When Does NVDA Get Its Mojo Back? By Michael Salvatore, Editor, TradeSmith Daily In This Digest: - Is the Trump team’s big trade gambit failing?
- Here’s why gold is working while stocks are not…
- Bitcoin is breaking away from the pack…
- Global liquidity cements the trend…
- Andy and Landon Swan have never regretted buying NVDA…
It’s too early to call it a “blink”… A lot of pundits are out there celebrating the Trump team’s trade war “blink.” The 90-day pause on most tariffs brought the market some much-needed relief. Then came Treasury Secretary Scott Bessent’s comments on Monday, indicating they’re open to negotiations with the big exception, China. Then President Donald Trump himself said the tariffs on China, currently 145%, ultimately won’t be anywhere near their current level. That was enough for the headlines to start screaming that the U.S. blinked and that China was in control. But let’s back up a second… Posturing and posting on Truth Social is one thing. But in terms of action, what has actually happened since the 90-day pause? The answer, at least at the time of writing, is nothing. We cannot declare any blinks in the trade war with China until an actual concession is made. And so far, that hasn’t happened. In all likelihood, we’re closer to the start of the trade war than the end of it. We need to remember that and not get ahead of ourselves with celebrations. And that means we’re not out of the woods yet. We have to keep playing defense. | Recommended Link | | | | What’s coming could accelerate the global economy by as much as 250 times its normal rate. It also threatens to ruin the financial outlook for millions of Americans. Whether or not you’re an investor, you still need to prepare. Click here for 3 steps to take now. |  | | Especially since one of the primary goals of tariffs has backfired… Coming in, Team Trump knew that one of the biggest burdens on the economy was the 10-year Treasury yield. Mortgages, corporate borrowing, and the interest rate on the government debt are all tied to the yield on longer-dated Treasurys like the 10-year. The calculation from the admin, one could imagine, is something like this: The new tariff regime would be perceived as generating revenue for the U.S. government, making the fiscal situation more tenable. That would lower the risk premium on its debt. Stocks would go down, at least for the short term. But since there’s a very long-term inverse correlation between stocks and bonds, the hope was that bond prices would rise, driving yields down. But that’s not what happened. Yields shot up in response to the tariffs, with the 10-year Treasury yield adding 50 basis points in the five days after Liberation Day. Since then, it’s chopped around some and currently sits around 4.34%. What this represents is the belief that U.S. creditworthiness is in decline. Investors around the world – including large governments like China, the second largest holder of U.S. government debt – dumped Treasurys and demanded higher yields in exchange for the chaos of the tariffs. That’s why it’s so difficult to be in stocks right now. The bond market – and that means all domestic and foreign holders of long-term U.S. government debt – is in charge. It’s the same reason things like gold are working. Gold is largely divorced from the trade war and bond market narrative. It’s doing its job as a stable place to hide out when things are uncertain. And you know what else is doing the same thing? Bitcoin is doing its thing and surprising everyone again. Not only is bitcoin up from Liberation Day while stocks are down, it’s up even more than gold, which is supposed to be the star of the show: 
This seems odd for a risk-on asset like bitcoin, which sometimes seems to trade like a tech stock. But there’s more to this, which goes back to what we started talking about in mid-February. Take a look at this chart of bitcoin (blue line below) alongside an index of global M2 (green line below) with a 12-week forward adjustment: 
This chart shows a pretty clear relationship in the conditions of global liquidity – this index uses the supply of the U.S. dollar, the Chinese yuan, the Eurozone euro, the Japanese yen, and the British pound – and the price of bitcoin. Specifically, bitcoin prices are about 12 weeks behind the direction of global liquidity. In 2022, we can see that as global liquidity started to reduce, bitcoin’s price fell along with other risk assets. As the spigots turned back on, bitcoin began to rise again into 2024. Then, liquidity stagnated for a time along with bitcoin’s price. (For simplicity’s sake, assume all notes about the Global M2 index are about 12 weeks behind.) Finally, we saw a surge in global M2 in the second half of 2024, which sent bitcoin to new highs. M2 retreated heading into 2025, as did bitcoin’s price, and now it’s back on the upswing as bitcoin prices are higher. What you might also notice is that the index is already at all-time highs while bitcoin is not. Following the logic of the trend so far, the next likely place for bitcoin to go is up. NVDA was everyone’s favorite tech stock from 2023 to the beginning of 2025. It rocketed up the market cap leaderboards, quickly becoming the most valuable company in the world as the AI boom dominated the Wall Street narrative machine. (Disclosure, I own NVDA at time of writing.) Today, it’s out of the limelight as everyone is focused on the complicated tariff picture. But it’s still one of the most important computer hardware companies in the world… despite being now third in market cap behind Apple (AAPL) and Microsoft (MSFT). Shares are down mightily to start 2025. That might be compelling to some who have been looking for an entry point. And it might be worrying to others who hold the stock and worry the company grew too much, too fast. Andy and Landon Swan – two of our newest additions to the TradeSmith team – have some thoughts on where NVDA stands today, and I asked if I could share them with you here… Is Nvidia (NVDA) a buy? That’s the question we keep asking ourselves at LikeFolio. Shares are down more than 30% since the start of the year, with the latest blow stemming from a $5.5 billion charge related to Nvidia’s China-specific H20 chips. But the real driver of the decline is broader: tariff anxiety, export policy shifts, and investor hesitation about how long AI spending growth can keep up the current blustering pace. Somewhat fair. But our data and larger macro themes suggest at these levels, NVDA is getting juicy. That $5.5 billion charge reflects an already telegraphed phase-out of low-end chips no longer viable under new export rules. The company already acknowledged that China sales had fallen by half. The entire financial impact lands in the current quarter. Far as AI spending goes, major players are still ramping up. Big Tech capex tied to AI is expected to hit $320 billion in 2025, up from $230 billion last year. Amazon.com (AMZN) leads the pack with $100 billion, followed by Microsoft (MSFT) at $80 billion, Alphabet (GOOGL) at $75 billion, and Meta Platforms (META) at $65 billion. That’s a $90 billion increase in one year. Nvidia still powers the core infrastructure for every one of those companies. LikeFolio has limited visibility into Nvidia’s corporate-level AI demand – but our data does cover the company’s consumer-facing business. And we like what we see. Demand is up +16% year-over-year: 
Perhaps the most compelling question we’re asking ourselves: Have we ever regretted an NVDA buy? We’ve played Nvidia to the upside four times since 2020: - April 2020: +148.98%
- March 2022: +100.67%
- September 2022: +257.14%
- January 2023: +165.70%
Each trade followed short-term weakness. Each one delivered triple-digit gains to our MegaTrends subscribers. We’re watching for a break below $100. At that level, the risk-reward setup aligns with every entry that came before. Speaking of Silicon Valley… Did you know that tech companies are now hiring for engineering, data science, and cybersecurity jobs – without college degrees? Google (GOOGL) and Palantir Technologies (PLTR) would rather recruit new hires that they train themselves. Especially the latter, which just put up jaw-dropping billboards on U.S. college campuses to do just that. The “collapse of college” is the latest of the megatrends that Andy and Landon identified thanks to LikeFolio. College enrollment is down 8.4% since 2010 – despite the fact that the overall population grew 10% in that same time. And just yesterday, they released a three-stock watch list for this revolution underway. To hear more about megatrends and how the Swan brothers spot them, watch this. To your health and wealth, 
Michael Salvatore
Editor, TradeSmith Daily | 
Tidak ada komentar:
Posting Komentar