees.
Big technology was the most expensive and saw the biggest falls.
Energy gets a rare rally after hitting four-year lows.
Cash is king - $1 at the market top is worth $10 at the bottom.
THE GLOBAL ECONOMY – DYING ON THE VINE
Stagflation Accelerates, with a hot 0.4% increase in the Consumer Price Index and a tepid 0.1% increase in Consumer Spending, the worst since the Pandemic.One year inflation expectations have shot up to 5.0%
Fed leaves interest rates unchanged at 4.25%, cuts quantitative tightening from $25 billion a month to $5 billion a month, to head off a coming recession.
US GDP grows 2.4%, during the October-December quarter.These may be the last positive numbers we see for a while as the country heads into recession.
Equipment rentals fall 7% in February.
Consumer Confidence Plunges, by the most in five years.
Weekly Jobless Claims Rise 2,000 to 223,000.
UCLA Anderson School of Business Announces, “Recession Watch,” the first ever issued.
STOCKS – SELL ALL RALLIES
Stocks are oversold so expect a 3%-5% rally.
But sell on any rally as much lower lows beckon.
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.
Hedge Funds are still dumping technology stocks as they still command big premiums to the main market.
Vaccine stocks get nailed, as the FDA moves to eliminate the vaccine establishment.
Travel demand is collapsing as consumer rush to cut back discretionary spending.
This has been one of the most rapid corrections in history.
The Volatility Index peaked at $25, this time but there are higher highs to come.
Tesla's brand has been damaged.Nobody buys cars in recessions.
THE ULTIMATE HEDGE – Defensive stocks only go down at a slower rate.
90-day US Treasury Bills (Warren Buffet owns $300 billion)
Government Guaranteed principal
Endless liquidity – trade like water
100% collateral value for margin
Lock in guaranteed income
Can be sold at any time to earn full interest
Will survive any bear market
Ask your broker how to buy
THE WORST-CASE SCENARIOS
The Bull Case
We are now in a recession that will probably cost us -6% - 7% over 2-3 quarters and then ends with a renewal of a $5 trillion tax cut for 2026 (SPY) down 20%-30%, (SPY) multiple drips from 22X to 19X last seen in 2018.
OR
THE BEAR CASE
No tax cut means we enter a depression and lose 25% of GDP over four years.(SPY) down 60% if (SPY) PE falls from 22X to 9X, 240% of stock gains since 2009 have been multiple expansion.
BONDS – RECESSION BOOST
Bonds rocket with a stock market crash prompting a run into safe assets.
Moody’s downgrades the United States, saying Trump’s trade tariffs could hamper the country’s ability to cope with a growing debt pile and higher interest rates.Recession risks are rising.
Rising recession risks put bonds back in the spotlight.
During the pandemic recession, the (TLT) rose to $165.
Shocking CPI at 5.0% annualized gives bonds a boost.
It means that the next Fed move will be a raise, not a cut.
Buy (TLT), (JNK), (NLY), (SLRN) and REITS on dips.
FOREIGN CURRENCIES – DEAD DOLLAR
Prospect of falling interest rates is demolishing the US dollar.
Yen carry-trade unwind sends Japanese currency soaring.
Expected interest rate differentials are the principal foreign currency driver.
Recession fears are bringing forward Fed interest rate cuts.
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 – RARE RALLY
Trump threatens a 25% tariff against anyone who buys Russian oil, same with Venezuela.
That gives oil a rare rally to sell into.
US Drillers cut back on new rigs as the country is glutted with over-production, according to Baker Hughes data out today.Recession fears are the gasoline on the fire.Unemployment will rise in the oil-producing states.
Copper hits a new all-time high at $5.02 a pound.The red metal has outperformed gold by 25% to 15% YTD.
The Oil market is in turmoil, with crude prices bouncing off a four-year low.
A global recession is looming large.
PRECIOUS METALS – NEW HIGH
Gold is over-extended and due for a correction.
But long-term targets are getting raised across the board.
No upside resistance above $3,200 - setting up a possible melt-up.
Falling interest rates have given gold a new lease on life.
Gold Stocks in Comex Warehouses hit record highs, due to the risk of import tariffs curtailing shipments to the United States from other countries.
Will import duties divide the gold market into American and foreign gold?
REAL ESTATE – GREEN SHOOTS?
US Mortgage Rates Drop to 6.65% for 30-year fixed-rate loans.Recession fears have driven interest rates from over 7.30% down a full 10.65%.Recession fears have been driving rates down.
Pending Home Sales Rise, based on signed contracts.
Pending Home Sales decreased 3.6% from a year earlier.
US Home Sales rise, but the stocks still look awful, increasing 1.8% to 676,000 units last month.The sales pace for January was revised up to a rate of 664,000 units from the previously reported 657,000 units.
Homebuilder Sentiment craters to a seven-month low in March as tariffs on imported materials raised construction costs.
