Monday, 14 April 2025

Trump’s Tariff Defeat. A Hangover Ahead. An ECB Rate Cut?

Baltic Dry Index. 1274 +05          Brent Crude 64.54

Spot Gold 3229               US 2 Year Yield 3.96 +0.12  

US Federal Debt. 36.722 trillion!!!

“I love Canada and Canadians, but they have nothing that we need. We don’t need their oil or lumber or aluminum or any of the other things they send us. And they stole our auto industry. I’m going to ruin their auto industry and take all those plants back.”

President Donald J. Duck Trump.

Another Trump tariff flip-flop and more uncertainty in stock and commodity markets, not that stock punters in the global stock casinos aren’t grateful for the relief rally the flip-flop generated.

In better news, the ECB on Thursday is widely expected to lower its key interest rates.

Hong Kong shares rise over 2%, leading gains in Asia-Pacific after Trump pauses tariffs on consumer electronics

Updated Mon, Apr 14 2025 11:50 PM EDT

Asia-Pacific markets climbed Monday as U.S. President Donald Trump paused tariffs on some consumer electronics, boosting risk sentiment.

Hong Kong stocks led gains in the region, with the Hang Seng Index up 2.59% and Hang Seng Tech Index trading 3.13% higher.

Mainland China’s CSI 300 was up 0.58%.

Japan’s benchmark Nikkei 225 increased 1.58% while the broader Topix index rose 1.50%.

In South Korea, the Kospi index added 0.88% while the small-cap Kosdaq advanced 1.60%.

Meanwhile, Australia’s S&P/ASX 200 was up 1.40%.

Indian markets were closed for a public holiday.

Trump exempted smartphones and computers as well as other devices and components such as semiconductors from his new “reciprocal” tariffs, according to a U.S. Customs and Border Protection guidance issued late Friday.

However, Trump and Commerce Secretary Howard Lutnick suggested Sunday that the exemptions were not permanent, stirring up more uncertainty.

Trump said in a Truth Social post that these products were still “subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket.’”

Several countries in the region are also preparing for trade negotiations with the U.S. this week.

Trump is engaging in negotiations with countries including Vietnam, India, South Korea and Japan, and is prioritizing existing trading partners that are strategic to countering China, according to two people close to the White House, reports from Politico show.

Japan’s top trade representative Akazawa Ryosei is slated to visit the U.S. this week for talks with U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, according to local broadcaster NHK.

U.S. futures were up after stocks capped a volatile week with a rise last Friday, following comments from the White House that Trump is “optimistic” that China will seek a deal with the U.S.

The S&P 500 advanced 1.81% to end at 5,363.36. The Dow Jones Industrial Average rose 619.05 points, or 1.56%, and closed at 40,212.71 while the Nasdaq Composite climbed 2.06% to settle at 16,724.46.

Asia markets live: Stocks climb

Stock futures rise after a wild week as traders weigh surprise China tariff exemption: Live updates

Updated Mon, Apr 14 2025 11:56 PM EDT

Stock futures rose early Monday as Wall Street looks to gauge President Donald Trump’s latest tariff moves.

S&P 500 futures gained 0.86%, while Nasdaq-100 futures moved 1.31% higher. Futures tied to the Dow Jones Industrial Average climbed 109 points, or 0.27%.

Trump exempted smartphones and computers as well as other devices and components like semiconductors from his new “reciprocal” tariffs, according to new U.S. Customs and Border Protection guidance issued late Friday. The president and his Commerce secretary, Howard Lutnick, then suggested Sunday that the exemptions aren’t permanent, stirring up more tariff uncertainty.

Trump said in a Truth Social post that these products are still “subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket.’”

The developments come as shares of the “Magnificent Seven” have come under pressure in the wake of the president’s “liberation day” tariff announcement earlier this month. The CNBC Magnificent 7 Index has declined about 5% since then. Apple has notably been among the hardest hit names, as the iPhone maker lost nearly $640 billion in market cap in the three trading days following the announcement.

