The latest changes in US tariffs were announced Sunday evening in a somewhat chaotic manner. After certain number of statements it was then clear that the US has decided to temporarily suspend tariffs on electronic goods such as smartphones, computers, and semiconductors. It is a temporary exempt from the reciprocal tariffs, including the baseline 10% rate on all countries. This exemption applies to the baseline 10% reciprocal tariff imposed on all countries — with the notable exception of China. Goods from China in these categories will continue to face a 20% tariff. President Donald Trump stated that these goods will soon be placed in a separate “tariff bucket,” with further details expected shortly.

US, weak economic signals:
US consumer sentiment in April dropped further, hitting its lowest level since June 2022 and marking the second-lowest reading in the survey’s history, which dates back to 1952. At the same time, inflation expectations surged to 6.7%, a level not seen since November 1981.

China’s Export Surge:
In China, economic indicators were also mixed. Exports jumped 12.4% year-over-year in March, providing a timely boost to the economy ahead of the anticipated tariff hikes. However, imports declined by 4.3% year-over-year during the same period.

Markets: Global stock markets extended their recovery, regaining more of the recent lossesUS dollar continued to decline, gold hold more steady above USD 3’200, interest rates moved lower.

My view: The latest tariff news provided a boost to equities, prompting investors to increase exposure after the recent slump. According to analyses, private and retail investors were the once heavily buying. However, markets appear to be overlooking the fact that the tariff relief is only a temporary pause, similar to the reciprocal tariff measures. New tariffs, including on pharmaceuticals, could be introduced at any time.

Given these unresolved uncertainties, I am not adding significant exposure at this stage. I expect markets may give back some of the recent gains as clarity remains limited and fears of a recession could get more room.

While tariffs have dominated the headlines lately, it's worth remembering that earnings season kicks off today. Among the first to report are major financial institutions, including JPMorgan, BlackRock, Wells Fargo, Morgan Stanley and Bank of New York Mellon.

Markets: US bank stocks marked a strong 2024, however, fell from their recent highs with trade tensions.

My view: While Q1 figures will be closely watched, forward-looking guidance may be even more critical, offering early insight into corporate health and investor sentiment in a market already rattled by escalating trade tensions.

In the US, outstanding loan payments are on the rise. Combined with trade uncertainty, higher interest rates, and rising consumer prices, this trend has the potential to escalate into a more serious issue. Given these headwinds, I am staying on the sidelines when it comes to bank stocks.

After the US imposed a steep 145% tariff on Chinese imports yesterday, China has responded by increasing its own tariffs on US goods to 125%, up from the previous 84%. The tit-for-tat escalation underscores mounting trade tensions between the two largest economies.

Markets: Globally stock indices turning red, gold above 3’200 for the first time, US dollar slumps with dollar index down more than 1.5%, US interest rates hovering around 4.4% level. Cryptos trading stable

My view:

Compared to the initial tariff announcements, markets no longer react with the same intensity. However, each new development in this tariff battle seems to nudge stock indices further into negative territory, setting off steady downward trends.

This ongoing back-and-forth between the world’s two largest economies feels like a playground contest, two kids seeing who can say the bigger number. I am just waiting for one of them to shout “infinity… infinity+1…”

My view remains unchanged, the US may actually be more dependent on China than the other way around. Regardless of who has the upper hand, this trade war is clearly hurting the global economy. It weighs on sentiment and clouds the short- and mid-term outlook with uncertainty. To make matters worse, the weak US dollar makes imports even more expensive, adding further pressure to already sticky inflation. Not a good sign for upcoming inflation figures and the consumer sentiment.

The Nikkei index in Japan and European indices surged this morning, following the strong rally in the US yesterday.

The European Union has decided to postpone countermeasures to US tariffs for 90 days.

In the US, inflation data (CPI) released this afternoon came in surprisingly lower than expected. Prices rose by 0.1% in March, down from 0.2% last month (forecasted 0.3%). On a yearly basis, inflation stands at 2.8%, down from 3.1% (forecasted 3.0%).

