March 2025 DDD

[ducati916]

The good news about the U.S. economy in January is that inflation was subdued and Americans were making more money. The bad news is that people weren't interested in spending it. Why it matters: The latest data on the state of the economy as President Trump took office is further evidence that there was something of an air pocket in spending and confidence to start the year. It's a warning about consumers' wariness as the administration undertakes an aggressive economic agenda. The intrigue: The Atlanta Fed's GDPNow, an estimate of GDP growth based on incoming data, fell to negative 1.5% for Q1 after incorporating this morning's releases. That includes preliminary trade data showing a record surge of goods imported into the U.S. — a sign of businesses bringing things in early to get ahead of the administration's tariff threats. Rising imports are a drag on GDP. Before today's data, GDPNow was comfortably in positive territory, at +2.3%. What they're saying: "The data indicates that consumers were saving more in January, which aligns with the rise in economic pessimism we've seen in recent sentiment data," NerdWallet senior economist Elizabeth Renter wrote in a note. "People are feeling uncertain about the near-future economy, and are spending a bit more cautiously," Renter added. By the numbers: The Consumer Price Index released earlier this month indicated the inflation last month was hotter than expected. The Personal Consumption Expenditures Price Index — the inflation measure preferred by the Federal Reserve — was more encouraging, as economists expected. In the year through January, the PCE increased 2.5% — cooling for the first time since September. Core PCE, which excludes energy and food costs, rose 2.6%, the slowest pace since 2021. On a three-month annualized basis, core PCE held at 2.4%, still higher than the Fed's 2% target. Between the lines: Personal income sped ahead of inflation in January, increasing 0.9% (or 0.6%, adjusted for inflation). That surge was primarily led by the cost-of-living adjustment for Social Security benefits, along with healthy compensation growth and a boost from interest and dividend payouts. Meanwhile, consumption expenditures fell 0.2%, the first decline in monthly spending since March 2023. That resulted in a sharp rise in the savings rate, which increased to 4.6% from 3.5% in December. Yes, but: Consumer spending is the bedrock of the economy, and one month of data doesn't mean the cracks are here to stay. Isolated events, like the cold front and the Los Angeles wildfires, likely dented spending. "The recent slump in consumer confidence suggests some of January's drop in spending was due to fears of the impact of tariffs, [Department of Government Efficiency] cuts and deportations," Comerica chief economist Bill Adams wrote in a client note. "But winter weather also likely delayed a lot of nonessential spending, which should rebound in February with less disruptive weather. January's robust increase in incomes also suggests spending growth should recover near-term."

Oil News:

Friday, February 28, 2025

Following extremely rangebound trading throughout most of mid-February, oil prices are set to post their largest weekly loss in three weeks, with the potential resumption of Iraqi exports from Ceyhan and Trump’s diplomatic efforts on the Russia-Ukraine track tilting sentiment towards bearishness. Concurrently, the US president has also signalled tighter supply from Venezuela, but with ICE Brent futures dropping to $73 per barrel, the oil markets seem to be downplaying any potential short-term supply disruptions.

Trump to Cancel Chevron’s Venezuela Waiver. US President Donald Trump announced he would revoke the 2022 Venezuela sanctions waiver from March 1 onwards, giving the US major Chevron (NYSE:CVX) a six-month wind down period to halt operations in the country that made up 10% of its production last year.

Beijing Warns US on Copper Tariffs. China’s Commerce Ministry urged the United States to halt its investigation on new tariffs on US copper imports, with Donald Trump using the Trade Expansion Act of 1962 that he did in his first term, pledging to retaliate if Chinese entities get affected by the levies.

Shifting Policy, BP Means ‘Back to Petroleum’. In its much-anticipated investor day, UK oil major BP (NYSE:BP) pledged to increase annual oil and gas spending to 10 billion, cut investment into renewables from $5 billion to $1.5-2 billion per year and carry out divestments worth $20 billion by 2027.

Majors Consolidate Malaysian Upstream Assets. Italian oil major ENI (BIT:ENI) and Malaysia’s state oil company Petronas agreed to create a joint venture that would combine some of their upstream assets in Malaysia and Indonesia, with the new entity set to boast some 3 billion boe of reserves.

Indonesia Arrests Top Oil Executives. Indonesia has arrested four top executives at state oil firm Pertamina over alleged corruption in crude and oil product imports, with the country’s attorney general claiming that the alleged offenses between 2018 and 2023 cost the nation some $12 billion.

China Expands into Algeria’s Oil Sector. Algeria’s state energy firm Sonatrach and China’s state-controlled major Sinopec (SHA:600028) signed an exploration pact worth $850 million to develop the Hassi Berkane play, even before US oil majors Chevron and ExxonMobil got their respective blocks.

US Waives Sanctions on Serbian Refinery. The US has suspended sanctions for 30 days on Serbia’s national oil company NIS, majority-owned by Russian companies and providing fuel for the entirety of Serbian territory, as the largest stakeholder Gazprom Neft transferred a 5% stake to Gazprom this week.

Japan Locks in More Emirati LNG. ADNOC, the national oil company of the UAE, has signed a 15-year term supply agreement with one of Japan’s largest gas buyers Osaka Gas (TYO:9532) to deliver up to 0.8 million tonnes LNG per year starting from 2028, its fourth sales agreement for the Ruwais LNG project.

Russia Seeks to Build First Refinery in Myanmar. Russia and Myanmar have agreed to build a refinery in the South Asian country that currently has zero refining capacity, eyeing the Dawei special economic zone for it with further plans to build a port and a coal-fired thermal power plant there.

US, Ukraine Agree on Critical Minerals Deal. Ukraine’s President Zelensky is set to sign a comprehensive critical minerals deal with US President Trump this Friday, committing Kyiv to pay $500 billion from resource extraction as a repayment for past and future aid provisions, without security guarantees.

IAEA Sees Iranian Uranium Stock Surging. According to the IAEA, Tehran’s stockpile of enriched uranium surged more than 50% over the past three months to 839,200 kg as Iran prepares for Trump sanctions, driven by an alleged sevenfold increase in enrichment activities since December.

Petrobras Posts Rare Quarterly Loss. Brazil’s national oil company Petrobras (NYSEBR) surprised the oil markets with a bumper $2.9 billion net loss in Q4 2024, citing currency devaluation as the main factor behind the one-off slump as the Brazilian real was the worst-performing major currency last year.

Iron Ore Feels the Pinch of China Tariffs. The benchmark May iron ore futures traded on China’s Dalian exchange fell to ¥805 per metric tonne ($110/mt) this week after Asian countries followed Trump’s lead, with Vietnam slapping anti-dumping levies on Chinese steel with South Korea going for a 38% tariff rate.

Iraq to Resume Kurdish Flow Soon. The Iraqi government is set to announce the resumption of oil exports from the breakaway region of Kurdistan over the upcoming days, initially starting off with some 185,000 b/d to be marketed by state oil firm SOMO and gradually increasing the volumes over time.


The international order forged after World War II is imploding, squeezed on all sides by the return of strongmen, nationalism and spheres of influence — with President Trump leading the charge, Axios' Zachary Basu writes.

• Why it matters: Trump is openly scornful of international institutions and traditional alliances. Instead, he sees great opportunity in a world dominated by superpowers and dictated through dealmaking.

The big picture: Trump's approach is based, according to U.S. officials, in "realism" — and the belief that "shared values," international norms and other squishy concepts can never replace "hard power."

• "The postwar global order is not just obsolete," Secretary of State Marco Rubio declared at his confirmation hearing last month. "It is now a weapon being used against us."

Where the U.S. once helped enforce global norms, such as on trade, Trump is undercutting them.

• Trump's first term posed newfound threats to 20th-century alliances and structures — NATO, the World Trade Organization, even the UN.
• A second Trump term could render them virtually obsolete.

Zoom in: The frailty of the rules-based order was exposed this week on the preeminent global stage built to support it.

• At the UN General Assembly on Monday, the U.S. voted againsta resolution condemning Russia for invading Ukraine on the third anniversary of the war.
• It was the first time since 1945 that the U.S. sided with Russia — and against Europe — on a resolution related to European security, according to the BBC's James Lansdale.
• Nearly all other Western leaders see Russia as a rogue state and an aggressor. Trump sees a potential partner.

​

Cover: The Economist
Zoom out: For Europe, which has relied on the U.S. to guarantee its security for the last eight decades, this isn't just a wakeup call. It's an existential challenge that throws the entire transatlantic alliance into question.

• Germany's conservative leader and chancellor-in-waiting, Friedrich Merz, said after his election victory Sunday that his "absolute priority" is to rapidly strengthen Europe so it can "achieve independence from the USA."

Between the lines: In today's multipolar world, the U.S., Russia and China are all racing to secure their strategic interests and solidify — or expand — their spheres of influence.

• Russian President Vladimir Putin dreams of reconstituting the Soviet bloc and has tried to do so by force — invading Ukraine and meddling in elections across the Western world.
• 
  
• China, an economic and military superpower under Xi Jinping, is watching Ukraine carefully as it ponders whether to invade Taiwan and cement Xi's legacy through "reunification."

They're mere tremors at this point, not an earthquake. But worries about the outlook for U.S. economic growth are starting to mount. Why it matters: On-again, off-again tariffs on major trading partners have added uncertainty to the business outlook, making hiring and investment decisions more complex. Consumers whose incomes depend on the federal government — whether as employees, contractors or benefit recipients — face the brunt of Trump administration cutbacks. This risk could make them more cautious in their spending. State of play: Evidence these forces will restrain overall growth is only being seen in soft data so far — surveys of business and consumer sentiment, for example. The hard data shows little evidence of deterioration in spending, investment or hiring. But new growth worries have coincided with a steep drop in Treasury yields since the start of the year, which tends to reflect bond investors' growth expectations. What they're saying: "With 3 million federal employees potentially worrying about their jobs and 6 million federal contractors worrying about their jobs, the risks are rising that households may begin to hold back purchases of cars, computers, washers, dryers, vacation travel plans, etc.," wrote Torsten Slok, chief economist at Apollo Global Management, in a note out this morning. "We remain bullish on the economic outlook, but we are very carefully watching the incoming data for signs if this is an inflection point for the business cycle," he added. Kansas City Fed president Jeff Schmid said in a speech this morning that "discussions with contacts in my district, as well as some recent data, suggest that elevated uncertainty might weigh on growth." "This presents the possibility that the Fed could have to balance inflation risks against growth concerns." Of note: Clients of one major bank are asking if it's time to think about using the word "recession" again. "As US data soften, clients have started asking us about the prospect of a US recession," wrote Barclays' Ajay Rajadhyaksha and Marc Giannoni in a note yesterday. "We think the odds are still low, but have clearly risen." "A US recession remains improbable, but is no longer unthinkable in the coming quarters," they added. Reality check: Over the last few years, amid Fed rate hikes and geopolitical strife, predictions of a major slowdown or recession have repeatedly been wrong. The new administration's policies also may be creating tailwinds from deregulation and the prospect of tax cuts. The bottom line: The U.S. economy is a mighty tanker ship, almost always moving forward. But the number of warning signs that it could be pushed off-course is rising.