Last week marked one of the most volatile trading weeks on record for the Street. The CBOE Volatility Index spiked above 50 on Thursday, with stocks giving up some of their historic gains seen a day earlier. On Wednesday, the market soared after Trump announced a 90-day reprieve for a number of his new tariff rates, seeing its third-biggest one-day gain since World War II.

“The mid-week delay on some non-China tariffs, along with solid banks earnings and optimism about Fed intervention (should it be needed) at the end of the week helped fuel the gains in US equities, with some also attributing Wednesday’s bounce to short covering,” said Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets. “For the moment, this seems to have offset the concerns that emerged about the bond market and recession worries.”

Despite last week’s rally, all three major averages are still down sharply since the so-called reciprocal tariffs were announced. The S&P 500 has dropped 5.4%, while the Nasdaq Composite and Dow Jones Industrial Average have fallen about 5% and 4.8%, respectively.

The market is gearing up for a major week of earnings, with results from more big banks such as Goldman SachsBank of America and Citigroup on the docket. Other key names, including streaming giant Netflix and major carrier United Airlines, are also set to report.

Stock market today: Live updates

Chinese exchanges restrict daily stock sales as trade war with U.S. escalates, sources say

Published Sun, Apr 13 2025 7:30 PM EDT

Chinese bourses have set daily restrictions on net share sales by hedge funds and large retail investors, four sources said Friday, as Beijing steps up support for its stock markets in an intensifying trade war with the United States.

Two investor sources said a soft limit on daily net sales by individual hedge funds and big retail investors - implemented through verbal warnings from brokerages - had been set at 50 million yuan ($6.83 million).

Failure to comply risked a suspension of trading accounts by the stock exchanges, which have issued the directive, two brokerage sources said.

All four sources declined to be identified as they are not authorized to speak to the media. The Shanghai and Shenzhen stock exchanges did not respond to Reuters requests for comment.

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Chinese exchanges restrict daily stock sales as trade war with U.S escalates, sources say

In Trump world, yet another flip-flop. Watch Apple & co. stocks soar. Cui bono? Coming next, a flip-flop on autos, aluminium, steel, lumber? China?

Effectively, of China’s 440 billion of exports to the USA, now about 147 billion of technology exports are tariff free. Well not quite.  China’s iPhones are still subject to a 20 percent “Fentanyl” tariff. Still, who just won?

Trump's iPhone olive branch is a significant trade war retreat

13 April 2025

Well, well, well.

In a US customs messaging note quietly slipped out in the early hours of Saturday, a series of numbers were listed as exempt from the 125% tariff on goods entering the country from China.

The code "8517.13.00.00" means very little to most of the world, but in the US customs list it represents smartphones.

The inclusion meant the number one Chinese export to America by value last year was exempted from the import taxes, alongside other electronic devices and components, including semiconductors, solar cells and memory cards.

In the context of the US Commerce Secretary Howard Lutnick just days ago announcing that part of the point of escalating tariffs on China was to bring back iPhone production to the US, this was a stunning about-turn.

The US has now excluded the single biggest Chinese export, and certainly the most high-profile finished good from tariffs, without publicly announcing it at first.

It is worth considering what would have happened in the absence of this exemption.

The effect of 125% tariffs on Apple's Zhengzhou manufacturing facility in eastern China would have started to show in weeks at most American Apple stores. It would have been a totemic "sticker shock" for the White House's tumultuous tariff push.

According to Counterpoint, a global technology market research firm, as much as 80% of Apple's iPhones intended for US sale are made in China.

The tech giant's manufacturing profit margins are estimated to be between 40-60%. Typical iPhone prices might have moved closer to $2,000 (£1,528) than $1,000. The other option for Apple could have been to spread the cost across all of its global prices, but would the rest of the world accept paying a Trump tariff tax?

More

Trump's iPhone olive branch is a significant trade war retreat - BBC News

Trump exempts phones, computers, chips from new tariffs

Published Sat, Apr 12 2025 9:19 AM EDT Updated Sat, Apr 12 2025 1:26 PM EDT

 President Donald Trump exempted smartphonescomputers, and other tech devices and components from his reciprocal tariffs, new guidance from U.S. Customs and Border Protection shows.