Markets:

My view: Give up gains and are trading negative in the US. Oil price slumps. US interest rates are going up, even with lower CPI data. Gold back over USD 3’100/oz while US dollar is losing strongly.

As I already mentioned in my last post shortly after midnight, I do not believe that this rally will last as buying stocks after such a day, there is a small chance to materialize. Parallels are being drawn to the biggest intraday rally in 2001, when Nasdaq gained over 14%. Following that, the index lost more than 50%, and it took six years to return to break-even.

At the moment, having access to a trading platform with pre-market capabilities is valuable. Currently the moves in the pre- and after-market trading hours are significant, offering opportunities.

As a result, I closed my short volatility position this morning with profit and have since opened a long volatility position by purchasing an ETF. Additionally, with the rally reaching extreme levels, I have initiated new short positions on the Nasdaq and in semiconductors.

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Yesterday, US markets posted one of the strongest intraday gains in history, with the Nasdaq surging over 12%, its biggest rally since 2001 and the second-best day on record. The sharp rebound came after US President Donald Trump announced a 90-day pause on some tariffs, sparking a wave of investor optimism and aggressive short-covering across sectors.

Markets: Nasdaq Index gained more than 12%, Dow Jones Index almost 8% while S&P 500 Index jumped 9.5%. Together with the stock markets, cryptos and commodities rallied, interest rates took a breather with 10-year yields back to 4.35% after hitting briefly 4.5% intraday, while the US dollar gained back some ground. Gold was able to defend its intraday increase of 3%.

My view: We have just witnessed one of the most volatile short-term periods in market history, marked by extreme swings and, remarkably, driven largely by the actions and statements of a single individual. The sheer scale of market impact from such announcements is unprecedented and gives more than just a hint of insider dynamics at play.

Many institutions were caught off guard, myself included, at least to some extent. In response, I made gradual adjustments to the portfolio starting this week. Just a bit ahead of yesterday’s major announcement, I closed out the long volatility position and rotated directly into a short volatility ETF, positioning for a potential cooldown in market turbulence after volatility had reached extreme levels. It was just the right timing.

Markets are celebrating, but many seem to overlook that the tariffs have not been removed, only paused for 90 days. The uncertainty remains high, particularly for companies that have already started adjusting their strategies in response to the initial tariffs.

One pressing question: what happens to goods imported yesterday that were technically subject to the new reciprocal tariffs? There is still no clear guidance, highlighting just how chaotic and unpredictable this environment has become.

Based on this remaining high uncertainties and unpredictability, I am not sure how sustainable this super-rally really is. Should volatility levels begin to normalize, there is a stronger chance I will pivot back to a long volatility position. The underlying uncertainty has not disappeared, it might simply be delayed.

The trade battle between the world’s two largest economies, China and the United States, has entered a new and more aggressive phase. In a bold show of force, China announced today that it will impose 84% tariffs on US imports. This follows US President Donald Trump’s decision yesterday to increase tariffs by 50%, bringing total duties on Chinese goods to 104%.

Trump’s so-called "reciprocal tariffs" took effect today, targeting around 60 trading partners with whom the US runs trade surpluses. This follows the implementation of a baseline 10% tariff on most US trading partners, which came into force on Saturday.

In response, China has pledged to continue taking “resolute and forceful” countermeasures. As of now, there has been no official response from U.S. political leaders regarding China’s latest move.

Adding to market jitters, there was a fire sale of long-term US Treasuries overnight, a development that could signal further financial instability if tensions escalate.

Meanwhile, in a somewhat under-the-radar move, the European Commission announced countermeasures targeting EUR 21 billion worth of US imports. These duties are expected to be collected starting April 15. The EU emphasized its strong preference for a "balanced and mutually beneficial negotiated outcome" in its official statement.

In Germany, coalition talks have concluded with an agreement to form a new government.

Markets: Chinese equity markets saw an increase last night, European markets with another bad day deep in the red, US indices with a try of stabilization, US long-term interest rates with a strong up move from 4.2% to 4.5% within few hours, gold up +3%, US dollar and oil weak, metals in plus. Cryptos also with signs of stabilization after the dip earlier today.