Not exactly a picture of a strong economy.

Buffett raising cash. All other Fund managers at all time lows in cash holdings. Who do you believe?

Still have a couple of hours trading left in February:



Not a great Feb. for the Bulls.

jog on
duc

 

[peter2]

Are we there yet Duc? Has the semiconductor sector finally reached the low?

 

[ducati916]

Are we there yet Duc? Has the semiconductor sector finally reached the low?

I would say yes.

We go back to test $219-$220 on SOXX



jog on
duc

 

[ducati916]

So actually the market rallied hard into the close:



So individual stocks:



So as far as SPY goes, it's the Mag.7 dragging on the market. Pushed it higher on the way up, dragged it down on the way down.



So the Mag.7 ETF.

SPY



So what I think happened is that Mag.7 bottomed or found support first, started to bounce, short cover, which stabilised SPY.

SOXX



Just plain bottomed.

Some earnings for next week:



jog on
duc

 

[qldfrog]

So actually the market rallied hard into the close:

View attachment 194468View attachment 194467View attachment 194466

So individual stocks:

View attachment 194473View attachment 194472View attachment 194471

So as far as SPY goes, it's the Mag.7 dragging on the market. Pushed it higher on the way up, dragged it down on the way down.

View attachment 194475View attachment 194474

So the Mag.7 ETF.

SPY

View attachment 194476

So what I think happened is that Mag.7 bottomed or found support first, started to bounce, short cover, which stabilised SPY.

SOXX

View attachment 194477

Just plain bottomed.

Some earnings for next week:

View attachment 194470View attachment 194469

jog on
duc

We can safely assume for the 3 consecutive block maps:
daily, weekly and monthly changes ?

 

[ducati916]

So for next week:









Last week:



This week:




Under Trump







March Seasonality



March can be a big month for the Bulls if you place any credence in seasonality. Feb. obviously sucks balls. Seasonality is something excluding exogenous macro or other shocks, is something that can be helpful.

There is something on the horizon, but this will be a separate post.


jog on
duc

 

[ducati916]

America is the world's biggest business. And its shareholders — U.S. taxpayers — should be panicked about their investment, the legendary Mary Meeker, longtime Silicon Valley and Wall Street analyst, tells Axios' Courtenay Brown.

• Why it matters: "USA Inc.," as Meeker calls it, has more at stake than any single corporation. America's worsening fiscal position could limit its ability to respond to economic or geopolitical threats.

Reprising an inquiry from 2011, Meeker — founder of the venture capital firm BOND in San Francisco — examined the financials of the U.S. the way she would analyze those of a public company.

• "Beneath the surface, financial 'results' — treating the government as if it were a corporation — conceal a buildup in structural weakness that can jeopardize our country's standing in the world," Meeker, who made her name during the dotcom boom, writes with Alexander Krey in a new report first seen by Axios.
• The report, "USA Inc.," doesn't mention Elon Musk's DOGE. But Meeker says that improving the government's "operating efficiency" would ease spending, as originally proposed in her 2011 report.

By the numbers: If the government (by any method) reverted to the slower headcount growth trend seen from 1988 to 2009, that would imply 840,000 fewer workers in the next five years, according to Meeker's updated analysis.

• That would save more than $1.3 trillion over the coming decade.
• "USA Inc. could also focus intensively on local private company outsourcing, where state and local governments are finding real productivity gains," Meeker says.

Zoom out: Meeker believed a 450-slide document published in 2011 would be her "one and done" alert on America's fiscal state. Warnings in the 2010s about higher borrowing costs are now the nation's reality.

• "Even as USA Inc.'s debt was rising for decades, plunging interest rates were keeping the cost of supporting it relatively steady," Meeker writes.
• Now interest payments are swallowing government revenue, with spending on Medicare, Medicaid and Social Security set to explode.

Top Trump administration officials are arguing that it is misleading to include government spending in the quarterly tally of GDP. It sets up a clash between the administration and economists over how to calculate the broadest measure of economic activity. The big picture: GDP statistics are calculated the way they have been for the last eight decades for good reasons — but administration officials are correct that the accounting for government spending isn't ideal. What they're saying: "You know that governments historically have messed with GDP," Commerce Secretary Howard Lutnick said on Fox News Channel's "Sunday Morning Futures" yesterday. "They count government spending as part of GDP. So I'm going to separate those two and make it transparent," he said. "A more accurate measure of GDP would exclude government spending," Elon Musk wrote on X on Friday. "Otherwise, you can scale GDP artificially high by spending money on things that don't make people's lives better." State of play: GDP aims to capture the value of all economic output produced in a given time period within U.S. borders. The formula for that tally, which you may recall from introductory economics, is that GDP = consumption + investment + government spending + net exports. So why is government spending included in that formula? Because otherwise GDP would not fully capture the value of goods and services produced. When the government buys a fighter jet, or builds a road, or educates a child, it reflects the production of goods and services. So if you exclude government spending from GDP, you aren't getting a full picture of U.S. output. Zoom in: It is true, however, that government spending is counted in GDP by simply adding in the dollars spent, without any real test of how efficiently or productively the money was used. "If the government buys a tank, that's GDP," Lutnick said in the TV appearance. "But paying 1,000 people to think about buying a tank is not GDP. That is wasted inefficiency, wasted money. And cutting that, while it shows in GDP, we're going to get rid of that." It's true, as Musk and Lutnick suggest, that if the government hired a bunch of people to twiddle their thumbs all day, it would show up as higher GDP while not making anyone better off, save perhaps the thumb-twiddlers. Of note: The Bureau of Economic Analysis — which Lutnick now oversees — acknowledges these limitations. "Difficult conceptual and practical problems arise in measuring the output of governments, primarily because most of this output is not sold in the marketplace," reads the bureau's handbook for GDP and related data. "If possible, it would be preferable to measure actual changes in the quantity or volume of the services provided, thus allowing for changes in productivity," the document notes. Zoom out: More conceptually, it's not the job of economic statistics to make value judgments on what individuals, businesses or governments do with their money. It's just trying to get the math right. You might not agree that a given government expenditure was worthwhile, but that's true of every line of GDP. For example, if somebody orders an absurdly priced $2,000 bottle of wine at a restaurant, that counts on line 20 of the GDP report as personal consumption expenditures on food services and accommodations. If a movie studio spends $100 million to make a terrible movie, that shows up on line 38 of the report, as fixed investment in entertainment, literary, and artistic originals.

From JC:

Monday, March 3, 2025 ​ I came down with a pretty bad cold this weekend. Most of my Sunday was spent quarantined in my office so I wouldn't get my kids sick (4yr old and twin 2yr olds). Of course, rather than laying in bed resting, I was in my office looking through charts. I couldn't help myself. It's my way of relaxing. And as it turns out, I do feel a lot better today than I did when I woke up yesterday. But one thing I was able to do was go one by one counting stocks, sectors and indexes all over the world to see if these ugly rumors about weakening market breadth were true. As it turns out, they're just lies. Market breadth continues to expand as more and more countries around the world are hitting new highs, not fewer. We already discussed how Earth is Hitting New All-time highs. But if you go one by one, you can really see all the strength underneath the surface. Here's the London FTSE100 Index hitting new all-time highs again this morning: ​ And even as you go down the cap-scale, it's not just the large-caps that are doing well. We already discussed how the Euro STOXX 600, which includes small-caps and mid-caps, is hitting new all-time highs. But when you go country by country, you'll notice the same thing. Take a look at Dutch Small-caps breaking out to new highs: ​ Even outside of Europe, the strength continues. Look at Chile closing at new all-time highs again this month: ​ One thing that I find interesting is that the Global Indexes with less exposure to U.S. stocks are doing better than the Indexes where the U.S. has a higher weighing. Look at the Global Dow (with only a 54% weighting to the U.S.) hitting new all-time highs, while the Global100 Index (80% weighting to U.S. stocks) is underperforming. It's been a while since we've seen this sort of thing: ​ Now when you look at the U.S. in isolation, I will ask you this. Do these look like downtrends to you? Or do they look more like new uptrends? ​ Both the S&P500 and Nasdaq100 are above their prior cycle highs, on an equally-weighted basis. As long as that remains the case, it's hard for me to be too bearish. Meanwhile, when you go sector by sector in the U.S., do you know how many of them closed February below their 10-month moving average? One. Materials. The smallest and least relevant sector in America. For those of you who might be new to the 10-month moving average, this is something we look at once each month as we do our Monthly Candlestick work. The 10-month moving average system is the oldest trend following system that I know of. It's been around since way before I was born. Simply put: Bad things happen below the 10-month moving average. Keep in mind that 10 months = 40 weeks = 200 days.

1 big thing: Shocking, not surprising

​ Photos: Saul Loeb/AFP via Getty Images Yesterday's Oval Office shouting match was shocking. But it wasn't too surprising to anyone close to President Trump or Vice President Vance. Why it matters: Privately, Trump sees Ukrainian President Volodymyr Zelensky as a pro-Biden, ungrateful lightweight destined to lose to Russia. And Trump advisers believe Zelensky sees Trump as a pro-Putin, delusional fool destined to make him lose to Russia, Axios' Alex Isenstadt and Marc Caputo report. To Trump's team, it was three strikes — and now officially out of favor — for Zelensky. In their eyes, Zelensky already had two strikes against him when he sat down with Trump and Vance. That was the backdrop for a conversation that would become perhaps the most epic televised foreign policy row in history — an argument that rattled Europe and vividly illustrated a sharp turn in U.S. foreign policy toward Russia. It began with what Trump's team saw as Strike 3 against Zelensky: He disagreed publicly with Vance, who accused Zelensky of trying to "litigate" his case before the media. Vance said Zelensky didn't show enough thanks to the U.S. for funding Ukraine's defense — or to Trump for trying to bring peace. After a tense nine-minute exchange, it ended with Trump stopping the 50-minute meeting and essentially showing Zelensky the door. Strike 2 came just before Friday's meeting, when Zelensky arrived at the White House without a suit or jacket, as requested. It was perceived by White House staffers as disrespectful. Zelensky was dressed instead in a three-button, skintight, long-sleeved black athletic shirt. "Wow look, you're all dressed up today," Trump said in a seemingly friendly way that advisers say masked annoyance. Brian Glenn, a conservative reporter and boyfriend of Trump ally Rep. Marjorie Taylor Greene (R-Ga.), voiced the attitude of Trump's team when he asked Zelensky, "Why don't you wear a suit? … Do you own a suit?" Vance laughed out loud. "I will wear a [suit] after this war will finish," Zelensky said. "Maybe something like yours. Maybe something better ... maybe something cheaper." Strike 1, as first reported by Axios, came Feb. 15, when Zelensky trashed a proposed mineral rights deal with Ukraine that he privately had discussed the day before in Munich with Vance and Secretary of State Marco Rubio. ​ Ukrainian President Volodymyr Zelensky speaks during an interview on Special Report With Bret Baier yesterday evening. Photo: Win McNamee/Getty Images The big picture: At the heart of the discord is Trump's view of the conflict, which continues to challenge the United States' long-held alliances in Europe. Trump sees geopolitics in terms of negotiations between powerful countries and big personalities. Russian President Vladimir Putin is a coequal in this paradigm. Zelensky — the leader of a smaller country surviving thanks to American largesse — isn't. Trump also approaches politics like a business deal or, as a former casino owner, as a type of poker. In one telling moment, he told Zelensky he had a bad hand without the U.S. "I'm not playing cards. I'm very serious," Zelensky said. Trump shot back: "You're playing cards. You're gambling with the lives of millions of people." Quick to temper and desiring of flattery, Trump demands a high degree of obeisance from supplicants. Zelensky didn't show that — and Vance was quick to try to put him in his place. Trump's expectation of deference from Zelensky is particularly high because of the massive aid the U.S. has sent to Ukraine (an amount Trump inflates). The two have had a fraught relationship since 2019, when Trump was impeached for trying to leverage Zelensky for political gain against Joe Biden. Vance has long had antipathy for Zelensky and funding Ukraine's fight against Russia's invasion. In his 2022 Senate race in Ohio, Vance ran on a platform of ending Ukraine aid. "I'm not sure this is salvageable," a senior White House adviser summed up. "Three strikes and you're out."

