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Today, US tarrifs were announced after market close. Minimum 10% rate across the board for all countries with some exceptions (notably Mexico and Canada). Very large tarrif rate placed on goods from China and SE Asia, some over 40%. The executive order also eliminates de minimus exemptions meaning there are no longer any goods free from duties (previously <$800).

Tarriffs seem to be calculated based on trade deficit and are not in fact reciprocal tarrifs as advertised. SP 500 futures are currently down 3.25% on the news and companies with operations reliant or based in China and SE Asia much more ( for example Apple, clothing companies, Wal Mart etc).

It should be an interesting session to say the least tomorrow...Curious to see what's green in what seems likely to be a sea of red. My guesses are gold and some energy companies.

I have a portfolio of 43 dividend stocks, mostly European companies, and was very pleasantly surprised to see it initally fall by only 0.5% in the morning (seeing how the SP500 futures are at around -3%). It's now down by around 1%, whereas European large cap indices are down by 2-3%. I tried to make my portfolio tariff-proof, and it paid out so far. In a few stocks where I diverged from that for diversification (I wanted to have a couple manufacturing companies), I got punished.

This is why I sold 100% of all my US Stock index ETF funds last month. Number one, I can't invest in a country threatening to annex mine. Number two, I knew that DJT would continue to be disconnected from any reality and run the alienated US economy ship right into the ground. Like zbigi I moved all those funds into EU and Global Ex UnitedStates.

Great timing, congrats
This is one of the times when my defensive portfolio tends to shine.
The numbers are moving really fast, but I have about 4-500 basis points over performance vs the S&P without accounting for the euro appreciation
These are going to be interesting times.

NM ... promised myself I wouldn't discuss investments here anymore

US Bond markets are blowing up tonight.

10 yr yield has risen 21 bps in last few hours. 30 yr yield is up to 5% and has risen 67 bps in last 2 days. Both are at the very upper range of most volatile movements since 1990.

What's coming next? Is cash the only safe haven right now?

Cheers for me, the broken clock that's right twice a decade /jk

theanimal wrote: ↑

Tue Apr 08, 2025 11:33 pm

Is cash the only safe haven right now?

And maybe non-US government bonds, like Swiss.

theanimal wrote: ↑

Tue Apr 08, 2025 11:33 pm

Is cash the only safe haven right now?

With all this talk about Mr Trump being hell-bent on devaluing the dollar, I wouldn't say cash (as in USD) is safe either.

I suppose you just have to see the funny side of it all.

Indeed, it is a wild market.

Mid session, Trump announces a "pause" on the proposed tariffs for all countries, reducing the tariff rate to 10% across the board. China is the exception, and the tariff rate against Chinese imports is increased to 125%. The market goes wild on the news with SPY gaining 9.52% on the day. Some big companies rose even higher, like Apple, which jumped 15%.

There is no rhyme or reason and the market seems to be full on animal spirits at this point. Besides today, this was particularly evident on Monday when in the span of 30 minutes SPY shot up 4% on the reported rumor of a 90 day pause, then dropped 5% when it was denied by the White Houes and determined to be false. It is moving on whims and headlines. I suppose that isn't much different than what it's been. But for the time being it's concentrated on the whims of one individual.

The US' effective tariff rate (weighted average of global tariffs) started today at 32% and with the "pause" is down to 25%, not far off from where we started than day as well as more than 10x the effective rate of any comparable nation. I don't understand how the news is bullish, or why companies like Apple (who still have massive operations in China) rise so much on the news.

I am taking this as an opportunity to better position my portfolio for what is to come. I've trimmed my energy holdings and am building up my cash reserves. The only safe haven equity wise over the past few days seemed to be consumer staples. I don't plan on adding anything in the near future, but will be keeping an eye on my watch list.

My faith in the US equity market has collapsed after seeing how easy it is for unscrupulous agents to rig to their advantage. What are some other types of investments to look at?

I can think of:

real estate
housing rental
mortgage lending
business loans
gold, metals
farmland
start a business
duplex, apartments
foreign exchange
commodities
airbnb

sky wrote: ↑

Wed Apr 09, 2025 9:08 pm

My faith in the US equity market has collapsed after seeing how easy it is for unscrupulous agents to rig to their advantage. What are some other types of investments to look at?

I can think of: ...farmland...

Direct ownership of forestry land. Natural inflation proof biomass growth of ~3.4%. With a reliable maintenance and harvesting partner, this should result in relatively hands-off cash flow. Basic financial engineering can up your yield a bit without no hedging required, or significantly with hedging.

