| A GREY SWAN PUBLICATION | Friday April 11, 2025 | Swan Dive — April 11, 2025 China Retaliates as Banks Weigh In From the desk of Addison Wiggin
Overnight, China announced that it was retaliating against President Trump’s latest tariff rates, matching the 125% rate currently in place.
However, China also stated that it would ignore future retaliatory measures.
That’s a sign that they no longer want to be caught in the finger trap of endlessly pulling away from their largest trading partner by volume.
For now, that allowed markets to reverse overnight losses. If markets trade up, sideways, or down just slightly today, they stand a good chance to close the week higher.
Just beware that the market’s trend is similar to other pre-recessionary periods, which means that even with this week’s reprieve, stocks will remain volatile until the news cycle turns more positive – look for a major trade deal or two to be announced and watch the market reaction. 📉 Markets Face Considerable Turbulence, Warns Jamie Dimon JPMorgan Chase CEO Jamie Dimon warned that the global economy faces “considerable turbulence.” That isn’t showing up in any economic stats yet, including the too-big-to-fail bank’s first quarter earnings, which rose 9%.
Dimon, who has run JPMorgan since before the Great Financial Crisis and who benefitted from the collapse of Silicon Valley Bank in 2023, is no slouch. So, the bank’s decision to increase its provisions to cover future loan losses by 75% is a sign that Dimon is acting ahead of a potential crisis.
Remember, in a financial crisis, banks go first. And their selloffs are brutal.
For now, however, it’s business as normal. Morgan Stanley reported rising quarterly profits. Wells Fargo noted some strength in its wealth management. BlackRock’s net assets hit $11.58 trillion.
Just remember: Earnings reports are a rear-view mirror. They reflect the market hitting all-time highs back in February. It’s the Q2 numbers out of the markets that will hint at the damage the trade war escalation is doing today. And with companies pulling guidance, market uncertainty will continue higher – another factor that will keep markets volatile.
Government insider, Jim Rickards, is back with a wild, new prediction. “Millions of Americans could soon make a small fortune.
Not thanks to crypto or artificial intelligence – but a multi-trillion-dollar government asset which could be unlocked as soon as May 3rd.” For many investors, he says, this could be a life-changing event.
But only if you act before May 3rd.
For the full details, click here.
💥 The Bond Blowup Continues While the stock market’s wild daily swings have caught investor attention, the real story this week has been the Treasury market. Someone is selling longer-dated Treasurys at a pace that’s caused yields to soar.
After the 10-year yield dropped below 4% in early trading Monday, it’s since soared to 4.4%, a massive move in the bond space. The 30-year Treasury bond had its biggest selloff since 1982.
Who’s doing the selling? China is the likely cuplprit, given their hefty Treasury holdings. But that would be a considerable escalation in the trade war, and China tends to move more slowly than that. The move in the Treasury market is also causing investors to shy away from the dollar, and toward the Japanese Yen and Euro.
Remember, President Trump wants yields lower, not higher. There’s about $9 trillion of Treasury debt that matures and needs to roll over by the end of next year.
Lower rates save Uncle Sam billions of dollars in interest costs, which now amount to about 22 cents out of every dollar the government spends. And in case you haven’t turned in your 2024 tax returns yet, those dollars come from you. 🌐 Trump Floats Chinese Stock Delisting On Thursday, President Trump floated the idea of delisting Chinese-based companies from the New York Stock Exchange.
The idea may have prompted China’s response on Friday not to react to any further retaliations in the trade war. If carried out, delisting companies like Alibaba could mean a loss of access to the world’s largest financial market.
It would also turn the trade war much hotter than expected. Like many Trump proposals, it’s tough to tell if it was simply the POTUS wondering aloud, or floating an idea that would prompt a more measured response. ⚠️ Andrew Packer on Navigating Today’s Markets Since last August, we’ve highlighted the opportunity in gold and bitcoin. Both are up since then, with gold being the runaway winner amid rampant central bank buying. Bitcoin, driven by global liquidity and a four-year price cycle, has proven more volatile, but it’s not out of the game yet.
We’ve also noted how Trump’s MAGA economy would create winners and losers, including a report on 50 stocks to avoid.
There’s still more unrest ahead. But with markets in turmoil, volatility high, and stocks flirting with a bear market, it may be time to hold your nose and put some capital to work.
Grey Swan Investment Fraternity Portfolio Strategist Andrew Packer’s suggestion? Increase any automatic investment plan you have.
Per Andrew: At the start of the week, I upped my 401(k) contribution. It’s a small change, but when the stock market inevitably gets back to all-time highs, I’ll dial that adjustment back down.
This strategy takes advantage of the long-term benefits of dollar-cost averaging (DCA), but also leans into the market during times of increased uncertainty and fear. The stock market demands a high price for certainty, but we’re now in uncertain conditions.
We don’t know when those conditions will end. But they will. They may just seem endless while we’re in them – I remember one stockbroker who thought the market damage from Covid would last for five years, not five months back in early 2020 – but remember, this too, shall pass. Addison P.S. As always, your cheerful reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: feedback@greyswanfraternity.com |
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