So the YEN



Full:https://www.cnbc.com/2025/02/21/jap...4percent-in-january-highest-in-two-years.html





For years we have heard “Japan ran up their debt and they are fine, so why can’t we?” Setting aside the 180-degree opposite differences between the US and Japan on current account, NIIP, defense spending, etc., Japan is no longer “fine”. Inflation is 4% and 10y JGB yields are 1.4%...and Japan likely has the highest convexity of bond losses to rising rates of any nation in the world.

While markets’ attention has shifted to Trump, DOGE, Russia, China, tariffs, the 10y JGB yields have now diverged from 10y UST yields by the most since the BOJ raised their YCC cap on 10y JGB’s in late July 2023: Over the past 2+ years, when 10y JGB yields have risen, 10y UST yields have tended to follow…we would expect that to continue if the BOJ hikes rates to fight inflation. But if that drags 10y UST yields higher it would be in direct contravention to Bessent and Trump attempting to “target” 10y UST yields.






If the BOJ decides to NOT raise rates to fight inflation that just printed 260 bps > 10y JGB yields, then presumably the JPY will fall sharply against the USD and as you can see on the following chart, a weaker JPY v. USD has also driven…higher 10y UST yields.



So the Yen carry trade, if it exists, can throw a spanner in US markets as higher JGB rates causes rebalancing, which manifests as a higher Yen.

A lower US 10yr is critical for the US to term out new debt issues.



So currently stock weakness has driven a run-to-safety in the 10yr.

Of course stock weakness reduces tax intake. GDP is under threat from DOGE. All are issues that impact markets going forward.

Over the weekend Trump announced that there will be a crypto reserve. Crypto's were up biggly, but seem to have lost a little already. These announcements always come at the w/e. Those in the know get the memo on Friday and cash in. Those political donations obviously get repaid.

Other Trump policies will have a significant impact on NASDAQ. More on that later.

Gold back up into $2900 territory. Gold is going higher.

MAG 7.



Particularly NVDA having a bad Monday.

jog on
duc

 

[ducati916]

Market closing now:



Pretty ugly day.

Closed my pairs trade:




Not sure if this has anything to do with it:



But a strong Yen implies that BOJ is shifting rates in Japan to fight inflation.




Did not hold. Dragging SPY down with it. Helps on the way up, hurts on the way down.

jog on
duc

 

[ducati916]

Oil News:

The US-China trade war escalated over the past week with the White House signing off another 10% hike on Chinese imports to the country, raising the overall level to 20%, all the while postponed tariffs on Canada and Mexico took effect March 4.

- Canadian crude flowing to US Midwest refiners will be subjected to a 10% tariff, most probably leading to a 2-3% increase in gasoline prices, whilst Mexico’s 25% levy would force refiners in the US Gulf Coast to look elsewhere for heavy barrels.

- Canada immediately retaliated by imposing 25% tariffs on some $30 billion of US imports, potentially followed by another levy targeting $125 billion in 21 days’ time, with the province of Ontario also threatening to stop electricity flows to the US.

- The discounts on Canada’s main export grade WCS widened massively this week, with the grade back to trading at -$14 per barrel to the prompt WTI futures contract, the same level it dipped to a month ago.

Market Movers

- UK-based energy major Shell (LON:SHEL) is considering selling some of its chemical assets in Europe and the United States, including the Deer Park chemical plant next to the refinery it sold in 2021 to Pemex.

- UAE’s national oil firm ADNOC merged its polyolefin assets with Austrian company OMV (VIE:OMV), which combined with its $13.4 billion Nova Chemicals acquisition will create a $60 billion petrochemical giant.

- Eni-backed Norway-focused upstream firm Var Energi (FRA:J4V) has reported the first oil discovery in Norway’s Barents Sea this year, finding some 15-45 MMboe of oil with its Zagato exploration well.

Tuesday, March 04, 2025

OPEC+ has been apprehensive ever since it started telegraphing its readiness to unwind production cuts, but the market now believes it will happen, prompting a slump in oil prices. So far, ICE Brent has shed $4 per barrel this week alone. Balancing on the edge of $70 per barrel, oil has remained immune to Trump’s tariffs on Canada and Mexico, fearing the US-China trade war much more.

US-China Trade War Escalates. Following President Trump’s tariffs on Chinese consumer electronics, Beijing announced its retaliatory tariffs on U.S. agriculture goods, slapping a 15% levy on U.S. imports of chicken, beef and cotton, 10% on beef and pork as well as adding 15 US firms to its Export Control List.

Speculators Are Shorting Crude Futures (Again). Hedge funds and other money managers have increased their short positions on WTI Nymex crude futures by a whopping 20% week-over-week to some 133,000 contracts, all the while long positions have remained unchanged at 330,000 lots.

Chinese LNG Demand Cools Down. China’s LNG demand dipped to its lowest since February 2020 as February arrivals totalled only 4.5 million tonnes amidst warm weather, high stocks and weak manufacturing growth, making Japan the world’s largest LNG importer for the second time in a row.

Johan Castberg Gets Delayed Again. Europe’s largest upstream project that is still yet to be launched, Equinor’s (NYSE:EQNR) 220,000 b/d Johan Castberg field located in the Barents Sea, has been delayed once again due to bad weather, initially expected to come online in December 2024.

Mexico’s Oil Industry Is Bleeding Money. Mexico’s national oil company Pemex reported a $9.1 billion Q4 2024 loss, a stark contrast to net profits posted a year ago amidst declining production, ending last year with $97.6 billion in financial debt and another $24.2 billion owed to service providers.

Kazakhstan Breaches OPEC+ Compliance. Buoyed by booming production from the Tengiz field, oil and condensate production in Kazakhstan soared to 2.12 million b/d last month, which would put crude-only output in the country some 350,000 b/d above its OPEC+ quota of 1.468 million b/d.

Libya Prepares First Upstream Auction Since 2007. Masoud Suleman, the acting chairman of Libya’s NOC, announced that the North African country plans its first exploration bidding round in more than 17 years, seeking to garner the $3 to $4 billion required to reach output of 1.6 million b/d.

China Takes Over Ecuador’s Main Field. The government of Ecuador has vowed to transfer the operation of its highest producing asset, the 75,000 b/d Sacha field, to a consortium led by China’s Sinopec (SHA:600028) as Quito seeks to reverse production declines.

Trade War Risks Depress Iron Ore. Heavily affected by the deteriorating U.S.-China trade war, iron ore futures have been declining for seven consecutive trading sessions with China's benchmark Dalian May contract dipping to ¥780 per metric tonne ($107/mt).

India Wants Billions from Reliance. India’s Petroleum and Natural Gas Ministry has raised a demand of $2.81 billion vis-a-vis the country’s largest private energy firm Reliance Industries, citing gas migration to its offshore KG D6 block from the acreage run by state-controlled ONGC.

Saudi Aramco Slashes Its 2025 Dividend. Saudi Arabia’s national oil company Saudi Aramco (TADAWUL::2222) announced that it expects to pay an annual dividend of $85.4 billion, a 30% decline year-over-year, a much bigger cut than the 12% dip in annual net profits last year.

Chinese Copper Smelters Prioritize Market Share. Chinese copper production is set to rise by 5% in 2025 to 12.45 million tonnes, squeezing smelting margins to the lowest reading ever with processing fees currently being $20 per metric tonne negative, preferring to retain market share at the expense of profit.

Iraq Rushes to Bring Kurdish Oil Back. Iraq failed to reach a comprehensive deal with international oil firms operating in the semi-autonomous Kurdistan region, agreeing on the initial volumes of 185,000 b/d but seeking to introduce a third-party consultant to oversee future transactions.

From JC:

A big theme last night was the massive rotation that we're seeing underneath the surface. I don't mean to be mister diagonal trendline guy, but this is worth watching:

​

I think this right here is part of the reason why investors are so pessimistic, particularly the American ones. They own way too much of the Growth stocks, and no where near enough of the other stuff. This is most likely due to the combination of recency bias (Growth has been the biggest winner for a while now) and of course their home country bias (the US has been the best place to be invested for a while now). The S&P500 closed at a new all-time high less than 2 weeks ago. So did the Nasdaq. But despite all of that, individual investors are the most bearish they've been since the market literally bottomed back in 2022:

​

As a reminder, at the market lows back in 2022, the last time sentiment was this pessimistic, economists were pricing in a 100% chance of recession. We all know how that turned out... We had 2 of the greatest back-to-back years for US Stocks in American history. Thank you economists! And so here we are, with the major US Indexes just a few points from all-time highs, and many of the other major stock indexes around the world all still hitting new all-time highs, more of them actually than at any other point this entire bull market. It's been all about rotation.

Trump:

President Trump's decision last night to pause all military aid to Ukraine is the latest in a string of moves that could have been plucked from Vladimir Putin's personal wish list, Axios' Dave Lawler writes.

• "President Trump has been clear that he is focused on peace," a White House official said of the aid suspension. "We need our partners to be committed to that goal as well. We are pausing and reviewing our aid to ensure that it is contributing to a solution.

Why it matters: Trump is also considering sanctions relief for Moscow and hinting at regime change in Kyiv. The Moscow-friendly streak comes as he seeks to foster peace in Ukraine and better relations between nuclear-armed superpowers.