Existing Home Sales Jumped in February with a decent push from falling interest rates, increasing 4.2% from the annual rate of 4.26 million.
TRADE SHEET – THE RECESSION TRADE
Stocks – sell rallies
Bonds – buy dips
Commodities – stand aside
Currencies – buy dips
Precious Metals – buy dips
Energy – stand aside
Volatility – sell over $30.
Real Estate – stand aside
NEXT STRATEGY WEBINAR
12:00 EST Wednesday, April 16, 2025, from Incline Village, NV.
A brand-new updated Model Y is expected to arrive in Australia within weeks.
Is there a sense of excitement about this event?
I don’t think so.
Rather, there is a rising angry sentiment toward Elon Musk and his political movements.
We now see evidence of customer wrath as Tesla car yards are packed with current old stock that nobody wants. In addition to full car yards, there have been violent attacks on dealerships, cars set on fire, and mass demonstrations around the world.
The Tesla car has lost value, and customers aren’t coming back to buy again.
One Tesla Cyber truck owner has taken things a step further, putting the badge of rival electric vehicle maker Rivian RIVN on his electric truck.
People, who are selling stickers through Etsy, which show their discontent with Musk’s politics are making a fortune.Instead of selling their Tesla, customers are revealing their stance through stickers placed on their cars.
But many have sold their cars.
Celebrities who have ditched their Teslas
Arizonia Democrat, Sen. Mark Kelly.
Jason Bateman, who said, “owning a Tesla felt like driving around with a Trump sticker on the car.”
Sheryl Crow, who donated the money from the sale of her Tesla to NPR, which Musk has criticized and called to defund.NPR says it receives less than 1% of its funding directly from the federal government.
Joanne Wilson, and her venture capitalist husband, Fred Wilson, sold their Teslas in protest of Musk’s actions at DOGE.
In contrast, President Trump has bought two Teslas.
Tesla is facing more competition
Aside from the anger directed at the Tesla brand, which is facing falling sales, there is also increased competition from rival EV brands, such as BYD, which are showing rising sales and are equally techy and much more affordable.
Despite this competition, some analysts are still looking at Tesla as a stock to buy
Elon Musk needs to choose.Where does his loyalty really lie – is it with Tesla or with his political ambitions?
Please Note:This Post is not a recommendation to buy Tesla at this time.
What’s a better AI play than Nvidia?
Think Alibaba.
Many analysts believe shares in Alibaba are still very undervalued, even though the Chinese e-commerce platform has soared more than 56% in 2025.
Other reasons…
Chinese consumers are now spending again.
And Artificial Intelligence is an underappreciated growth driver for this technology giant.
The stock also boasts a healthy balance sheet.
While it does have some debt, the $235 billion company only holds around $28.8 billion in borrowings, and it has nearly twice that amount in cash and liquid assets.In addition, it has generated $14.5 billion worth of free cash flow in the past year.
We also may see an Alipay kind of announcement sometime this year.
If you’re interested in the Chinese market and AI, it’s a good time to scale into Alibaba here, as it has pulled back nicely.
(APRIL IS HERE - WHEN THE TARIFF UNCERTAINTY MAY BECOME A KNOWN CERTAINTY)
March 31, 2025
Hello everyone
WEEK AHEAD CALENDAR
MONDAY, MARCH 31
9:45 a.m. Chicago PMI (March)
10:00 a.m. Dallas Fed Index (March)
7:30 p.m. Japan Unemployment Rate
Previous: 2.5%
Forecast: 2.5%
TUESDAY, APRIL 1
12:30 a.m. Australia Rate Decision
Previous: 4.1%
Forecast: 4.1%
9:45 a.m. S&P PMI Manufacturing final (March)
10:00 a.m. Construction Spending (February)
10:00 a.m. ISM Manufacturing (March)
10:00 a.m. JOLTS Job Openings (February)
WEDNESDAY, APRIL 2
8:15 a.m. ADP Employment Survey (March)
10:00 a.m. Durable Orders final (February)
10:00 a.m. Factory Orders (February)
10:00 a.m. New York Federal Reserve Bank
Deputy SOMA Manager Julie Remache speaks at a seminar in Monetary and Fiscal Policy at Vanderbilt University, Nashville.
8:30 p.m. Australia Trade Balance
Previous: A$5.6B
Forecast: A$5.6B
THURSDAY, APRIL 3
8:30 a.m. Continuing Jobless Claims (03/22)
8:30 a.m. Initial Claims (03/29)
8:30 a.m. Trade Balance (February)
9:45 a.m. PMI Composite final (March)
9:45 a.m. S&PPMI Services final (March)
10:00 a.m. ISM Services PMI (March)
FRIDAY, APRIL 4
8:30 a.m. Hourly Earnings preliminary (March)
8:30 a.m. Average Workweek preliminary (March)
8:30 a.m. Manufacturing Payrolls (March)
8;30 a.m. Nonfarm Payrolls (March)
Previous: 151k
Forecast: 128k
8:30 a.m. Participation Rate (March)
8:30 a.m. Private Nonfarm Payrolls (March)
8:30 a.m. Unemployment Rate (March)
9:00 a.m. New York Federal Reserve Bank
Director of Research Kartik Athreya speaks at the 2025 New York Fed Innovation Conference, New York.