My view: I am not surprised by China’s latest move. The country has the strength and strategic positioning to play this game. With ample foreign exchange reserves, China has the ability to stabilize its own markets. Today’s positive market performance suggests that government-backed equity purchases may have taken place to restore investor confidence.

China remains the second-largest holder of US Treasuries, with approximately USD 760 billion. What caught my attention is that the origin of last night’s fire sale in long-term Treasuries hasn’t been clearly identified. To me, this looks like a calculated signal from Beijing, designed to rattle global markets and remind the US of its financial interdependence with China. If China would aggressively liquidate its Treasury holdings, it could send US interest rates soaring, causing significant economic disruption.

Interestingly, we’ve also seen a pause in the recent downtrend of some key commodities today. This could be an early sign that the fight for strategic resources is heating up, a theme I have been watching closely.

In light of these developments, I have taken some tactical positions in the ETFMandate portfolio today. As always, all Premium Members received immediate updates on these investment decisions earlier today.

Markets are taking a breather after the wild ride during the last days. Tariffs remain the driving topic. The Chinese government has expressed a firm stance, stating it will "fight to the end" in the face of escalating trade tensions. The EU is trying to find a deal and proposed a "zero-for-zero" tariff agreement to eliminate tariffs on industrial goods. US President Trump has stated that for the EU, to receive relief from these tariffs, it must commit to purchasing USD 350 billion worth of American energy.

Markets: With US coming back to market today, the rebound started to gain some traction. The crypto rebound stalls, US dollar is loosing ground, Swiss franc is getting stronger, gold trading above USD 3’000/oz

My view: After making small adjustments to the portfolio allocation yesterday, I am now taking a wait-and-see approach before making any further changes. The situation remains uncertain until we gain a clearer understanding of the impact of tariffs on both the US and global economies. The probability of a recession is rising. JP Morgan currently addressed a 60% chance of recession in the US.

In the short term, it is crucial to observe how things unfold over the next few days, not just in terms of news flow but also investor behavior and technical indicators. Drawing from my professional experience, I have a solid understanding of institutional investment processes and timelines. Should they decide to adjust the positions of the portfolios of their clients, this is going to happen during the next days and will impact the markets as high volume is traded.

It is worth noting that institutions had previously advised twice their clients to buy the dip before the recent sharp sell-off. As a result, their current allocation may now be too high for the current environment of uncertainty and elevated volatility.

What concerns me, though, is the growing consensus. Many investors may use the recent rebound as an opportunity to offload positions and therefore we may be heading into a new downward leg in the market.

Since the announcement of reciprocal tariffs by US president Donald Trump last Wednesday, financial markets have experienced their most significant sell-off since the pandemic-induced crash in 2020. Major indices have dropped by around 5% or more.

The Nasdaq has officially entered bear market territory, falling over 20% from its recent peak. Meanwhile, the sentiment remains deeply negative with the Fear and Greed Index registering its sixth consecutive week in “Extreme Fear” zone.

Markets (during Weekend): Nasdaq -1.8%, Dax -1.7%, Hang Seng -1.6%, cryptos with heavy losses, Bitcoin down 5%.

My view: As mentioned on Friday, I continue to see room for further downside. The process of risk unwinding by institutional investors could be just at the beginning. The recent spike in volatility is forcing them to reduce risk exposure in their portfolios in order to manage overall portfolio risk.

That said, the market could experience a bounce, should any news emerge that improves sentiment or supports a more positive outlook. Such a rebound however, could be used for unloading risks.

I am closely monitoring both market movements and the news flow. I do not see parallels to the pandemic-driven crisis. Back then, we faced a sudden, short-term shock that impacted on the global economy briefly, followed by swift and coordinated support from central banks and governments.
Today, the situation is different. The escalating trading war has the potential to spiral into a prolonged drag on global growth, ultimately increasing the risk of a broader recession.