• But his treatment of Putin as a partner and Ukrainian President Volodymyr Zelensky as a foe has rung alarm bells for NATO allies and even some fellow Republicans.

Breaking it down: Trump has made at least five Moscow-friendly moves in the past two weeks.

1. The White House asked the Treasury and State Departments to identify sanctions on Russia that could be loosened as part of the process of improving relations, Reuters reports. Trump didn't deny that yesterday, telling reporters: "We want to make deals with everybody."
2. Defense Secretary Pete Hegseth reportedly ordered U.S. Cyber Command to suspend offensive cyber and information operations against Russia.
3. Trump has called for elections in Ukraine, and he and his allies suggested after the Oval Office spat that Zelensky might need to go. Regime change in Kyiv was one of Putin's original objectives for invading.
4. The U.S. voted with Russia and 16 other mostly authoritarian countries to oppose a UN resolution last week that condemned Russia's "aggression" in Ukraine.
5. Suspending weapons shipments, which the Trump administration had already dramatically slowed, is the latest dramatic step.

Trump's view: Asked yesterday about the Kremlin comment that U.S. foreign policy approach "largely coincides with our vision," Trump said it "takes two to tango, and you're going to have to make a deal with Russia, and you're going to have to make a deal with Ukraine. ... The fact is that I just want fairness. I want fairness."

Democratic lawmakers are discussing a litany of options to protest President Trump's speech to Congress tonight — including through outright disruption, a half dozen House Democrats told Axios' Andrew Solender and Hans Nichols. Why it matters: Some of these tactics go beyond their leaders' recommendation that members bring guests hurt by Trump and DOGE. This sets up a potential clash between party traditionalists and its more combative anti-Trump wing. What we're hearing: Some members have told colleagues they may walk out of the chamber when Trump says specific lines they find objectionable, lawmakers told Axios. Criticism of transgender kids was brought up as a line in the sand that could trigger members to storm out, according to a House Democrat. "The part that we all agree on is that this is not business as usual and we would like to find a way — productively — to express our outrage," a House Democrat told Axios. Props — including noisemakers — have also been floated: Signs with anti-Trump or anti-DOGE messages — just as Rep. Rashida Tlaib (D-Mich.) held up a sign during Israeli Prime Minister Benjamin Netanyahu's speech last year that said "war criminal." Eggs or empty egg cartons to highlight how inflation is driving up the price of eggs. Pocket Constitutions to make the case that Trump has been violating the Constitution by shutting down congressionally authorized agencies. The intrigue: In closed-door meetings and on the House floor Monday night, lawmakers were specifically discouraged from using props. Share this story. ​ Photo: Julia Demaree Nikhinson/AP Above: First Lady Melania Trump was at the Capitol yesterday for a roundtable discussion on the "Take it Down Act," legislation against revenge pr0n. Go deeper.

More Trump:

The US president announced at 2:42 p.m. Eastern Time that tariffs on Canada and Mexico would commence Tuesday. Many had complained that the market had grown too complacent about tariffs. Judging by the instant reaction, they were right. The vertical lines in the chart indicate the timing of the announcement:


The S&P 500’s worst day this year showed markets disliked it, though both bonds and stocks bounced after initial selloffs. For an administration that has targeted lower 10-year Treasury yields and crude prices and a weaker dollar, the day wasn’t necessarily so bad. Stocks matter a lot for Trump, and their fall could be concerning. There’s a widespread theory that markets will act as the most important guardrail for economic policy; we should soon find out if that’s right.

The pro-growth Trump trades that took hold after the election are almost all in reverse. The following chart is indexed for Election Day and follows stocks relative to bonds, US stocks relative to the rest of the world, US growth stocks relative to value, and Bitcoin. All have turned around since January in a way that must have lost a lot of money for a lot of people. But it would be unwise to take it much further than that. The Trump trades are back where they were Nov. 5. Some extreme enthusiasm has been knocked off the top. Where they are in a year or two will depend on the impact Trump policies actually have on the economy:


It’s noticeable that the biggest losers have been the investments that had the greatest profits to be taken. Nvidia Corp.’s market cap is now down by about $800 billion from its peak, and back to a level it first reached last May. That said, it’s still double the size it started from last year. This is consistent with a correction of excess, and a somewhat indiscriminate retreat from risk:


The deregulatory and tax-cutting parts of the Trump agenda remain as popular as ever on Wall Street. It’s hard to find anyone who likes tariffs. Two comments from today are typical. This is from JPMorgan’s David Kelly:

The trouble with tariffs, to be succinct, is that they raise prices, slow economic growth, cut profits, increase unemployment, worsen inequality, diminish productivity and increase global tensions. Other than that, they’re fine.

Carl Weinberg, chief economist at High Frequency Economics, said:

If they are imposed as threatened, US industrial activity will fold at once, and we will not have to wait until the next ISM survey to know about it. Critical sectors of the economy face existential threats from the Trump tariffs and likely retaliation. Autos, energy, and aerospace are three that come to mind very quickly. Appliances, electronics goods, furniture, and clothing come to mind next.

It’s possible that Wall Streeters are overreacting. In Trump 2.0 trade policy, as in foreign policy, this is as big a shift as has been seen since the Second World War, and the opposition to tariffs may reflect a failure of imagination. This reaction could reverse just as the post-election euphoria reversed, once we all have some evidence to work with. But it’s quite a chorus of disapproval.



For the Bulls:

“Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.” Warren Buffett, Chairperson at Berkshire Hathaway

Welcome to March and good riddance to February! In the end, February was a choppy and frustrating month, but this wasn’t a big surprise, as we wrote about and discussed all month. Are better times ahead? We think so, and March is the month of St. Patrick’s Day so maybe we should expect some green. Let’s get into it.

Not a Surprise, Don’t Panic ​

The second half of February was rough, as worries over the economy, tariffs, Washington drama and geopolitical concerns, and big cap tech weakness dominated the conversation. Here’s the thing. Yes, the year-to-date gains we saw in January might have mostly vanished, but as we’ve noted before, early in a post-election years things tend to be choppy. Not to mention February is a weak month historically, especially in a post-election year. So in a way, this is normal and not a reason to panic. Here’s one way of showing this.



Here’s another angle on the same thing that shows the first quarter of a post-election year is the second weakest quarter out of the entire four-year presidential cycle. In other words, after back-to-back 20% gains the past two years, maybe a well deserved break to kick off 2025 is perfectly normal.

Here Comes March​

In the end, the S&P 500 fell 1.4% in February, but not before a 1.6% jump on the last day of the month, which checked in at the best last day of February since Leap Day in 1988. If things feel choppy, that’s because they have been. The S&P 500 was up in September, down in October, up in November, down in December, up in January, and now down in February. That is the first time in history we’ve seen those six months alternate between green and red and it is the longest such streak of alternating up and down months since seven in a row from February through August back in 2022.

We continue to think the bull market is alive and well and the economy is on solid footing, but that doesn’t mean we won’t have scary headlines or worries. Just two weeks ago we were writing about new highs. That may feel like a long time ago, but really it just happened.

As poor as February is historically (and that played out), it is worth noting that March and April are two of the better months of the year. The past two decades March is the fourth best month and April is the third best month. You should never blindly invest in seasonality, but just as February was ripe for potential trouble, be open to the possibility of a nice Spring bounce.



Looking at March the past four years, the S&P 500 has gained more than 4%, 3%, 3%, and 3%. Of course, in 2020 it lost more than 12% for the worst March ever and worst month since October 2008. Here’s another closer look at election years, which shows February is weak (check), but these next three months tend to be strong.

Panic Is in the Air​

How are you feeling about markets right now? Hopefully because you’ve been reading our blog you know that even the best years have scary headlines and volatility and that volatility is the toll we pay to invest. But we’ve seen historic levels of fear in various investor sentiment polls over the past week, even with stocks less than 5% away from all-time highs.

The American Association of Individual Investors (AAII) Sentiment Survey showed more than 60% bears for only the seventh time in history (going back to when the poll started in 1987). Here’s the catch—those other times we saw this level of fear were times like the 1990 recession and accompanying near bear market; October 2008 and March 2009 during the Great Financial Crisis; and the end of the bear market in 2022. In other words, stocks were down substantially before fear truly spiked, making what we are seeing now truly rare and uncharacteristic.


jog on
duc

 

[ducati916]

Trump and GDP

President Trump's trade war and spending cuts are testing the economy's resiliency. But the economy probably isn't in the midst of the kind of steep contraction suggested by a closely followed model that has made headlines lately. Why it matters: The trillion-dollar question this year is how slumping business and consumer confidence will translate into slower economic activity. While that might happen, most signs point to expansion still underway at the moment. But that's not the signal sent by the Atlanta Fed's GDPNow model, a "nowcast" that uses incoming data to estimate in real-time, current-quarter GDP growth. That model's estimate of first-quarter GDP growth has been in freefall. It now points to a 2.8% rate of Q1 contraction, compared to a 2.3% rate of growth just a week ago. But while risks abound, the situation is probably not as gloomy as the model implies. The intrigue: Preliminary data that showed a historic surge in goods imports pushed GDPNow into negative territory. Businesses trying to get ahead of tariffs might have played a role in the import spike — but that would have been a one-off impact, not an ongoing hit to GDP growth. Moreover, a team of economists at Goldman Sachs say that it was driven by a flood of gold imports that are excluded from GDP "because they are generally not consumed or used in production." The bank believes the economy will grow at a 1.6% rate in the first quarter, lower than its initial forecast but well above what the Atlanta Fed is tracking. The big picture: The exaggerated impact of trade and the whipsaw in growth estimates is a result of how GDPNow is calculated. It's a running estimate of the data released for January that factors into GDP, not a traditional forecast of how the entire quarter might shake out. With two more months' worth of data, first-quarter GDPNow is set to move around some more. There is another reason to believe the downside risk from imports is exaggerated: The drag on GDP from imports will likely be offset by other categories as more data from the quarter is released. For instance, inventory stockpiles would be a boost to GDP. If the goods are sold within the quarter, that would translate into stronger consumption. What they're saying: "None of these measurement issues are relevant to the question of how fast domestic economic activity is actually growing," Lou Crandall, chief economist at Wrightson ICAP, wrote in a note.

Retail Traders

Crypto and stock markets got a brief boost Monday as the president touted a plan to use US taxpayer money to buy a broader range of cryptocurrencies for a theoretical “strategic reserve.”

But they couldn’t hold early gains, thanks in part to President Trump’s threats of tariffs and a big slump in market behemoth Nvidia, which pushed both the S&P 500 and the Nasdaq into negative territory.

It makes you wonder whether the Bank of America analysts who predicted the popping of the “bro bubble” might be on to something.

During the stock market carnage that began February 19 and rolled through most of last week, JPMorgan analysts who keep a close eye on retail trading activity noticed something. In a Wednesday note last week, they spotlighted strong selling of top retail favorites like PalantirPLTR$86.80 (2.84%), alongside strong buying of tried-and-true diversified ETFs.

