Saturday, April 5, 2025
In the two days following Trump’s reckless introduction of the opening round of a worldwide trade war, aimed at friends and foes alike, the stock market has lost trillions of dollars of market value.
China responded, “We see your tariffs, and we raise you our own tariffs. In addition, we increase our military pressure on your friend and business partner, Tiawan.”
At the same time as Trump rolled out his tariff schedule, which would, according to most economists, throw the country into a business recession, several major oil producers announced that they were increasing their sale of oil into a falling demand environment.
The combination of these two demand destruction actions put the stock market into a panic selloff mood last week as bad as the selloff in 2020.
How far down? No one knows, but I wouldn’t be surprised that if selling continues next week, the markets might find some temporary support around the SPY 4800 level, according to some technical analysis that I have seen.
As money flows out of the stock market, it might give a temporary lift to a safe haven alternative investment like Treasury Bonds. One other investment asset, which I don’t really trust, is the crypto currency, which has held up during the past week’s carnage. If Warren Buffett doesn’t own Bitcoin, why would I?
Of course, consult your own professional advisors for their advice before taking any action, as this is NOT INVESTMENT ADVICE!