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Are The Machines Done Selling?
Early Monday, I revisited "doom loop" dynamics.
A fixture of modern market structure is the interpl
Thanks. Thus we rally.
Illiquidity works in both directions, it will be interesting to see what happens next.
Investors starting to bet on flurry of deals resulting in something like i) 10% tariffs on Everyone But China (EBC), ii) tariffs less than 145% and more than pre-4/2 levels on China (call it 50%?), iii) various industry specific tariffs (semis, pharma, etc), and lots of exemptions, pauses, delays, etc so that big, influential companies, industries, and interests don’t get crushed (what is big and influential enough unclear, but small biz and consumers probably don’t count).
As H says investors also think we know where put strikes are, on 10Y and SP500.
So we can focus on picking the names that will do well in that new cost/demand environment. Investors also think recession remains significant risk (prediction market odds just over 50%) so some recession-tolerance also good.
What’s risk to our new equanimity? Xi could say “nope, not taking 50%”, EU could say “nein to 10%” or “non to US beef”, investors could be surprised how much margins/earnings decline, Reps could figure out that 10%/50%/exemptions doesn’t raise enough tax revenue for tax cuts, etc.