Analysts used z-scores to indicate the size, in terms of standard deviation, of the waves of buying and selling:

“Over the week, almost entire inflows into ETFs (+$3.4B) were offset by single stocks (-$3.2B). S&P and Nasdaq ETFs continued to dominate the inflows, collectively accounting for $1.5B (+2z). On the other hand, bitcoinBTC $89,887.54 (3.43%)-related ETFs led the outflows (IBIT -1.6z, GBTC -1.2z) as cryptocurrenecy almost erased the entire ‘Trump bump’.

Among single stocks, all sectors were net sold, led by tech (-$1B). PLTR accounted for nearly a half of the outflow (-$480Mn) within tech, marking the largest amount on record since 2015 (Figure 2). Super Micro ComputerSMCI $38.71 (-1.10%) also contributed meaning outflows (-2.5z).”

It’s worth noting that the last time Palantir was getting badly beat up in the markets, back in January, JPM analysts reported that retail traders flocked to buy the dip in the data analytics and software company, as well other favorites. That suggested widespread retail confidence in a market recovery. (To be clear, Palantir is bucking the broader trend today, posting a solid gain.)

But during the latest downturn, for whatever reason — policy uncertainty, weakening economic data, tariffs, or broad worries about the sustainability of the AI trade — the rampaging animal spirits that emerged after the president’s election last November have evaporated.

Of course, that doesn’t mean the market is doomed. It could just be that stocks, which were reaching fairly high levels of valuation at more than 22x forward earnings, were in desperate need of a sell-off, before it consolidates and moves higher.

It’ll be interesting to keep watching retail traders to see what their confidence level is that the postelection rally can be revived.


0DTE Options Trading


Early evidence to that point had suggested “probably.” Thanks to new data from Cboe, we can upgrade that answer to an unequivocal “yes.”

In February, the first full month in which Robinhood offered trading in S&P 500 options, average daily volumes rose to a record 3.49 million, and 56% of that activity took place in options due to expire that same day (aka 0DTE) — also a record.



Source: Cboe
“The jump in 0DTE volumes is partly a function of higher intraday volatility, but mostly a result of expanded access with Robinhood rolling out index options trading to all its customers in late Jan,” wrote Cboe’s Mandy Xu, head of derivatives market intelligence.

Doomsayers have suggested that the plethora of 0DTE options trading could turn a molehill for the stock market into a mountain, a claim that seems a little over the top on the glass-half-empty side of the spectrum. But on a more neutral note, the popularity of these contracts can certainly have a noticeable impact on intraday trading patterns.

“Looking at annualized trading revenue, Legend is now up to $50 million and index options are up to $15 million and both are showing nice incrementality and strong week over week growth rates,” Robnihood’s chief financial officer, Jason Warnick, said on the February 12 conference call that followed the earnings release.




Full:https://www.rcmalternatives.com/202...etric-investing-when-imbalance-beats-balance/

Skew and kurtosis



Full:https://mailchi.mp/verdadcap/skewness-and-kurtosis?e=513c9c4eac

Just saying:

2006: "Let's pretend people making $7/hr can afford a $400k house to trick pensions into buying AAA-rated subprime MBS"

2025: "Let's pretend US debt/GDP is not 120% so we can trick pensions into buying AAA-rated USTs at 4%"

Purists: "But the US can print money!"

Gold: "I know"

Atlanta Fed Real GDP from 4.1% to -1.5% in 4 weeks.

Last 3 recessions saw US deficit/GDP rise by 6% of GDP, 8% of GDP, & 12% of GDP. That would be a $1.6t, $2.1t, & $3.2t INCREASE in the deficit in US recession.

So too much" DOGE = deficit up $1T+. Thank you for playing.

Today's number is... 2021

My Risk-On/Risk-Off ratio has sharply declined recently and returned to levels when the ratio peaked and fell into a consolidation period back in 2021.

Here’s the chart:

Let's break down what the chart shows:

• The black lineis my Risk-On/Risk-Off ratio.
  • The Risk-On components consist of Copper (HG1), High Yield Bonds (JNK), Aussie Dollar (AUDUSD), Semiconductors (SOXX/SPY) & High Beta (SPHB/SPY).
  • The Risk-Off components consist of Gold (GC1), US Treasury Bonds (TLT), Yen (JPYUSD), Utilities (XLU/SPY) & Staples (XLP/SPY).

The Takeaway: Investors are experiencing fear and pessimism, as bearish sentiment dominates the surveys. The US market is beginning to mirror this mood, showing a preference for a Risk-Off environment. This is reflected in my Risk-On/Risk-Off ratio, which has returned to a key level of importance where we saw NYSE breadth reach its peak in 2021.

Will this resistance level, which has turned into support, continue to act as support, or will this ratio break down?

For me, this looks to be a pivotal moment for the US as the components of the Risk-Off index are gaining strength and now appear ready to break out from a 5-year downtrend line. Meanwhile, the components of the Risk-On index are at the lower bounds of a multi-month range and seem poised for a breakdown.

While there are still opportunities in the market, which JC has been pointing out, it’s important to be selective instead of broad-based buying. My Risk-On/Risk-Off ratio suggests that now is not the right time for an aggressive strategy.








US needs a weak USD.

Trouble could reside in a too strong Yen and carry trade unwind.

More Trump

President Trump wants to will the country back into the "golden age" he promised on the campaign trail, the headlines be damned, Axios' Marc Caputo writes.

• "America's momentum is back. Our spirit is back. Our pride is back. Our confidence is back," Trump said in his first address to Congress of his second term.

Why it matters: This was a record-breaking 100 minutes of the world according to Trump — an address largely indistinguishable from a campaign-style speech. He recited the historic number of executive orders, touching every aspect of American life from immigration to sports.

To thunderous applause from his party, Trump announced a new office of shipbuilding in the White House, to help "resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding," with "special tax incentives to bring this industry home to America, where it belongs."

Trump pledged to fulfill his "no tax on tips" campaign trail promise to service-sector workers, and called for car loan interest payments to be tax deductible — if the car was made in America.

Trump declared peace in Ukraine was closer than ever now that its president, Volodymyr Zelensky, wrote him a letter that said he was ready to negotiate.

​

Rep. Al Green (D-Texas) shouts during President Trump's address. Photo: Photo: Mandel Ngan/AFP via Getty Images
Reality check: Trump will have a nearly impossible time balancing the budget, as he promised, and cutting taxes. And the economy shows troubling signs: Trump was unmoored from plummeting stock prices, sagging consumer confidence and the specter of rising prices due to tariffs.

• "There'll be a little disturbance," Trump seemingly ad-libbed about 50 minutes into the speech. It was his clearest acknowledgement that times might be tough.

Flashback: The contrast with Trump's first address to Congress, in 2017, was notable.

• Trump in 2017: "The stock market has gained almost $3 trillion in value since the election on Nov. 8th, a record."
• Trump gave no similar stat this time. As of Monday, the stock market had shed all of its $3.4 trillion in post-election gains.

Staying largely on-script, Trump made a few jokes and took a few swipes at Democrats. But for a politician who has a tendency to give dark and grievance-filled speeches, this was his version of the positive future he promised.

• "This will be our greatest era," Trump promised. "My fellow Americans, get ready for an incredible future because the golden age of America has only just begun."
• Democrats seldom applauded, including when Trump announced the arrest of the mastermind behind the deadly Abbey Gate attack in Afghanistan in 2021. Some Democrats walked out on Trump during the speech. And one, Rep. Al Green of Texas, was forcibly removed from the House chamber for repeatedly interrupting Trump.

Some early evidence out this morning indicates trade policy is making businesses slower to hire.

Why it matters: Big-picture measures of economic activity remain solid, but fast-developing White House policy — like on-again, off-again tariffs — is rattling employers.

• As tariffs and spending cuts ripple through the economy, it's still unclear whether softer data will remain limited to surveys of business and consumer sentiment or lead to a more meaningful slowdown.

Driving the news: Private sector employers added just 77,000 jobs last month, less than half the gains in January, according to payroll processor ADP.

• "We are seeing a measurable decline in higher end sectors of the economy," ADP chief economist Nela Richardson told reporters this morning, calling out "hiring hesitancy" as companies assess policy shifts.
• "We have data going back to 2010 that suggests there are times in the market when employers respond to a level of uncertainty in the form of slower hiring," Richardson added.

Between the lines: The ADP report is not meant to preview what the all-important payrolls report might show when it's released Friday.

• It is, however, among the non-survey-based indicators hinting that policy uncertainty — particularly around what to expect on the tariff front — might be denting the labor market.
• The sector that would show spillover from Department of Government Efficiency layoffs into private sector contractors is professional and business services, which actually added 27,000 jobs, ADP said.

The Institute for Supply Management's monthly survey out this morning showed that the U.S. service sector accelerated in February, with sharp rises in its indexes for both new orders and employment.

• But comments from survey participants paint a more muddled picture.
• "Tariff actions have created chaos in information and pricing measures, forecasting and forward buys, which may artificially inflate purchases to be followed by a drop off," said one unnamed survey respondent from the accommodation and food services industry.
• "Business seemed to pop after the election, but uncertainty after the election seemed to take the 'wind out of our sales,' with uncertainty again increasing," said a firm from the professional, scientific, and technical services sector.

Reality check: Not every soft patch in the data is a sign the economy is making a meaningful turn.

• "We've seen other times where there was a slowdown in hiring as employers assess the lay of the land and quickly reversed," Richardson said.

jog on
duc

 

[ducati916]

MSFT



Full:https://www.wheresyoured.at/power-cut/


From JC:

Please tell me you're paying attention to what's going on.

Are you looking? Are you listening?

Are you taking notes?

This is what bull markets are like. This is literally what happens in every bull market.

Stocks go up. But people keep telling you why they'll stop going up.

More and more stocks go up, and then people tell you that breadth is weakening.

More countries and more groups of stocks join the bull market and start to go up too, and then they tell you that it's a bubble and is not sustainable.

More stocks than ever go up, and they tell you that it's a parabolic melt up, and just you wait....

I hope you're paying attention.

Europe is hitting new all-time highs. Hong Kong is hitting new highs. The US Indexes hit new all-time highs 2 weeks ago, and are just a few points below those levels.

Yet despite all of that, we're seeing bearish extreme readings that have rarely ever been seen before in history.

This is what a bull market feels like.

I've been through them. I've fought some of them. I learned all this all the hard way. By paying attention. By making dumb mistakes along the way.

The bottom line is this: Stocks go up in bull markets. People just don't want to embrace it.

Textbook.

So we're thrilled about it obviously because as we discussed on Monday night,we've been buying the crap out of these China stocks, and Europe and Industrials and so many other areas that are working so well this year.

Buying stocks during bull markets is historically a sound strategy, particularly when sentiment is this bearish.

So that's what we've been doing.

Why would we do anything else?