The guidance, issued late Friday evening, comes after Trump earlier this month imposed 145% tariffs on products from China, a move that threatened to take a toll on tech giants like Apple, which makes iPhones and most of its other products in China.

The guidance also includes exclusions for other electronic devices and components, including semiconductors, solar cells, flat panel TV displays, flash drives, and memory cards.

The White House said on Saturday the exemptions were made because Trump wants to ensure that companies have time to move production to the U.S.

White House deputy press secretary Kush Desai said in a statement that Trump “has made it clear America cannot rely on China to manufacture critical technologies such as semiconductors, chips, smartphones, and laptops.”

“At the direction of the President, these companies are hustling to onshore their manufacturing in the United States as soon as possible,” Desai said.

The 20 product categories listed in the CBP guidelines are apparently exempt from the 125% tariff imposed by Trump on Chinese imports and the 10% baseline tariff on imports from other countries. A 20% tariff on all Chinese goods remains in effect.

CNBC has asked the White House and CBP to confirm the total effective tariff rate on the exempted products but so far has received no definitive answer.

The exemptions are a win for tech companies like Apple, which makes the majority of its products in China. The country manufactures 80% of iPads and more than half of Mac computers produced, according to Evercore ISI.

“This is the dream scenario for tech investors,” Dan Ives, global head of technology research at Wedbush Securities, told CNBC. “Smartphones, chips being excluded is a game changer scenario when it comes to China tariffs.”

---- In the days since Trump’s tariff announcement, Apple lost over $640 billion in market value, CNBC previously reported. The cost of an iPhone under Trump’s tariff plan could have ballooned to as high as $3,500 under some estimates.

More

Trump exempts phones, computers, chips from new tariffs

In other news.

These unusual market moves show trust in the dollar may be breaking

13 April 2025

Something strange is happening in the US.

As investors batten down the hatches over fears of a tariff-fuelled financial crisis, a rare split has opened up between the dollar and the yields that America’s government pays on its debts.

While somewhat technical, this essentially means that the Green Back is plunging at the same time as US borrowing costs are rising.

Already, this trend has panicked investors, who note that the two key financial metrics usually do the opposite by moving in tandem.

Worse still, stock markets have also taken a pummelling since Donald Trump’s trade war unleashed a wave of economic turmoil.

Combined, the falling dollar and rising yields reflect the shifting fiscal landscape in America, where the US President’s tariff blitz has put the country’s safe haven status at risk.

Christian Keller at Barclays notes how far the US has fallen since Trump ramped up his trade war earlier this month.

“A parallel sell-off in equity, rates and the currency is typical for emerging markets, but not for the world’s core safe-haven markets,” he says.

Investors had become used to the idea that the US was the best place for their money in good times or bad, giving America the “exorbitant privilege” of controlling the world’s reserve currency.

It meant lower borrowing costs and easy access to a flood of foreign money to invest in the States, making the country richer and helping its economy to grow faster.

But suddenly, investors are turning their backs on the US, ditching the dollar and other assets all at once.

It represents a stunning reversal of usual patterns of behaviour, breaking what had come to be seen as something close to a basic rule of global finance.

The result is that the dollar and bond yields, which by and large tend to move in tandem, have sharply diverged.

Even after the President suspended his most aggressive tariffs on almost all countries apart from China, markets have failed to comply.

Since April 2, which Trump called “liberation day”, the dollar has fallen more than 4pc and the yield on 10-year US bonds has risen from 4.2pc to 4.5pc.

Keller says the moves are a remarkable break with history.

“The dollar’s depreciation in response to US tariff increases – the opposite of economic textbook doctrine – and the US Treasury sell-off in parallel to equity losses – the opposite of safe-haven behaviour – have cast a broader light on the overall dynamics triggered by Trump’s tariff policy,” he says.

More

These unusual market moves show trust in the dollar may be breaking

Finally, as US consumers rush to beat the coming tariff price increases, a sales “hangover” is the likely future result and not just in auto sales.

New Vehicle Movement Leaps Upward as Consumers Anticipate Tariff-Related Price Increases

Retail Costs Already Heading Higher and will Accelerate if Tariffs Stay in Effect

Sales “Hangover” is Likely as Trade Wars Heat Up

APRIL 2025

March represented yet another set of twists and turns in what has been a multi-year progression of unprecedented supply, demand, and pricing dynamics in the new vehicle marketplace.

