저자: Kevin · 외국인
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미중 무역 갈등 심화로 시장 충격 우려. 미국 선물 1% 하락, 금 사상 최고 3,400달러 이상, 유가 하락, 10Y-2Y 스프레드 62bp로 쇼크 수준. 경기침체 확률 90%(Apollo 인용), 중소기업이 미국 자본지출 85% 담당. 리테일은 아직 항복하지 않았고 헤지펀드만 매도. 본인은 Fed 패닉 시점까지 매수 대기 선호.
다듬은 글
The trade war with China and the United States is getting worse and not better. A lot of folks had hoped that this weekend we would get some good progress on trade negotiations, but it turns out we got the opposite. We got worse problems with China. Threats now from China against the United States and a lot of other countries around the world.
On top of this, markets reacting with the classic sell America news. So far, index futures down 1% across the board for US stocks. Gold skyrocketing to all-time highs over $3,400. Oil falling under recessionary fears. Yeah, we'll talk about that as well. And worse, the 102 spread for those of you following the bond market, 62 basis points.
This is shock level, which isn't great. also comes, by the way, as Mark Zuckerberg of Facebook just dumped $733 million of stock in the first quarter. That's almost a billion dollars that Zuck dumped. Maybe this is because some people believe that recessions will really negatively affect advertising based stocks, which Meta is one of the largest of.
But even Jaime Diamond over JP Morgan dumped $233 million worth of stock. So, some people are kind of scratching their heads going, "Oh, wow. This is a lot of dumping by these executives. What do they see coming? Well, I doubt the trade war with China escalating this far is what anybody saw coming. And so, I wonder if that selling will continue from some of these execs, but we'll see.
So, here's what's going on. The elephant in the room this weekend was really China. And that's because China has so far been relatively unwilling to bend to Donald Trump's negotiations. And Donald Trump isn't used to that. Donald Trump is used to most corporations or people in the United States at least bending the knee to him potentially out of uh a fear-based motivation.
Companies don't want to lose business. They don't want to get uh legally in trouble. They don't want an army of Trump lawyers coming after them, so to speak. Uh and they don't want, you know, funding that comes potentially or is directed by the US government to be stripped away from them. Uh so bending the knee of Donald Trump has been very very common for a lot of businesses.
I mean we saw it. We saw this complete U-turn even at companies like Meta and that actually really helped those companies stocks saw their stocks skyrocket under the support for Donald Trump. Now though that same sort of support for Trump that people thought China would bring to negotiations that they would bend the knee to Donald Trump is really being met with a complete opposite reaction.
China now issuing a warning that anyone that makes a trade deal with the United States against a China will receive quote reciprocal counter measures immediately from China. So think about this Trump used to people bending the knee to him used to for example Japan coming saying hey what can we do to trade with you?
Mind you, rumors are suggesting that the Trump administration actually had a challenging time putting together what they wanted from Japan. And so, Japan just left without a trade deal. Maybe because we haven't really figured out exactly what we want from other countries yet, which isn't great. Donald Trump posted on Truth a list of about eight different things that he wants to see from countries.
But the problem is it's not entirely clear which apply to which countries. So, for example, on his quote non-tariff cheating list, no currency manipulation, which mind you, our dollar can weaken and fluctuate as well in response to tariffs, uh, no VAT taxes, no dumping below costs, no export subsidies, other and other government subsidies.
So in other words, that would be somewhat like saying if we subsidize the green energy sector like uh you know electric vehicles that would create unfair competition against other electric vehicles of other countries which again that's an example of us doing it. Donald Trump says that is also considered a tariff style of cheating.
Anyway, protective agricultural standards, none of those. Doesn't want those. Doesn't want protective technical standards. No counterfeiting IP theft piracy. This makes sense. and no trans shipping to avoid tariffs. In other words, shipping products through different countries. But again, explaining exactly what they want from each individual country seems to be a challenge and it seems to be what's delaying a lot of these trade negotiations.
And in order to try to force deals against China, there's been talk that the Trump administration has been trying to get other countries like Japan or Taiwan or South Korea to basically promise to do less business with China and more business with the United States. But because tariff policy has been so unclear, the opposite is happening.
other countries and even blocks like the European Union, the Azian block or other Asian countries saying, "Yo, we'll just work more with China because at least there we have a pretty clear outline of what to expect." And China is capitalizing on this. China has been preparing for this moment probably for the last 8 years and now they're really taking advantage of the clarity that at least people get potentially when trading with China.
Now, here's just an example of some of the Chinese propaganda, but frankly, when you look at it, it's like, it's not entirely untrue. China is committed to. And hey, quick note, those of you looking to diversify, make sure you check out househack.com. You can see what we do with real estate, how we're buying the dip later this year.
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We do it all for you while you get that 5% yield and . Check it out. Go to househack.com. You can learn a whole lot more about what we're doing, how we do it. You can see the actual buildings that we own. So, go to houseack.com to learn more. Opening up. Give all the latest developed countries zero tariff.
Uh, basically zero tariffs. Uh, national negative list for foreign investments slashed. Remove all market access restrictions. Okay. And then on the US side, they allege that we have frequent changes in US tariff policy which is unsettling the global stock market. Basically making it hard to do business with the United States.
US frequently launches launches industrial investigations in the name of national security. This, by the way, is being compounded now by China's push to get Huawei to manufacture as many chips as possible to kind of beat up on the US's Nvidia, which makes sense. Here's just another example, though, of which is one of the reasons why, by the way, Nvidia stock is down uh a bit here in pre-market, down 3.2% in pre-market.