• The Magnificent 7 ETF ($MAGS) closed below support at $50 yesterday after filling its post-election gap. However, it reclaimed support today, signifying a potential Failed Breakdown, or Bear Trap as it's also called.
  
• Dylan reminds us that failed moves often lead to fast moves in the opposite direction, which, in this case, is higher.
  
• $MAGS represents nearly 30% of the S&P 500 and nearly 40% of the Nasdaq. If the largest stocks in the market start to rebound, the major indices will likely follow.
  

The Takeaway: The Magnificent 7 ETF ($MAGS) reclaimed support after briefly undercutting it yesterday. If $MAGS is above $50, the bears are trapped.


The past couple of weeks have been rough.

Volatility is rising, and key groups are testing major levels—making me question just how bullish this market really is.

It feels like decision time.

Either this bull market holds, and we continue to spend our time looking for stocks to buy…

Or sellers take control and change the market’s character, and we start looking for stocks to sell.

When markets reach an inflection point, it’s always a good idea to check in on the biggest names.

These are the stocks investors want to own. The ones hedge funds anchor their portfolios with.

These are the bellwethers and the roadmap for everything else.

The Roundhill Magnificent Seven ETF $MAGS is probably the best way to track them.


After a 17% pullback from the highs, price is now testing its breakout level from last July.

This is a logical place for buyers to step in and repair some of the damage. But more importantly, a cluster of key technical levels are stacking up here.

Let’s break it down:

• Polarity level – former resistance turning into support.
• VWAP from ETF inception – an institutional level of interest.
• 200-Day Moving Average – level of interest for trend following models.
• Upward trendline – defines the current rate of trend.

All of these converge around the 50 level, making it a critical zone of support.

If price holds, the uptrend remains intact and the bull market remains alive.

However, if it fails, it will mark a major shift in character and a fresh leg lower from these names will begin.

This is the line in the sand. How the market reacts here will set the tone for what comes next.

If we lose these key names, it’s hard to imagine the rest of the market holding up.

I think it's time to tighten up our stop levels and stay cautious until the data proves us wrong.


Today, we made a checklist of the most important charts in the market.

We came up with about 20 key levels that, if broken, would suggest the end of the bull market.

Our list covers things from the major averages to crypto, and even some commodities and relative ratios.

There are so many big levels being tested right now. In many cases, they are the prior-cycle highs, which means violations will result in some nasty failed breakouts.

We’re going to track them all closely and weigh the evidence. As more and more of these levels give way, we will turn increasingly bearish.

But, for me, one chart matters so much more than the rest over the short-term. Actually let’s just call it three, since it is the same situation for all of them.

Here’s a look at the S&P 500, Nasdaq 100, and Dow Industrial Average all digging in at their VWAPs from the August lows. These are the most important stock market indexes in the world.


They are all testing crucial support and rebounding in synchrony.

We’ve seen this story before. This won’t be the first time any of these indexes are bouncing off their VWAP from the August 5th volatility spike. In the case of DIA, this will be the fourth or fifth successful test.

This has been the line in the sand for US equities since the back half of last year, and this week’s action tells us it still is.

We need to see a follow-through day tomorrow to confirm these bullish candlestick formations. That should be enough to put the market back in rally mode for now.

We dipped our toes in and got long a discretionary stock via Breakout Multiplier today. We also sold a double in some international calls we just bought yesterday. I’ve unlocked that trade, and you can read it here.

We’ll be putting more longs on if tomorrow and Friday go well.

Despite what’s been a rough month for the broader market, we’ve been selective and have posted some huge gains recently. We’re going to keep running that same playbook.





jog on
duc

 

[ducati916]

• The Nasdaq ($QQQ) officially broke its 200-day moving average for the first time in two years today, closing at a four-month low.
  
• However, one of its largest components, Broadcom ($AVGO), is up +12% after hours following a strong earnings report. $AVGO is the 5th largest stock in $QQQ and the 8th largest in $SPY.
  
• Jamie points out that $AVGO was on life support heading into today's report. It's just one stock, but Semis can't afford to lose another leader. A negative reaction would've been the nail in the coffin for Semis, but $AVGO has refused to break down so far.

The Takeaway: The Nasdaq broke its 200-DMA for the first time in two years. However, its 5th largest component is up double digits after-hours. If $AVGO holds its gains tomorrow, it could spark a bounce in Semis, Tech, and $QQQ.



jog on
duc

 

[rolly1]

The NFP tonight will be the big factor in the direction I think.

 

[ducati916]

Oil News:

Friday, March 7th, 2025

Canadian tariff drama, fears of OPEC+ production returning to markets, Trump’s maximum pressure on Iran, and a US-China trade war – this week seemed to have it all. Oil prices tumbled through the week but then started to recover early on Friday morning. With flattening backwardation prompting the Saudis to cut prices, the initial shock of Trump’s first month is giving way to a more nuanced approach with ICE Brent futures trading around the $71 per barrel mark.

Trump Delays Mexico Tariffs for A Month. In contrast to worsening US-Canada relations, the White House has postponed tariffs on most imports from Mexico until 2 April following President Trump’s call with his Mexican peer Claudia Sheinbaum, allowing US refiners to continue their heavy crude imports.

Iraq’s Kurdish Dream Has Failed Again. Baghdad’s political push to restart pipeline flows from Kurdish-controlled regions to Turkey’s port of Ceyhan has run aground again, after Iraq’s $16 per barrel price offered to oil companies currently drilling in Kurdistan failed to entice sufficient interest.

BlackRock Buys the Panama Canal. US investment giant BlackRock (NYSE:BLK)agreed to buy two major ports on the Panama Canal and ancillary infrastructure from Hong Kong-based CK Hutchison for $22.8 billion, in line with President Trump’s demands that Panama cut Chinese influence at the canal.

Chinese Oil Imports Slump as Sanctions Affect Buying. Chinese crude oil imports averaged 10.38 million b/d in January-February 2025, marking a 5% year-over-year decrease, as recent US sanctions on Iranian and Russian tankers disrupted deliveries to the northeastern Shandong province.

Venture Global Doubles Down on Plaquemines. US LNG developer Venture Global (NYSE:VG) said it would expand the aggregate production capacity of its 27 mtpa Plaquemines LNG plant in Louisiana to 45 mtpa, eyeing additional 24 trains in the project’s third expansion phase at a cost of 18 billion.

Saudi Arabia Drops April Oil Prices. Saudi Aramco (TADAWUL:2222), the world’s largest oil exporter, cut its formula prices for April-loading cargoes into Asia with Arab Light now priced at $3.50 per barrel above Dubai, the first downward move in three months as the market anticipates the unwinding of OPEC+ cuts.

US Withdraws from Coal Divestment Alliance. As announced by US Treasury Secretary Scott Bessent, the United States will withdraw from the International Partners Group, a global coal divestment initiative, leaving South Africa with a more than $1 billion financing gap to decommission coal plants.

Copper Soars to 4-Month High. Copper prices gained this week after US President Trump waived carmakers from tariffs and China’s National Congress doubled down on stimulus measures, sending the LME three-month contract to its highest since early November 2024, above $9,700 per metric tonne.

Ireland Eyes First LNG Terminal. The government of Ireland has approved a plan to develop an emergency LNG import facility, to be used as a floating strategic gas reserve, less than two years after Dublin rejected an application to build an LNG terminal on climate grounds.

Trump Administration Flags $20 Billion SPR Spree. Whilst touring the Plaquemines LNG facility in Louisiana, US Secretary of Energy Chris Wright stated that he plans to seek up to $20 billion in congressional funding to refill the US Strategic Petroleum Reserve, equivalent to 295 million barrels.

Defying Trump Fears, Canada Wants More US Pipes. Canada’s midstream giant Enbridge (NYSE:ENB) has allocated $1.4 billion to boost the throughput capacity of its main US-bound oil conduit Mainline by an additional 300,000 b/d over the next three years, with 2024 flows averaging 3.1 million b/d.

Indonesia Dreams Up Refining Boost. The government of Indonesia announced its plan to build a new 530,000 b/d refinery at a cost of $12.5 billion, seeking to end a protracted period of import dependence as Jakarta is not being able to cover roughly 40% of oil and 42% of products demand.

Russia Plays Down OPEC+ Expectations. Monday’s OPEC+ meeting where output-cutting members reiterated their plans to unwind production curbs from April shed some $3/bbl from oil prices this week, prompting Russian Deputy Prime Minister Novak to state that OPEC+ could reverse the unwinding after April.

East African Nations Crave More Drilling. Tanzania announced it would launch its 5th oil and gas licensing round in May, offering 26 exploration blocks most of which would be located offshore in the Indian Ocean, seeking to build on past discoveries that built some 57 Tcf of natural gas reserves.

Jobs Report

The labor market is showing signs of underlying softness, just as the Trump administration implements policies that could further scare employers. Why it matters: The white-hot hiring environment of a couple of years ago is long gone. While unemployment remains low and companies keep adding to payrolls, there are emerging signs of weakness, even before the impacts of historic trade disruption and potential wide-scale spending cuts. By the numbers: The economy added 151,000 jobs in February, similar to the average monthly gain of 168,000 over the past 12 months. That offered a bit of relief to markets after whispers on Wall Street that a big deceleration could be afoot. The unemployment rate ticked up to 4.1%, still a historically low level of joblessness. But the details of why were bad. Between the lines: About 380,000 workers left the labor force last month, while almost 590,000 fewer workers reported being employed. The employment-to-population ratio among prime-age workers, those between 25 and 54 years old, fell 0.2 percentage point to 80.5%. The broadest measure of unemployment, which includes people who want a job but have given up looking, or are working part-time but want full-time work, spiked to the highest level in three years, to 8% from 7.5%. What they're saying: There was a "palpable sense of relief" at the solid numbers, wrote Economic Outlook Group chief global economist Bernard Baumohl. "What looms ahead, however, is troubling for the labor market." "Even in February's employment release there are telltale signs we need to prepare for hiring conditions to significantly weaken in the coming months," he added. Of note: Early effects from the Elon Musk-led Department of Government Efficiency might be showing up in official data. The federal government shed 10,000 jobs, the most since June 2022 — though that was completely offset by a payroll gain of 21,000 in state and local government. "There are a lot of things that President Trump's policies haven't really been able to change yet, but the actions that he has taken in the first few weeks are quite visible in the jobs report," said White House economic adviser Kevin Hassett told reporters this morning. "He's taken action to reduce federal government employment, and we saw that in the jobs report. So that's something that you can definitely attribute to President Trump's policies," Hassett said.

VIX Trick from JC

Today I'm going to share a little trick that I like to use to help put the current market volatility into perspective. The math is like this. I take the value of the VIX and divide by 16. And that's what the market is pricing in for a normal daily move. For example, if the VIX is at 24, then I would expect a 1.5% move in the S&P500 each day.