Typically, direct ownership pitfalls are qualitatively different:
- high cost of entry:
- research
- legal barriers to entry: foreign nationals, certification,
- real estate transaction cost
- ...
- maintenance. Much lower than farmland, but you're dealing with a physical asset.
- limited diversification
- geographical. You're vulnerable to natural disasters (fire, infections, ...), harvest theft, ...
- product. You only have wood to sell, likely of a specific kind.
- taxation. You're a sitting duck. You're probably fine as long as you don't stray too far from what the local upper middle class does.
- title safety. government expropriation, mob takeover, ...
- regulations. What if your land is suddenly declared a no harvest protected area?
- geopolitics. What if you own internationally and the links between countries get strained? This is about more than war. Think tariffs, customs procedures, ecological regulations. Northern Ireland, Lebanon, Ukraine, US, ... Against most of this, you can build resilience if not too dependent on a regular cash flow.

I'm majorly overexposed to the Baltics already. Still tempted to buy some woodland here and thoroughly hedge against the geo risk.

I'm disinclined to try to outguess the varagies of the financial markets. The tariff swoon in was, in magnitude, not the worst I've endured. And in 90 days it's apt to play out again. If the administration achieves some success in their goal of boosting strategic national security manufacturing capability in the US--the feeder industries to maintain self-sufficient infrastructure: energy, transportation, communication, food, healthcare, etc., I think the broader stock market might benefit, rather than market gains being dominated by a handful of stocks in the megacap growth sector. But that's not anything that is going to cause me to change tactics or strategy in the near term.

It's a good thing insider trading is banned otherwise certain people could have made a lot of easy money last night.

loutfard wrote: ↑

Wed Apr 09, 2025 10:23 pm

forests

Depending on where the forest is, there might also be climate change risk. Poland is already predicting that her forests will be in trouble in coming decades, as they don't do well in mild to moderate droughts that are now becoming increasingly common here. Also, climate change often means arrival of new kinds of pests.

theanimal wrote: ↑

Wed Apr 09, 2025 6:10 pm

the tariff rate against Chinese imports is increased to 125%. The market goes wild on the news with SPY gaining 9.52% on the day. Some big companies rose even higher, like Apple, which jumped 15%.

This is hard to explain. Yesterday's announcement was terrible for Apple, as the tarrifs on their goods, largely made in China, just went up massively. Apple has some plans with routing some of its products via India, so maybe that's what people are clinging to. But +15%?

There is probably an expectation of more carve-outs. There was talk of relief for products where the bulk of the value is added in the US, I wonder if this is now expected.

zbigi wrote: ↑

Thu Apr 10, 2025 8:23 am

This is hard to explain. Yesterday's announcement was terrible for Apple, as the tarrifs on their goods, largely made in China, just went up massively. Apple has some plans with routing some of its products via India, so maybe that's what people are clinging to. But +15%?

At @theanimal aptly observed, 10 and 30 year treasury yields skyrocketed. The US regime was gambling with the USD's status as the world's reserve currency. The US and the USD have suffered limited permanent damage.

Whoever benefited from the anxiety and volatility decided they would benefit more in other ways and signaled that.

Companies with tariff problems can circumvent those by paying tribute to the president. He's alluded to that clearly and publicly.

loutfard wrote: ↑

Thu Apr 10, 2025 9:59 am

At @theanimal aptly observed, 10 and 30 year treasury yields skyrocketed. The US regime was gambling with the USD's status as the world's reserve currency. The US and the USD have suffered limited permanent damage.

Whoever benefited from the anxiety and volatility decided they would benefit more in other ways and signaled that.

Companies with tariff problems can circumvent those by paying tribute to the president. He's alluded to that clearly and publicly.

Those yields did jump during "tariff week" but they had fallen just as sharply immediately before, and neither reached the 12-month highs they were at earlier in 2025. I'm not a bond market savant, but just looking at yield charts nothing looks terribly out of place compared to recent activity. I must be missing something?

I believe the primary way the administration could damage reserve currency status is to ignore the deficit and the debt. To me, that's the elephant in the room. It's not like the US is introducing tariffs into a world with a totally free and fair trade market up until two weeks ago.

It would make sense to put in carve outs for high domestic value-added imports, but I hope they don't do it. That's just a first step towards an equally bad system where the gov't is picking winners and losers. I'm still hopeful enough significant trade partners agree to lower bidirectional barriers that the holdouts won't throw a wrench into the works. We'll see over the next 90 days.