During the pandemic, I invested all cash in three steps, one a bit too early, one near the bottom and one shortly after the initial rebound. This time is different though. Given how this current setup looks to me, I am avoiding reactive moves or speculative chases. I prefer to wait for clear and convincing signals before increasing exposure.
Based on the speech from Fed chairman Jerome Powell on Friday, there is not much room for the Fed to lower interest rates to calm down markets. “We are here to tell the truth. The truth is tariffs are pushing prices up and significantly slowing economy:”

The portfolio has remained relatively stable through the current market turmoil, so I see no need to make any significant adjustments at this stage.

No, it is not November yet. However, on financial markets it feels like everything is on sale.
Indices were not able to recover from yesterday’s sell-off yet when China announced tariffs on all US goods with 34%. In addition, the Ministry of Commerce announced new sanctions. It added 11 companies from the US to its unreliable entity list and placed 16 US-based entities on the export control list.

Furthermore, President Trump said that tariffs on the Chip and Pharma sector will be announced soon. So far they were excluded from the latest round of tariff announcements.

Markets: European indices currently down between 4-5%, US Futures down around 3%, oil loses another 6%, US 10-year Treasury below 4% (3.9%), gold flat, cryptos turning red after trying to recover.

My view: Once feared by all and dismissed by many, the trade war is now a reality. Its impact on markets is about to intensify.

My first strategy, to navigate the portfolio through the storm, with a focus on limiting the downside which is currently working quite well. Even with some heavy losses on certain positions, the losses are covered from the side of short positions keeping the portfolio in balance for the time being.

And the key question now is, what is the next news and catalyst poised to impact the markets?

And second, is it the moment to buy the dip?

At this stage, this still does not look like a buying opportunity to me. Fear is clearly widespread and intensifying, the sentiment has clearly shifted into panic mode. A sign of full capitulation could then be a first step back into adding new risk exposure. However, if the recession scenario is becoming real, there is more room for downside!

Big announcement of the “liberation day” tonight by US president Donald Trump, showing a big board to the audience with tariff figures charged to listed countries starting by tomorrow.

Markets: Nasdaq lost almost 2.5% in the after-hours trading, down more than 3% from its closing level. Dax future down 2.5%, Nikkei down 2.3%, US Small Caps down 4%, cryptos lose their bigger gains today trading in minus now, no big moves in currencies yet, gold with small gains.

My view: I am not surprised by the initial market reaction; what’s more striking is the positive and optimistic stance investors have taken, buying stocks ahead of such a major event with potentially significant market implications.

It was the right decision to refrain from following the recent "buy the dip" trend and instead maintain a cautious portfolio allocation, given the broader and ongoing uncertainties.

Today, US President Donald Trump will announce new tariffs. He is calling it “Liberation Day,” saying it is a big move to protect American jobs and businesses.
These new tariffs are reciprocal, which means the US will now charge other countries the same taxes they charge American products. For example, if Europe taxes American-made goods at 20%, the US will now tax European goods at 20% too.
A 25% tax on all imported cars and car parts, was already announced and will start tomorrow.

Markets: After the rebound yesterday, stock markets continue to lose ground today, interest rates down.

My view: I was surprised by the recent rebound. Overall, the stock market seems a bit too relaxed about the tariff announcement. The big question remains: how significant will the tariffs be, and how will other countries respond?

For now, I am staying on the sidelines with new investments until there is more clarity on the situation.

The latest inflation numbers published on Friday afternoon came in higher than expected. The core personal consumption expenditures (PCE) price index rose 0.4% in February, above economists' 0.3% forecast. This pushed the 12-month inflation rate to 2.8%, exceeding the projected 2.7%.

At the same time consumer spending increased 0.4%, below the forecast of 0.5%, while the personal saving rate reached 4.6%, its highest since June 2024.

Markets: Markets left the week in deep red zone. The Nasdaq index down on Friday 2.6%, lost another 0.5% more in the after-hours trading; US 10-year yield down to 4.24%, gold with new all-time high at USD 3’086 per ounce. Global stock markets and cryptos joined the sell-off. Cryptos continue today trading lower.