This latest development comes in the form of tariff-related effects, with the Trump Administration implementing levies on materials and parts and moving toward adding surcharges on major vehicle systems and on vehicles coming from outside the United States.

As these actions are moving from threat to implementation, prices have already risen more than $1,000 at retail and have reversed a declining trend that had been playing out for the past eight months. These recent increases come in the form of less aggressive incentives by OEMs and shallower discounts at dealerships. Both changes reflect how cost uncertainties are driving initial and preemptive price hikes throughout the industry. And as deeper and broader tariffs are now being contemplated and enacted, the potential for consumer cost increases goes from in the hundreds of dollars to the thousands.

Consumers, in anticipation of these higher prices, rushed to buy new vehicles in the current period, with Vehicles Moved hitting a level (1.3MM) not seen since May 2021. While this provided a boost in the short run, the ”pull ahead” effect of these accelerated sales (estimated to be 153,000 in March) runs the risk of leading to a hangover effect that depresses results going forward. That risk is exacerbated if prices run up quickly, if the tariffs remain in place for a long period of time, and—particularly—if they spark a retaliatory and escalating trade war that pushes costs and prices even higher than the initial salvos would suggest.

While the timing, scope, and duration of these tariffs cannot be predicted, the actions and reactions that they spark are already evident. What can also be said is that OEMs and their partners who closely monitor the real time impact of these events on supply, demand, and pricing—and who implement appropriate actions to mitigate threats and take advantage of opportunities—will have an advantage in today’s (and tomorrow’s) volatile automotive marketplace

More

CT On the Horizon 2025_03

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Investors are growing concerned about a U.S. asset exodus as Treasuries and the dollar decline

Published Sat, Apr 12 2025 7:49 AM EDT

The April sell-off for financial markets has been wider and more volatile than typical pullbacks, fueling concern that the aggressive and constantly changing trade policy from Washington, D.C. could be doing long-term damage to the financial standing of the U.S.

The S&P 500 has now dropped 5.4% since President Donald Trump’s April 2 tariff announcement, with day-to-day moves that are drawing uncomfortable comparisons to infamous financial periods like 2008 and 1987. The drop over the past seven trading days comes after the stock market had already had a rocky start to 2025, and other major U.S. asset classes have also started to slide, including the dollar and Treasurys.

“The big takeaway from this year, from the Trump presidency, from everything that’s happened, is that there’s a rotation out of the U.S. And obviously that’s become vicious now — with bond yields staying high and the dollar falling, it’s become the story. But that exodus started well before Liberation Day. ... U.S. is the bubble. U.S. All of it,” Marco Papic, BCA Research strategist, said Friday on “Squawk Box.”

The big swings in the stock market are eye-popping on their own, but Wall Street pros are becoming increasingly concerned about the moves in the currency and bond markets. Treasurys and the dollar typically benefit from flight-to-safety environments, a function of the U.S.′ historical financial strength.

But on Friday, falling bond prices pushed the benchmark 10-year Treasury yield briefly above 4.5%, up from 3.99% just a week prior. Meanwhile, the ICE U.S. Dollar Index hit its lowest level in three years. The greenback has seen particularly sharp drops against safe-haven currencies like the Japanese yen and Swiss franc, as well as the euro.

“The market is re-assessing the structural attractiveness of the dollar as the world’s global reserve currency and is undergoing a process of rapid de-dollarization. Nowhere is this more evident than the continued and combined collapse in the currency and US bond market as this week comes to a close,” Deutsche Bank strategist George Saravelos said in a note to clients Friday.

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Investors are growing concerned about a U.S. asset exodus as Treasuries and the dollar decline

Asset flight challenges US safe haven status

April 11, 2025

The US has long been considered a financial safe haven. The sell-off of the dollar, stocks and Treasury bonds in a spree sparked by panic at President Donald Trump's trade war is starting to raise questions about if that's still true.

