Weekly Market Bites

end of week markets update

1) April 2 – “Tariff Liberation Day” finally landed... and markets didn’t cheer what MAGA had on the menu.

• S&P500 dropped 4.84%

• Nasdaq was down 5.97%

• International equities fell about 2%

There was nowhere to really hide except in US treasuries. Even gold fell, as well as the US dollar against other currencies. Both traditional safe havens.

Here’s a summary of markets year-to-date:

2) MAGA-EXIT

Yesterday was the worst day for the stock market since the pandemic crash days.

Almost everything got smoked: companies with global supply chains, the MAG-7 tech giants, banks, automakers… you name it:

• Apple -9%

• Microsoft -2%

• Amazon -9%

• NVIDIA -8%

• JP Morgan -7%

• Wells Fargo -9%

• Bank of America -11%

• Lululemon -10%

• Nike -14%

• General Motors -4%

• Ford -6%

• Carnival Cruise -12%

• Airbnb -7%

So what actually happened?

Basically, the President of the United States stood up and said: the U.S. is done playing nice. Globalization is over. America is going in economic island mode.

To the rest of the world: middle finger 🖕 

The new narrative: The American middle class has been robbed and American consumers hold all the cards. And as their chosen rep, he’s going to use that leverage to squeeze other countries: economically, politically, militarily…

They don’t value nor need US trade partners.

Maybe MAGA is right. Maybe this brings back factories, fuels a new U.S. industrial boom, and tariffs help pay the deficit. And a statue of DJT is gonna be there next to Lincoln in DC.

But no matter how you spin it, there are always winners and losers.

And right now? Markets are telling you loud and clear who’s losing.

Even the Trump team knows it.

So what now? Is this the end of the uncertainty?

Feels more like the opening scene.

3) Tariff Worst-Case Scenario

Yesterday and today were one of the wildest days in the stock market’s I have ever seen.

It actually started off kind of okay. As Trump kicked off his big event, markets began to rally. With the S&P500 up more than 1% in after-hours trading

Why? Trump had initially mentioned a 10% base tariff on all imports. A nice clean number.

10%? That’s kinda manageable, right?

But then... Howard Lutnick (Commerce Secretary) handed Trump a billboard.

The board showed a list of countries, with two columns:

• On the left, how much each country “allegedly charges” U.S. imports.

• On the right (in bright yellow), how much the U.S. will now charge them.

And markets started crashing REAL TIME. Continuing with yesterdays bloodbath.

Trump explained that the yellow column, the new U.S. tariff rates, was the result of an “exhaustive analysis.”

This was about fairness he said. In fact, he was being generous: the numbers he was using were only half of what those countries “charge” the U.S.

It took social media about 30 minutes to decipher there was no PHD analysis or math behind the tariffs.

To use an example:

• The U.S. exports $18B to Indonesia.

• Indonesia exports $28B to the U.S.

• The U.S. has a ~$10B trade deficit

• $18B / $28B = 64% (tariff charged to the USA according to their math)

• 64% / 2 = 32% tariff applied on Indonesia now

That’s the logic.

Later confirmed by the White House:

Any trade deficit = cheating on America

So ultimately there’s no distinction between:

• A Latin American country that exports mangos (which don’t grow in the U.S.)

• Taiwan shipping advanced semiconductors (because they’re world-class at it)

• Vietnam making t-shirts and sneakers (jobs no one in the US wants)

• Any country that exports inputs or commodities used in US domestic manufacturing.

• And, China, which does employ unfair trade tactics at massive scale

Even countries with trade surpluses with the U.S.? Like the UK and Australia.

Still getting hit with the base 10% tariff.

Friend or foe.

Not even uninhabited islands were spared the 10%. 🤣

4) What Wall Street's Saying:

i) J.P. Morgan (Global Research) Titled their note “There will be blood.” 

Enough said.

ii) George Saravelos (Deutsche Bank)
On the global financial system: Be afraid if the world decides to divest from US financial assets.

vi) Goldman Sachs (John Flood)
Translation: not priced in. Not even close.

iv) Warren Pies (3Fourteen Research). Kept it simple:

v) Bob Elliott
The silver lining: it all be transitory.

5) For Long Term investors: Buy the dip.

Toyda’s market reminds me of Walter Deemer, one of the best technical analysts who ever lived, who said:

“When the time comes to buy, you won’t want to.”

And this piece of wisdom:

And no matter what happens don’t forget to laugh a little in the process:

charts

Vietnam and Cambodia were some of the hardest hit:

Explaining why Nike was one of the stocks that got hit the hardest yesterday (down 14%):

And finally, some parting wisdom