The market action on 4-9-25 surprised many, me included. The massive up move in all indexes and gold too set records. Is there any sense in it? The day before earnings were disappointing and a sell off ensued. So what change in 24 hours that makes those lousy earnings look worth trillions of dollars more? Not much I can see, but the ears on the rail heard something from the Trump Locomotive barreling down on them. Just a back track to a somewhat neutral pause in tariffs did the trick.
It's a technique whereby Trump makes the problem, changes his mind and solves the problem he made in the first place. I think his finger to the wind sensed he better do something. Plus, interest rates have been going up again and Bessent is back peddling to keep his job in my opinion. The markets like certainty. True enough. They are getting the opposite and riding a never seen before roller coaster.
Drama aside, some capitulation from trade partners seems to be happening. Many, not all but definitely not China are seeking something to accommodate Trump. Whether this needed to be a front burner issue escapes my puny brain but perhaps it is a piece of the grand reshuffle I believe is going on to get the maturing US Treasuries refinanced. Today's auction saw the 10 year fairly successful but still paying 4.65% and that still means a trillion of interest on the debt. Bessent needs to term out to 30 years at 3% to make any real headway while coincidentally Trump and Doge get expenses down…radically down.
I am probably not the guy to tell you what is in Trump's mind or plan..is there a plan? I think so, but it is unknown in my normal framework. He is a bull in a China shop, puns intended. China must hate this man and President because at least he is calling them out. The problem is, they hold the production card and we hold the consumer card. Guess who is in control?
Best,
Donn Marier
DM-Your Own CFO