- What happened this week to US assets? -

US equities and the greenback have been under pressure for weeks. This week, the volatility spread to the US Treasury market, long considered by global investors to be a refuge.

On Wednesday morning before Trump announced he was pausing many of his most onerous tariffs for 90 days, yields on both the 10-year and 30-year US Treasury bonds spiked suddenly. 

Trump's pivot -- which sparked a mammoth equity market rally Wednesday afternoon -- also provided temporary relief to the US Treasury market. But yields began rising again on Thursday.

"There's clearly a flight from US bonds," said Steve Sosnick of Interactive Brokers. "That money is flowing out of the US bond market and doing so very quickly."

JPMorgan Chase CEO Jamie Dimon rejected the notion that US Treasuries were no longer a haven, but acknowledged an impact from recent market volatility.

"It does change the nature a little bit from the certainty point of view," Dimon said Friday, while adding that the United States still stands out as safe "in this turbulent world."  

- Why are investors fleeing US bonds? -

The most obvious reason is that the near-term outlook on the US economy has deteriorated, with more economists betting on a recession due to tariff-related inflation and a slowdown in business investment amid policy uncertainty.

That's a big shift from just 80 days ago at the World Economic Forum where "everyone talked about US supremacy," BlackRock CEO Larry Fink said Friday.

Analysts also see the reaction as stemming from Trump's policies such as his "America First" agenda that frays ties with other countries and his proposed tax cuts that could mean bigger US deficits.

"Unconventional policies that gamble with a country's public finances and/or its growth outlook can cause bond investors to question the assumption that government debt is risk free," said a note from Berenberg Economics.

"The breakdown in the relationship between US Treasury yields and the dollar highlights the concerns of investors about Donald Trump's policy agenda," Berenberg said.

Analysts have said some of the selling in US Treasuries is likely from equity investors who need to raise cash quickly. There has also been speculation that the Chinese government could liquidate US Treasury holdings in the US-China trade war, although such a move would also badly hit Beijing.

More

Asset flight challenges US safe haven status

Mortgage rates surge over 7% as tariffs hit bond market

Published Fri, Apr 11 2025 1:55 PM EDT Updated Fri, Apr 11 2025 3:25 PM EDT

The average rate on the popular 30-year fixed mortgage surged 13 basis points Friday to 7.1%, according to Mortgage News Daily. That’s the highest rate since mid-February.

Mortgage rates have been on a roller coaster ride all week, as bond yields spiked higher mid-week when President Donald Trump’s new tariffs on dozens of countries went into effect. Yields dropped when Trump lowered the tariff rate on most countries hours later. Tariffs on Chinese imports, however, currently stand at 145%.

But bonds began selling off again Friday, despite a cooler-than-expected inflation report. Mortgage rates loosely follow the yield on the 10-year Treasury.

“There have been some bad weeks for bonds here and there over the careers of most anyone who’s alive to read these words, but unless your career began before 1981, you just lived through the worst week you’ve ever seen in terms of the jump in 10-year yields,” said Matthew Graham, chief operating officer at Mortgage News Daily.

Graham said there are two ways to look at where bonds are trading today: “This is either the end of the worst week for 10-year yields since 1981 or the end of a fairly average two weeks that fit right in with the trend of the past 18 months.”

On Friday, another monthly report on consumer sentiment came in substantially lower than expected. The expectation for inflation jumped from 5% in March to 6.7% in April, the highest level since 1981.

All of this comes right in the heart of the all-important spring housing market. For most consumers, a home is their single largest investment.

“Forget about housing in this environment, with mortgage rates back up, consumers certainly concerned about the job market, housing will also be on the weak side,” said Nancy Lazar, chief global economist at Piper Sandler, on CNBC’s “The Exchange” on Friday.

Mortgage rates surge over 7% as tariffs hit bond market

Covid-19 Corner

This section will continue only occasionally when something of interest occurs.

 

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

Pt nano-catalyst with graphene pockets enhances fuel cell durability and efficiency

April 12, 2025

The manufacturing and deployment of hybrid and electric vehicles is on the rise, contributing to ongoing efforts to decarbonize the transport industry. While cars and smaller vehicles can be powered using lithium batteries, electrifying heavy-duty vehicles, such as trucks and large buses, has so far proved much more challenging.