But here's just another example of at least some of the Chinese talk that uh that is going on. Chinese embassy in the US reposts this uh post here where an individual says we will continue to open rather than close our doors. Tear down rather than erect barriers, empower the world rather than focus solely on self-interest and bring more stability and certainty to the world with our highquality development and high standards opening up.
Uh so in other words, China say please and we've talked about this for weeks but China is basically doing the you know open spread the legs basically. Oh, come to me, baby. Whereas the United States is like, we we want certain requirements. All right. What kind of requirements do you want? Well, I haven't figured it out yet.
Give me everything. And and that's probably why we just haven't actually seen deals announced yet. So, there's this talk that Donald Trump is going to make all these deals, but we're not seeing them yet. Instead, we're seeing the opposite. And this is why the Wall Street Journal is now reporting that these tariffs and this tariff warfare tariff warfare is sort of like a new cold war.
That really one of the reasons we didn't have a cold war with China previously is because we had trade. You know, this is basically the democratic peace theory at work. The more we trade, the less we fight, the less we war. Uh and so there's this idea that trade was the glue uh that kept China and the United States together.
But today, it's becoming harder to argue that we're not in a new cold war. And we're going to probably see more and more of either CL producing newer, more globally competitive batteries, BYD, more globally competitive vehicles, Huawei, more globally competitive AI chips to really try to reduce the United States's dominance in these pretty growthy sectors, which is to the detriment again of the United States.
I mean, per Bloomberg, Boeing is now flying back somewhere around 160 Boeing 737 Max jets that China ordered, and now they're refusing and they're like, you know what, take them back. We don't want your American jets, which is quite interesting because they're manufactured with a lot of Chinese intermediate parts, but whatever.
Canada uh is also now promising to cut taxes and focus on uh basically going into deeper debt to reduce its reliance on the United States. And I think a lot of people forget that this is exactly what countries will do is they will they will take on more debt to get through this recession that's coming whereas at the same time the United States is relatively unwilling to take on more debt.
Uh and so this makes growth in the United States not look that great. I mean Apollo put together some interesting uh research. They actually think we now have a 90% chance of going into recession. Uh you could see I didn't post that on here. we have a 90% chance of going into recession. Uh but one of the the sort of the supporting documents that they put with this was that small businesses account for 85% of capex in the US economy.
And I thought that was interesting because initially we we think of Meta and Nvidia and Microsoft as these sort of big capex plays in America, but that might only actually represent 15% of our economy according to Apollo. that small businesses are really what drive our economy. We know they employ about 48% of all employees.
Small businesses do. But to account for 85% of all capital expenditures, you know, infrastructure spending, uh machinery, uh electrical infrastructure, you name it. This was surprising to me. Uh and so they say we face significant headwinds including not just tariffs but retaliation, lower tourism, uncertainty about how permanent tariffs are, lower confidence, lower corporate confidence, negative wealth effects, Doge laying off workers.
All these things together are negative externalities that are essentially directly affecting our economy. Now, uh Goulby was on CNBC this morning and he says, "Look, we we really just have to get through this. Imports are only 11% of the economy, so maybe tariffs won't be that bad, but we're going to have to get through this waited out period where people decide not to spend and see what kind of damage that actually causes to the economy.
Is this going to be like a COVID level shock or what?" See, a lot of people are begging on social media right now about how, oh, well, true inflation is low. The Fed should cut. Yes, inflation reports are low right now, but that doesn't mean they're going to continue to be low in the face of all of these tariffs.
Apple now moving iPhone 16e production, for example, to its Brazil Foxcon plant. But how much is that going to get tariffed? We don't know yet. We have a 90-day pause, so technically only 10%, certainly lower than what we're getting in China. But then again, you have uh certain tariff exemptions in China with the exception of the fentanol tariffs.
So there's a lot to navigate here. And can Apple produce enough phones in Brazil? So until we get these answers on where we're going to be with tariffs, it's very difficult to determine where the economy is going to go. And it seems like most analysts on Wall Street are now positioning for a US recession of some form.
Now, typically what you find is in, you know, 2005, 2006, everybody argued that we were facing a soft landing. This would just be a slowdown that we're not going into any kind of recession. But what happens is remember that 102 spread I talked about that was now over actually 60 basis points. When this is above 50, we are primed for what I call a shock.
We don't necessarily know what that shock is going to be yet. uh but that shock makes us very vulnerable or or we become very vulnerable to a shock when treasury spreads are above 0.5 after we've fully uh inverted and deeply inverted like we had uh following uh co just over the last couple years here and so what we now face is a shock situation in the bond market which is probably driven by people basically buying shorter term bonds not having the trust in the longer term bonds So the longer end of the curve is getting sold off anti-American.
The shorter term gets bought as a nearer term hedge. Now we're shockprone. And the question is what happens? Like where's the credit event? Is it a BNPL credit shock? Is it a leveraged buyout shock where all of a sudden businesses can't get access to credit anymore? We don't know what it's going to be.
This is sort of that black swan moment. But what we do know is that this drama with China getting worse, not better, increases the odds on a daily basis that we are going to experience some form of incredible shock. And yet, so far, we have not seen retail capitulation in the stock market. So far, most people have been buying the dip.
At least in the retail community, it's mostly just been hedge funds that have been selling. So the question is, should we keep buying the dip or do we wait for a shock in the Jerome Powell Federal Reserve 180 and complete bailout of markets? Right now, my preference is to wait, but everybody's got their own POV.
I like waiting for when the Fed is panicking because that's usually when everyone is panicking and that's when I like to buy. That said, let's see what happens. Thank you so much for watching. I appreciate you and we'll see you all o.
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