Thank you, Uncle Trump!
Thank you, Uncle Trump!
That’s one of the most common refrains from my Asian friends when they approve of something President Trump has done.
It’s what immediately jumped to mind when I saw that gold rallied another $66 today.
That was clearly a reaction to the statements from the President about his reluctance to approve a deal with the EU and his warning to Apple that they should be building iPhones in the USA.
Only a few days ago I warned that volatility was cheap.
The VIX Index briefly hit 25.5 today. That’s a trough to peak move of 42% this week.
The challenge is that the market first sold off on the announcement of tariffs in the belief that President Trump was totally committed to the program.
Then, when a 90-day hiatus was announced there was a relief rally that quickly took the market back to where it was before Liberation Day.
That was on the assumption the trade war is over.
What we had today was some evidence that the trade war is not over. It remains to be seen if the 90-day hiatus is in fact the end of the extra tariffs or whether it is truly a hiatus.
I believe that somewhere in the middle of the two extremes is the correct assumption of what we should expect.
That implies there is plenty of room for disruptions.