My view: It is not a surprise that latest economic data was not well received. Investors are increasingly concerned about potential stagflation, where inflation remains persistent despite slower economic growth.
If upcoming US data continues to signal stagflation/recession, markets are likely to shift further into defensive positioning and risk-off mode. Let’s do not forget, investors recently added risk by increasing the equity exposure in their portfolio while buying the dip. That new allocation is already in minus.
My current positioning, however, is holding up well. I always maintain a core equity allocation, but I have been scaling back long-term positions gradually since the start of the year. At the same time, my short positions built tactically over that period are now paying off, helping keep my portfolio solidly in the green, despite the broader sell off.

Funds recorded substantial inflows last week, marking a new milestone. According to a Bank of America survey, global funds attracted approximately USD 43.4 billion in assets over the five trading days. The bulk of the growth was driven by U.S. markets, while European equity funds saw record-breaking inflows of USD 4.3 billion - the highest on record.

Markets: Today, markets remain broadly under pressure, with widespread weakness across stocks, bonds, and cryptos. The only bright spot is commodities, where gold and industrial metals are showing gains.

My view: It is very interesting to see that a large crowd, including major investment houses, jumped in to buy the dip - after all, it is a strategy that worked well for a long time. However, those who follow my commentary know that I have consistently taken a different stance. I have made it clear that I do not share this view and will not join the mainstream this time.

Holding a contrarian view in moments like these is not that easy, but it is a key ingredient in successful investing. Staying true to your own perspective and strategy, even when the noise is loud and the crowd is moving in the opposite direction, often makes all the difference.

Since I began regularly sharing my views here on Market Insights, the market has largely moved in line with my expectations. This approach has well paid off in my portfolio, especially during periods of heightened volatility and when major indices are even trading in negative territory.

Stock markets remain highly volatile. Following a recent correction - defined as a 10% decline from the recent peak - in US indices such as the Nasdaq and S&P 500, markets have rebounded modestly over the past several days. Yesterday, the markets added slight more gains, albeit on lower trading volumes.

Investors continue to seek clear guidance amid ongoing uncertainty. The latest consumer sentiment report this week, highlighted persistent weakness, reflecting growing concerns over economic conditions. Investors are now turning their attention to today's release of the U.S. durable goods orders report, hoping it will provide further clarity on the state of the economy.

Markets: today US futures trading sideways. Europe stocks continue to decline, interest rates see some more pressure on the upside. gold stable above the USD 3’000 level, cryptos with small gains.

My view: With trading volumes diminishing, the recent market rally could quickly run out of steam. Could this signal a “bull trap” - a scenario longtime not seen, in which prices temporary rise, encoring investors to buy, anticipating bullish momentum to continue, subsequently turns out to be temporary or false.

My perspective remains contrarian. I remain cautious about buying into this dip while strategists from prominent investment houses advising clients to accumulate stocks at current levels, even on high number of uncertainties. Numerous geopolitical and economic concerns persist: a ceasefire between Russia and Ukraine remains far away, tensions in the Middle East tensions seem to re-escalate, and looming US tariffs add further instability. In Germany, following recent elections, there was an agreement on a new debt package aimed at infrastructure projects and military aid. However, practical implementation will require significant time, and the formation of a governing coalition has yet to be finalized.

US indices see a bounce today, driven by rumors of softer stance on tariffs from the White House. President Trump may impose fewer tariffs and should spare certain sectors from tariffs on April the 2nd.

Markets: US markets rally led by tech stocks, with Nasdaq up towards 2% while major stock markets in Europe and Asia continue to struggle. Interest rates see an uptick, USD slightly stronger while investors take some profit on gold. Crypto prices with an upswing.

My view: The rally was initiated by cryptos already late Sunday evening with some investors taking the risk to buy risk assets and play this rumors. Even my tactical allocation does not mirror today’s market move, I do not follow such speculations and keep a certain cautious stance as a high number of uncertainties remain (global tensions with re-escalation in Middle East, Russian war, German government formation, trade war etc.)