​

So if the VIX is at 16, then I would expect a 1% move. If the VIX is at 32, then I would expect a 2% move. Simple. Now, many people wonder why it's 16, and that's where we get way above my paygrade. If you don't understand how the math around options works, don't worry. No one else does either. I'm not even joking. Options math is next level impossible. Just ask any of the best options traders. They'll be the first to tell you. The 16 number I believe has something to do with the square root of the number of trading days in a year, but I'm confident there's more to it than that. Also, for you statistics majors, I believe there is technically like a 67% probability of these results, or something along those lines. So keep in mind that The Rule of 16 is just a back of the napkin tool to keep life simple and help put things in perspective. It's not meant to be an exact science. For the exact science, here's the bible. All I can say is - good luck with that. I'll stick with the simple stuff. So what we want to do is take this and make it part of the overall weight of the evidence. Then we want to apply it to current markets to help us decide what we want to do in this current environment.

The Return of 'flippe-floppe'?

President Trump is building a reputation as the flip-flopper in chief — the president who, after announcing a bold new policy today, might well reverse it tomorrow, Axios' Felix Salmon and Zachary Basu write.

• Why it matters: In a chaotic world, the federal government normally acts as a stabilizing force. Under Trump, it's driving chaos.

The big picture: Across-the-board tariffs on Mexico and Canada — two of America's three largest trading partners — have been on and then off, then on and then off. Colombia knows the feeling.

• The government put 80 million square feet of its real estate up for sale, only to then take the "for sale" sign down.
• Trump has fired federal employees at the CDC, the FDA, the National Nuclear Security Administration and the Agriculture Department, only to then re-hire them.
• He touted the use of military aircraft to carry out high-profile deportations, only to suspend the flights after finding them costly and inefficient.

In a matter of days, Trump denounced Ukrainian President Volodymyr Zelensky, then made up and invited him to Washington — then chastised him in the Oval Office, then expressed openness to rebuilding ties, then cut off arms and intelligence sharing.

Republicans in Congress have repeatedly found themselves boxed in by Trump's flip-flops.

• He spent weeks equivocating on whether Congress should pass his agenda in one bill or two — then blindsided the Senate by backing House Republicans' one-bill approach.
• He promised not to cut Medicaid, then backed a House GOP budget plan that could force exactly that in order to meet its proposed spending cuts.
• He has vowed to achieve the unthinkable by balancing the budget— while endorsing trillions of dollars in tax cuts, plus new campaign promises for no tax on tips or overtime.

Data: Financial Modeling Prep. Chart: Axios Visuals
Follow the money: The stock market is tiring of such shenanigans. On Wednesday, stocks fell on news that tariffs were being imposed. Yesterday, when those tariffs were suspended, stocks fell again.

• "I'm not even looking at the market," Trump told reporters in the Oval Office yesterday, disavowing his longtime favorite metric for economic success.

Zoom out: In crypto, a rug-pull is any project that's announced and then abandoned — often at great expense to anybody who believed the initial announcement.

Between the lines: Elon Musk — who may or may not be the head of DOGE, depending on who you ask — is at least partially responsible for the administration's "move fast and break things" ethos.

• "We will make mistakes. We won't be perfect. But when we make a mistake, we'll fix it very quickly," Musk said in a Cabinet meeting last week, pointing to the reversed cancellation of Ebola funding.

Buy your local economist a drink: The economic backdrop is more chaotic and uncertain than it's been in years — a result of fast-moving and sometimes vague Trump policy, Axios Macro co-author Courtenay Brown writes.

• Why it matters: A growing list of factors driven by President Trump — think tariffs, spending cuts and a looming government shutdown — is threatening to put downward pressure on the economy.

The big picture: America's economy has defied naysayers, but there's no guarantee that continues.

• Forecasters are writing GDP and inflation estimates in pencil, warning that their models can't possibly account for all the ways the jumble of policies could net out.
• "It's really drinking from a fire hose at this point," Brian Gardner, chief Washington strategist at Stifel, tells Axios. "Trying to understand where things are going is unusually difficult, historically difficult."

Five factors are raising question marks about what's ahead for the economy:

1. Trump's epic trade war. The longer the North American and U.S.-China trade war lasts, the more damage it could inflict on the economy.

• Trump said automakers would get a month-long reprieve from 25% tariffs on goods from Canada and Mexico.
• More tariffs are on the horizon in the weeks ahead, including reciprocal tariffs on April 2 that Trump has called "the big one."

2. DOGE spending cuts. Tens of thousands of federal workers have been fired or taken a buyout, with more layoffs to come, though some efforts have been halted by federal judges.

• Government employees make up a small share of the overall workforce, but the effects of nixed contracts could ripple out to the private sector.

3. Shutdown threat. Congress has until March 14 to pass a bill to fund the government or risk a shutdown.

• Republicans want to pass a budget that chops spending to pave the way to enact Trump's fiscal agenda — a difficult task without cutbacks to politically sensitive (and expensive) entitlement programs.

4. Tax cuts: Some CEOs say the extension of Trump 1.0 tax cuts could offset potential economic weakness from the trade war.

• Concerns about blowing out the deficit might hamper that effort.
• The price tag is ballooning. In a congressional address, Trump called for no tax on tips, overtime or Social Security benefits. He pitched tax-deductible interest payments on loans for U.S.-made cars.

5. Immigration: The construction industry has warned about the potential double-whammy from deportations that could dent labor supply.

1 big thing: The world's Trump adjustment

Data: FactSet; Chart: Axios Visuals America's fraying relationship with longtime allies is driving global economic shifts that were unthinkable just months ago. Why it matters: Policy changes in the U.S. are rippling beyond its borders. Some of the world's biggest economies are in the midst of their own policy regime changes — pledging investments and adjustments in response to Trump that could outlast him. In Europe, the catalyst is the Trump administration's threat to pull back U.S. protection of European Union borders, as well as looming tariffs that could crush the already-ailing economy. The intrigue: Europe is racing to adjust with plans that will play out over decades — a type of response not seen in Trump 1.0. Trump took office just as European leaders acknowledged the need for changes to reinvigorate its stagnant economy. But it also might be a sign of leaders expecting that Trump-style policies might stick even after he leaves office. What they're saying: "Whereas Trump's first four years the Europeans viewed him as an accident, I think they see now he's no accident," Gordon Sondland, the former U.S. ambassador to the EU under Trump, tells Axios. What's new: Germany's likely next chancellor, Friedrich Merz, announced plans to loosen the so-called "debt brake" that capped the deficit at 0.35% of GDP. This would let the country borrow billions for defense and infrastructure spending. "In view of the threats to our freedom and peace on our continent, the rule for our defense now has to be 'whatever it takes,'" Merz said at a press conference this week. Merz invoked an economically significant phrase for Europe: In 2012, then-European Central Bank president Mario Draghi said he would do "whatever it takes" to save the euro amid a debt crisis. For proof of the historic nature of Germany's shift, look to the response in the bond market: Yields on the 10-year bund jumped more than 30 basis points in a single day, raising the nation's cost of borrowing. What to watch: The scale of investment could help transform Europe's largest economy at a perilous time. It has been contracting since 2023, and Trump's proposed tariffs — set to take effect next month — could wreak havoc on its manufacturing industry. "Europe is being rocked by giant Trump shocks that have generated an equally massive response," Evercore ISI's Krishna Guha wrote in a client note yesterday. "These are weeks when decades happen," Guha adds.

Probably about time to 'BTD' for a swing trade.



Uber Bull



Makes sense.



LOL.



jog on
duc

 

[ducati916]

There are some real issues with the analysis in this.


______________________________________________________________________________________***


So after watching the TCAF, consider these 4 charts:



What strikes you as seriously wrong?

jog on
duc

 

[divs4ever]

yes but how long had 'private GDP ' been below -3% ?

i suspect maybe years ( and not just in 2020-2021 )

i bet this data had been suppressed and distorted for quite a while

 

[ducati916]

The things that are wrong:



(i) Tariffs are supposed to result in a stronger USD. Currently we have a collapsing USD.
(ii) Therefore the resulting inflation, rather than being externalised to foreign sellers, is being internalised to the US consumer.
(iii) If inflation is rising, but the 10yr is falling (rates) through an increased price, how long before this reverses and 10yr rates rise?
(iv) $MOVE is indicating this dichotomy currently, rising with a falling USD.



Then we have the stock market: the stock market is falling from foreign selling. How do we know this?

The IEEPA memo's from Trump have resulted in foreign buyers of US stocks, being forced to sell and leave. They hold +/- $5 Trillion in US stocks. This is likely part of the reason for the current sell-off.

What is IEEPA?

IEEPA: For instance, the International Emergency Economic Powers Act, signed into law by President Jimmy Carter in 1977, gives the President sweeping powers over international transactions in response to foreign-origin threats “to the national security, foreign policy, or economy of the United States.”18 Such powers include the ability to limit or prohibit transfers of credit, payments or securities internationally.19 The Act is an important foundation of Treasury’s sanctions powers and financial extraterritoriality.

IEEPA can also be used to disincentivize the accumulation of foreign exchange reserves, if the Administration wills it. If the root cause of dollar overvaluation is demand for reserve assets, Treasury can use IEEPA to make reserve accumulation less attractive. One way of doing this is to impose a user fee on foreign official holders of Treasury securities, for instance withholding a portion of interest payments on those holdings. Reserve holders impose a burden on the American export sector, and withholding a portion of interest payments can help recoup some of that cost.

Some bondholders may accuse the United States of defaulting on its debt, but the reality is that most governments tax interest income, and the U.S. already taxes domestic holders of UST securities on their interest payments. While this policy works through currencies as a means of affecting economic conditions, it is actually a policy targeting reserve accumulation and not a formal currency policy.

Full:https://www.hudsonbaycapital.com/do...o_Restructuring_the_Global_Trading_System.pdf

A falling stock market = falling tax receipts = higher deficits
A falling stock market = falling consumer spending = falling GDP = recession = even higher deficits.

So as foreign powers repatriate NASDAQ and S&P500 cash, where does it go?
It will largely flow to gold.

There has been any number of charts comparing Trump 1.0 to Trump 2.0. Also Trump pre-election trumpeted what he was going to do. China was prepared. China has offset the tariffs through selling US stocks, which has weakened the USD, which has transferred the resulting inflation away from them and back to the US.

Trump and Bessent have been highly vocal in wanting the USD lower and 10yr UST lower. Reversing capital flows does exactly that.