Fuel cells, devices that generate electricity via chemical reactions, are promising solutions for powering heavy-duty vehicles. Most of the fuel cells employed so far are so-called proton exchange membrane fuel cells (PEMFCs), cells that generate electricity via the reaction of hydrogen and oxygen, conducting protons from their anode to their cathode utilizing a solid polymer membrane.

Despite their potential, many existing fuel cells have limited lifetimes and efficiencies. These limitations have so far hindered their widespread adoption in the manufacturing of electric or hybrid trucks, buses and other heavy-truck vehicles.

A research group at the University of California, Los Angeles (UCLA), led by Professor Yu Huang, recently designed a new platinum (Pt)-based nano-catalyst, a material that speeds up chemical reactions and could help to improve the efficiency and durability of fuel cells. This catalyst, presented in a paper published in Nature Nanotechnology, consists of Pt nanoparticles, protected by graphene nanopockets and supported on a form of carbon known as Ketjenblack.

"Our research emerged from an urgent need to decarbonize heavy-duty vehicles (HDVs), such as long-haul trucks, which require extended operational range and durability," Huang, senior author of the paper, told Phys.org. "Fuel cells represent a promising solution for electrifying HDVs due to their superior system-level mass-specific energy density compared to batteries. However, a major obstacle is catalyst stability."

Platinum and other alloy metals typically used to fabricate catalysts for PEMFCs tend to gradually dissolve and some of their atoms are redeposited onto other particles, causing them to become larger. This process reduces the area of the catalyst that can speed up reactions in fuel cells, ultimately causing their performance to decline over time.

"Motivated by this challenge, our team at UCLA developed a Pt-based catalyst with an innovative protective yet permeable structure," said Huang. "Our primary goal was to design a catalyst architecture that effectively prevents metal dissolution and maintains high catalytic activity over prolonged use."

More

Pt nano-catalyst with graphene pockets enhances fuel cell durability and efficiency

Next, the world global debt clock. Nations debts to GDP compared.

World Debt Clocks (usdebtclock.org)

Finally, today’s information update for pub quizzes and nervous investors.

Are there snakes in Azores?

No, there are no snakes in the Azores.

Are there snakes in Azores? - Geographic FAQ Hub: Answers to Your Global Questions

Are There Snakes on the Canary Islands? Debunking the Myth and Revealing the Truth

The Canary Islands, known for their stunning landscapes and unique ecosystems, are a popular destination for nature enthusiasts. But amidst the breathtaking beauty of these volcanic islands, one might wonder, are there snakes?

The answer to this question might surprise you. Unlike many other regions around the world, the Canary Islands are actually snake-free. Yes, you read that right! These islands, located off the northwest coast of Africa, are home to a variety of flora and fauna, but snakes are not among them.

Are there snakes on the Canary Islands

Are There Snakes on Madeira Island Portugal?

Yes, there are snakes on Madeira Island, but they are not native to the island. The only snake species found on the island are introduced species, including the Algerian whip snake and the false smooth snake. These snakes are not venomous and are generally harmless to humans. While they may be a source of concern for some, encounters with these snakes are rare and should not deter visitors from exploring the natural beauty of the island. It’s important to remember that snakes play an important role in the island’s ecosystem and should be respected and left undisturbed in their natural habitats.

Are there snakes on Madeira Island Portugal? - Travel FAQ (2024 Edition)

Wildlife of Saint Helena, Ascension and Tristan da Cunha

Reptiles

There are no crocodilians or snakes on the islands. However, many sea turtles occur around the islands and breed on the beaches seasonally. Saint Helena has a small, introduced population of Asian house geckos, possibly the result of stowaways on produce shipments or cargo.

Wildlife of Saint Helena, Ascension and Tristan da Cunha - Wikipedia

Are there snakes on Manhattan Island?

Yes, but dangerous venomous snakes are entirely located on Wall Street, in banks and similar places of ill repute. These snakes are highly venomous and are always harmful to unwary investors.

Graeme.

“Markets can remain irrational longer than you can remain solvent.”

John Maynard Keynes

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