April is tariff month, I think, unless President Trump changes his mind.
The stock market is on tenterhooks waiting for some known path forward.Investors are similarly agitated as policy changes from the White House have kept everyone off balance and confused about what is the best area to buy into and which sectors should be sold off.
It may be that come April 2, the market will have enough certainty to get some sort of boost – a temporary relief rally.But that would be a sell into space as tariffs are a negative any way you look at them.They will be disruptive to the US and global supply chains, negative for US and global growth and, for the US and economies that retaliate, inflationary.
And tariffs are just one slice of the economic picture, which is looking increasingly challenging.Consumer sentiment is showing weakness, inflation is expected to surge, and unemployment numbers are rising.Recession signs are showing up everywhere.
The U.S. share market fell 2 percent last Friday.It’s down more than 9 percent since Trump announced his plan for reciprocal tariffs in the middle of last month – with the tech-heavy Nasdaq market down 2.7 percent and the “Mag Seven” mega-tech stocks down 3.5 percent.
Most US business economists have been revising down their expectations of US economic growth this year from an original consensus of GDP growth of around 2 percent.Some investment banks’ forecasts are below 1 percent.
With inflation remaining stubbornly high – above the Fed’s 2 percent target even before the core of Trump’s tariffs plans is unveiled, the risk of stagflation – falling growth even while inflation remains high – is rising.Without a material fall in the inflation rate, the Fed will be forced to keep interest rates on hold.
Trump’s tariffs policy is a game where no one wins. It is doubtful that anything Trump does will materially shrink America’s trade deficit unless it results in a substantial reduction in US living standards and an America that lives within its (diminishing) means.And it is something to think about that he might inadvertently actually achieve that.
MARKET UPDATE
S&P500
The view of a major top since Feb. remains.There is scope for further consolidation/ranging before a strong resumption of the downtrend resumes.
Support: $5555/65/$5500
Resistance:$5675/85 and $5795
GOLD
Gold has pushed to another new high, but the market is seen within the final up leg in the rally from the Feb 28th low (wave v) as well as the larger up move from the Nov. low at $2537, which suggests a rising risk of a peak for at least a few months.
Support: ~$3050/$3025/$2995
Resistance: $3095
BITCOIN
No change.Bitcoin is still seen basing in a large correction, with eventual new highs above that $109 area after.As I have already pointed out, we could see lower lows in the low $70’s or even the high $60’s, before the correction is exhausted.
The buy-the-dip mentality is still strong among the retail investing crowd, even though markets have been spooked by the Trump administration trade war and the growing risk of a recession.
Individual investors have invested $32.9 billion into stocks since late February, according to Vanda Research.
Retail Investors have been buying the dip mostly in mega-cap tech names and among chip stocks.
The 10-day moving average of retail flows into the Magnificent Seven stocks climbed to its highest level since mid-2024 when investors bought the dip as Nvidia shares declined 30% from a peak of $135 a share last June.
Nvidia remained the most popular retail stock, with net flows reaching 1.39 billion in the last five trading days. Nvidia shares are down 18% year-to-date.
Tesla was the second-most popular stock among retail investors, who bought a net $811 million worth of shares in the last five trading days.The stock is down 28% year-to-date.
Palantir (PLTR), Amazon (AMZN), and Advanced Micro Devices (AMD) were also among the top five most popular retail stocks in the last week, with investors pouring in a net $417 million in the three companies.
The jitters on Wall Street are not discouraging retail investors from buying the dip.That’s even despite growing concern over the impact Trump’s trade war may have on the economy and the potential for the U.S. to enter a recession later this year.(The U.S. is probably already in recession – but hard data will only confirm that later this year).
Citi and HSBC downgraded their ratings for the US stock market this month, citing growth concerns in the US.Meanwhile, Goldman Sachs, RBC, and Barclays have also trimmed their price targets for the S&P500.
It seems that the retail investor has grown numb to hard data, or should I say they have grown a rhino hidein response to the hard data being thrown at them.
To be still buying this market when consumer confidence declined for a fourth straight month in March, and expectations for income, business activity, and the job market declined to a 12-year low, reveals a truly blaze attitude.
Retail investors have probably been taught to lean into the fear and buy anyway.
And this is why this bear market will probably end up looking like an expanding triangle.Example provided here.
Retail investors return to the market after the first drop and buy heartily, not concerned at all about any future drops in the market.Then a second fall happens, and the retail investor once again picks up the pieces and buys again, and the market rallies.However, it might be the third big drop that really sets the heart pounding and makes them think twice about buying again.Have they been taken in by a buying the dip mentality, without question?
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