The resulting inflation and economic slowdown that that entails will have significant issues in due course.


jog on
duc

 

[divs4ever]

(iii) If inflation is rising, but the 10yr is falling (rates) through an increased price, how long before this reverses and 10yr rates rise?

coupon rates or yield rates ?

yield rates rise ( without an accompanying rise in official rates ) because there are less people/instos buying your bonds/notes/bills and you have to sell below the face value ( par )

falling ( yield ) rates in front of expected ( hoped for ) official rates cuts are holders declining to sell locking in current returns ( which are better than expected future offerings , especially if closer to maturity )

ALSO SOME international bond buyers will worry about future financial sanctions being placed on them

ALSO some international bond buyers , buy US ( and other sovereign bonds ) as an effective place to park their US Dollars after selling goods/commodities to the US

so IF imports reduce ( and that is likely under Trump tariffs ) there will be reduced international buying of US bonds

now is that a bad thing ?

if the US is forced to default .. ( and that is possible whether a hard or soft default ) more local holders eating the pain is probably more palatable than the foreign investors getting burnt and ruining future investment streams

a soft default could include extending the maturity dates , a reduction of coupon payments ( and/or delaying the payment of coupon payments ) and even a straight 'haircut ( say slash 20% off the face value and resultant coupon payments )

all very uncomfortable , but then the US has an uncomfortable amount of debt , somebody is going to be forced out of their comfort zone

 

[divs4ever]

So as foreign powers repatriate NASDAQ and S&P500 cash, where does it go?
It will largely flow to gold.

i am wondering if some of the cash from maturing bond/bills is also flowing into gold ( rather than more bonds or shares )

 

[ducati916]

From JC;

Wow what a week to be an investor in stocks. The broadening of participation all over the world continues. Meanwhile, the pessimism is stronger than ever. I'm noticing the most angry of people are the ones who want stocks to fall because they don't like the Trump and all his buddies. But their anger is not the market's concern. If anything, it's just more fuel to drive stocks much higher, which would enrage them even more. It's pretty hilarious to watch actually. Laughing is good for you. But laughing at people who haven't bothered to count and actually see how well stocks are doing, is all the more amusing. You know, you can dislike Trump, and still recognize how strong this bull market continues to be, and how much stronger it's getting week over week. Here is one of the most important stock market indexes in the world. I would argue that after the S&P500, Dow and Nasdaq, this one is right there behind it, and arguably right along there with it in the same category of importance. EFA represents developed markets outside of North America. So think a ton of European stocks, United Kingdom, Japan and Australia. New 18-year highs this week after completing this multi-year base:

​

Now, when you dig down to see what's inside a lot of these indexes, you'll find a ton of exposure to the Financial sector, more than you might expect. If the world was about to come to an end and stocks were completely falling apart, the European Bank index fund would not be breaking out to new all-time highs. And that's exactly what's happening:

​

This was the greatest week ever for Developed Markets Ex-North America relative to the S&P500. This is literally the definition of rotation. Best week ever:

​

If we were about to enter into a global recession, and there are real issues in the stock market, would Germany be making new all-time highs? Would China be breaking out of a multi-year base to new multi-year highs? The answer is no. All this strength means is that this bull market is getting broader, stronger and with more upside participation:

​

You can fight this sort of thing if you want. But historically, during bull markets it pays much better to be buying stocks, not selling them. Go back and see for yourself. It's crazy that with how well stocks are doing, market sentiment is down in the dumps. Money Market funds just hit $7 Trillion. How is that even possible? Money is flowing faster than ever into cash, just as more stocks than ever are going up in price. Meanwhile, when you check in on individual investors in America, we're seeing some of the most pessimistic readings in stock market history. The only other times you can compare this to, is after massive declines and near the end of bear markets. We're just a few % points away from all-time highs in the major U.S. Indexes, and more countries than ever are now participating in this bull market. In fact, with investors getting more and more scared with each week that goes by (we have the data), you actually saw fewer stocks on the NYSE closing this week at new 52-week lows than you got the week before. And last week's new lows readings were actually fewer than the January spike. So literally, the market continues to improve week over week, and it's only getting stronger, yet investors are just getting more angry and more scared. The ones who are scared about the Trump and what they're doing in Washington are leading the charge of anger and frustration. We love that. The more pessimistic these folks get, the stronger the next leg higher for this bull market is likely to be. So thank you angry folks. We are forever grateful. Just yesterday we took profits on two more long positions that just doubled. The doubles continue to come again and again.

President Trump's dismantling of the U.S.-led global order has injected deep uncertainty — and perhaps fresh opportunity — into China's timeline for a potential invasion of Taiwan, Axios' Zachary Basu reports.

• Why it matters: U.S. officials have long been fixated on 2027 as the year Xi Jinping would be ready to move on Taiwan, citing military modernization goals tied to the 100th anniversary of the People's Liberation Army.

Trump — while acknowledging a Chinese invasion would be "catastrophic" — has been purposely opaque about whether the U.S. would defend Taiwan in such a scenario.

• "I never comment on that," Trump said this week when asked if it was his policy that China will never take Taiwan by force. "I don't want to comment on it because I don't want to ever put myself in that position."

​

Screenshot via X
Beijing has stepped up its saber-rattling toward Taiwan, pledging at the annual National People's Congress this week to "firmly advance the cause of China's reunification" and boost defense spending by 7.2%.

• In a sign of mounting tensions, China's embassy in the U.S. warned this week that "if war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we're ready to fight till the end."

The big picture: U.S. presidents have had a long-running policy of "strategic ambiguity" on the question of military intervention to protect Taiwan. But under Trump 2.0, it has become a true mystery.

• Trump's approach toward Ukraine has dispelled the notion that he would defend Taiwan solely for the sake of shielding a democracy from authoritarian aggression.

Zoom in: Unlike Ukraine, Taiwan plays a pivotal role in the global economy, with its crown jewel chip-maker, TSMC, manufacturing more than 90% of the world's most advanced semiconductors.

• Global dependence on TSMC has long been considered a powerful deterrent against Chinese aggression, but Trump has treated the company's dominance as a personal affront.

"Taiwan took our chip business away," Trump told reporters last month. "We had Intel, we had these great companies that did so well. It was taken from us. And we want that business back."


Stephen Miller — who is both White House deputy chief of staff for policy and President Trump's homeland security adviser — has amassed a historic portfolio of West Wing power. On top of that, a legal group he co-founded is helping drive policy changes from the outside, through legal complaints and lawsuits against corporations, Axios' Alex Thompson writes.

• Why it matters: Miller is a central architect of Trump's "flood the zone" strategy for sweeping transformation. America First Legal, which Miller co-founded after serving as a senior White House adviser in Trump's first term, is helping carry out his mission to make DEI programs illegal — on the argument that they violate the civil rights of white people.

America First Legal has been aggressively filing complaints and lawsuits to try to make the federal bureaucracy comply with the new president's executive orders.

• The group has become a private enforcement arm of the White House's assault on DEI — or as it has billed itself, a right-wing version of the ACLU.

In early February, the group petitioned the Education Department to investigate five school districts in Virginia for allegedly not complying with Title IX, which doesn't allow sex-based discrimination.

• The group petitioned the Labor Department to investigate whether outside federal contractors are following Trump administration rules.

America First Legal also has been filing and threatening lawsuits against corporations — including Apple — over their DEI policies.




Paraphrasing FDR, there is an argument that we have nothing to fear from tariffs, save tariff fear itself. There are arguments that the cost might not be that high, but forecasting is maddeningly difficult because US policy is so inconsistent. Thursday, the US lifted the 25% tariffs on Mexico and Canada three days after it imposed them. This was what many wanted to hear, but amped up the uncertainty and volatility surrounding trade policy.

The cost of tariff uncertainty is growing very visible, most clearly in a continuing sell-off for US stocks, which has now left the Nasdaq Composite down more than 10% from its recent peak (the popular definition of a “correction”). The Bloomberg Magnificent 7 index, including the dominant tech groups, is down 16%, and has just dropped below its 200-day moving average for the first time in more than two years:


The latest edition of the Federal Reserve’s Beige Book, its qualitative collection of anecdotes garnered by regional branches, was published this week and showed that the central banks’ contacts were talking about tariffs far more than they had in December (when the election result was known). Virtually nobody is talking about recession. The data in this chart counts the number of mentions for each word, compiled by DataTrek Research:


That’s strong prima facie evidence that tariffs are causing worry, and may already be changing executives’ behavior. Moreover, the Baker Bloom and Davis index of trade policy uncertainty, derived from analysis of media mentions, has just spiked to the highest in the 40 years since its inception. Current anxiety dwarfs the concerns that people had as the original Nafta treaty was coming into effect, or during the first Trump administration. China’s entry to the World Trade Organization, with hindsight by far the most significant trade change in this era, didn’t register:


Meanwhile, when businesses have a clear idea that tariffs are about to be levied on goods they want to buy, they are bringing purchases forward and stockpiling untariffed goods. This was wholly predictable, and helps to explain why the latest US trade deficit, published Thursday, was the highest on record. That had much to do with the rush to send gold bullion to the US, which has little effect on the real economy. However, the spectacular widening of the US trade deficit with Canada shows that businesses are already taking evasive action. Canada is now in the eye of the tariff storm, when only recently many had assumed that it would be exempt. That’s led to a remarkable buying spree as Americans stockpile Canadian goods:


As tariff proposals generate this upheaval, lobbying of the administration to change course has gained momentum. The plan is now for a reciprocal tariff system in which all importing levies will be matched one-for-one by tariffs on imports of the same products to the US. It’s growing clearer that the potential revenue to be gained is much less than had been thought, largely because the US has less cause for grievance than it believes.

UBS Group AG conducted a massive research exercise of the trade between the US and 30 of its largest trading partners, analyzing 96 categories and 86,000 product/partner pairs. Reciprocal tariffs wouldn’t raise that much money, or have that big an economic impact. UBS estimates that lifting US tariffs to the level of its partners would only equate to a weighted average increase of 1.65 percentage points (0.8 for developed markets and 2.2 for emerging), and generate only about $18 billion to $32 billion in annual revenue.

Reciprocity will often mean raising tariffs on goods that the US doesn’t import anyway. If a trade partner is exporting a product, UBS argues, it’s unlikely to be importing it. That's the whole point of comparative advantage. So this is a complicated nightmare that would significantly affect a number of countries. The biggest losers would be in Asia, led by Vietnam. Mexico, which has long had reciprocal arrangements under its trade treaty with the US, would barely notice:


The UBS exercise also reveals that the US is not particularly hard done by. The following chart shows the amount by which each country would need to raise tariffs to achieve reciprocity. Japan, and a number of European countries, would need to lift them by more than the US:


UBS’s punch line is: “Closing tariff gaps at the product-trading partner level amounts in tariff terms to a blanket tariff increase of 1.65% by the US. This is roughly an order of magnitude smaller than the 10% blanket tariff that candidate Trump was threatening to impose on the world.” So a reciprocal system, to be unveiled April 2, represents a major climbdown dealing with a problem that is not that serious. You can’t easily argue that it’s worth the uncertainty that it is creating. And if this is what indeed results, there’s no need for stocks to sell off like this. The market is, however, sending a clear message that it wants clarity on tariffs, and that it would prefer to do without them altogether. The question, growing ever clearer, is whether the Trump administration will stand up to the market.


jog on
duc