The Federal Open Market Committee (FOMC) left the fed funds rate unchanged, as expected. The Fed indicated they see half a percentage point of rate cuts for 2025, which typically means two reductions.
At the same time, the central bank lowered its projection for US economic growth in 2025 to 1.7% from 2.1% in December, while raising its inflation outlook to 2.8% from 2.5%.
Furthermore, the committee announced to slow the pace of the quantitative tightening, reducing the pace of shrinking its balance sheet by selling bonds.

Markets: US markets jumped with Nasdaq closing the day up 1.3% while S&P 500 Index gained 1.08%. The 10-year Treasury fell down to 4.23% from 4.3% while short rates were going north. USD declined while gold price saw an uptick.

My view: I was surprised investors reacted so positively to the Fed's statement, given that the economic outlook appears less favorable and uncertainties about the impact of tariffs persist. Investors seem unconcerned about the increasing probability of an economic downturn and the potential escalation of the trade war. As a reminder, the next significant tariff announcement is scheduled for April 2nd.

My view on interest rates remains consistent: there is room for rates to decrease, particularly on the longer end. This outlook applies to Europe as well, with the recent spike in interest rates during March following Germany's announcement of a EUR 500 billion debt package.

Therefore, I continue to maintain my long-term Treasury position, established when the 10-year yield reached 4.8% back in January.

Regarding equities, I retain a cautious stance, even after the recent market correction.

The market is widely expecting the US central bank to keep interest rates unchanged at its upcoming meeting today. However, attention will focus on Chairman Jerome Powell's comments amid rising concerns over economic confidence. These concerns have intensified due to President Donald Trump's escalating trade disputes and tariffs, increasing fears of potential stagflation. The Fed's statements on these economic challenges will be closely watched for reassurance and guidance.

Markets: US interest rates are moving sideways during recent days with the 10-year Treasury yield hovering around 4.3%; gold above USD 3’000 continues the uptrend; US dollar continues to decline against major currencies

My view: Given that recent inflation figures and consumer expectations remain significantly above the Federal Reserve's target of 2%, there's currently no room for an interest rate cut. Investors appear overly optimistic, anticipating hints of potential future rate cuts in today's Fed statement. However, the economic situation remains uncertain, particularly considering the unclear impact of tariffs on economic growth.

Political uncertainty continues and may even intensify, particularly with the upcoming second and major round of tariffs scheduled for April 2nd. This could further increase market volatility and elevate recession risks.
Should a recession occur, it is likely that US president Donald Trump would place blame on Fed Chairman Jerome Powell for not proactively lowering interest rates beforehand.

Under such a scenario, the stock market faces additional downside risk, potentially triggering a further correction with spillover effects on European and Asian markets. Long-term interest rates could decline further, whereas short-term rates might experience upward pressure.

A European company announced this morning ambitious targets for 2025, aiming for a year-on-year revenue increase of at least 40% and an adjusted EBIT margin exceeding 20%. Based on its previous year's revenue, the company projects EUR 60 million in revenue for 2025.

In 2024, the company achieved revenues of EUR 41.7 million, up from EUR 38.1 million the year before. Despite these positive growth figures, the company's current market capitalization stands at over EUR 1.3 billion.

60 million revenues vs. EUR 1.3 billion market cap!

The company is Steyr Motors AG, engaged in the defense sector, currently en vogue. The company is a manufacturer and distributor of diesel engines for heavy-duty vehicles, boats, and generator sets.

Markets: German DAX Index is pushing toward all-time highs, driven by news of a debt-financing package aimed at stimulating the economy and bolstering military defense efforts.

My view: To put this numbers into perspective: if Nvidia were valued at similar revenue-to-market cap multiples, its share price would be around USD 249. However, Nvidia’s share price is trading around USD 120 this afternoon.

While Steyr Motors AG benefits from operating in the currently booming defense sector, this valuation appears overly speculative. The stock of Steyr Motors is bought blindly without raising concerns about its valuation, just on hope to benefit from current rally.

Stay away from such speculations. The recent surge in defense stocks and European markets seems to be heavily reliant on optimism and capital inflows, much of it likely reallocated from US stocks. Valuations appear unsustainable without corresponding fundamental growth.