Trump reverses tariffs, sparks historic market rally as Gold surges

• It was a Buying Frenzy…. Stocks Surged! Shorts got HAMMERED.

• Trump announces a Tariff Pause.

• Pond market came under pressure – What happened?

• Oil has a $7 swing, gold attempting to (re) kiss the heights.

• Try the Nidi Di Tagliatelle.

It was 1:18 pm on Wednesday April 10th – markets were struggling to find it’s ‘chi’ as investors continued to try and price in all of the headlines around the drama unfolding around the world - tariffs, earnings and companies refusing to give forward guidance due to the economic uncertainty, eco data, a bond market that came under pressure sending rates surging – feeling like it was about to ‘blow’, falling oil prices, rising gold prices and the ‘trade war’ that appeared to be getting worse….WHEN……

The headline hits the tape, and Trump takes to Truth Social – Reversing course! Announcing a 90 day pause on reciprocal tariffs, a willingness to negotiate on trade while at the same time tightening the screws on China – raising those tariffs to 125%..... and investors, traders and algo’s exploded with excitement……

Sellers – who have been main character of this latest chapter that saw nearly $10 trillion of ‘price adjustments’ across global markets since Liberation Day – cancelled orders (leaving that void that we discussed earlier in the week), becoming buyers when the news hit – tripping over each other to ‘get back in’ – and the shorts? Oh boy, they got creamed as stocks soared….only adding to the excitement as they too scrambled to reverse their bets and buy stocks to cover positions only pushing stocks higher and higher – while those of us who did not panic during the drawdown or dare I say even put money to work during the drawdown watched the drama unfold…..

By the end of the day – it was a dramatic and historic ‘rip your face off rally’….the Dow gained 2,962 pts or 7.8%, the S&P up 474 pts or 9.5%, the Nasdaq added 1,857 pts or 12.2%, the Russell up 152 pts or 8.7%, the Transports gaining 1,275 pts or 10%, the Equal Weight S&P up 495 pts or 8% while the Mag 7 rose 2,801 pts or 14.4%!

This morning the WSJ plastered the move across their Thursday morning edition –

STOCKS ROAR BACK WITH S&P 500 CLIMING 9.5%

Now – while that’s all good – a couple of thoughts – first – the market is still below where it was at the start of the quarter and this trade ‘shock’ (not war) is far from over…. And in the end – all this does is confirm what I have been saying for 2 weeks now…….the markets are very anxious and the reaction to every headline is dramatic – In the end – this is not over yet….the news out of DC will continue to dominate the headlines, but investors will try to once again begin to focus on the broader economic and earnings data and more importantly – the earnings guidance - that is about to hit us…and since there is also a bit of uncertainty concerning the guidance – we can expect the turbulence to continue.

Of the 11 S&P sectors – Tech rose 13.4% and Consume Discretionary rose 11% clearly the outperformers of the group…. – and that makes sense since they have been the underperformers all year. Industrials, Basic Materials, Communications, were all up more than 8%, Financials and Energy gaining 7.5%, Real Estate added 5.75%, Healthcare added 4.3% while Utilities gained 4%.

Down the chain – Disruptive Tech added 16%, Semi’s 18.5%, The triple levered long – SPXL gaining 27%, Aerospace and Defense added 9.5%, Big Pharma – PPH up 3% while the Value Trade added 7.7%.

Now – overnight – global markets responded to the US action…. Asian stocks notching like gains…Taiwan – a market center that has suffered the most – gained 9.25%, Japan +9.2%, South Korea + 6.6%, Australia + 4.5%, Hong Kong adding 2% while China added 1.3%.

In Europe this morning stocks there are also higher…. Italy up 6%, Germany, Spain, France and the Euro Stoxx up better than 5%, while the FTSE (UK) is ahead by 4%.

But interestingly enough (or maybe not) – US futures are in decline and that should also not surprise you after yesterday’s action…. Dow futures -600 pts, S&P’s down 105, Nasdaq -425 pts while the Russell is down 55 pts. In the end – it continues to be a roller coaster, and it continues remind us that if there is one truth for the markets – it is that they do not like ‘uncertainty’. And that is all we have seen and apparently will continue to see until we don’t.

Now bonds had a wild day in a classic flight-to-cash morphing into cautious stabilization. The mornings significant selling reflecting broader global market unrest tied to U.S. tariff policies and economic uncertainty. Reuters report that hedge funds were unwinding leveraged "basis trades" (buying Treasuries with borrowed money to arbitrage futures) as a key driver, forced by margin calls after a $29 trillion market swing.

The benchmark 10 yr U.S. Treasury collapsed causing yields to spike, reaching a high of 4.51% before retreating to end the day at 4.32%. This followed a volatile week where yields had already climbed from a low of 3.85%. The 2-yr yield hit 4.01% after yielding 3.47% last week. …all while the 30-yr hit 5.02%, a level not seen since November 2023, before easing slightly to end the day at 4.73%.

Now, the panic in the bond market subsided after a 10 yr Treasury auction mid-afternoon met expectations, easing concerns in demand. This pulled yields off their peaks, as U.S. stocks rallied. There were also all kinds of speculation about foreign selling (think China) – but so far there is no hard data confirming it; the auction’s success suggests domestic demand is fine.

Oil had a $7 swing – going form $62 - $55 ending the day back at $62.35. as the market convulsed with each headline…. the ongoing China drama coupled with the tariff pause sent oil down and then up. This morning oil is down $1.40 at $60.85. Now, like we have been discussing - $55 was a target that we identified by the charts earlier in the week….and so the fact that we traded down, found support and then bounced is not a surprise. Oil remains in the $55/$68 trading range.

Gold is once again surging…up $56 – now trading at $3,135/oz….. The primary driver? The renewed safe-haven demand sparked by escalating U.S.-China trade tensions, amplified by tariff pauses for other nations…. Today’s surge, despite yesterday’s pause, only reigniting fears of economic fallout, inflation, and a broader trade conflict with China. I suspect – that gold will retest the highs seen last week at $3200 as the conflict continues to play out.

Today we will get the March CPI report…and it is not expected to surprise – so the surprise will be if it surprises! Tomorrow will be the PPI report…and that is expected to tick a bit higher…keeping the ‘sticky inflation’ narrative alive.

Remember - there is no reason to ‘rush out’ and be an aggressive buyer…. Patience is a virtue, and the recent action has only confirmed that narrative. Earnings start this Friday – with the Banks…..And then Tax Day is the 15th…..

The S&P closed at 5456 – up 474 pts….Now, yesterday I said that I fully expected us to retest the Monday low of 4835 at some point – as markets try to find out if buyers will take a stand to defend the position – I guess we don’t have to worry about that right now…but let’s see how this plays out…We have now filled the gap created on April 4th…but still need to fill the gap created on April 3rd….A look at the futures suggests that that is not happening today….but he hasn’t posted anything on Truth Social yet!!!! So, sit tight.

Tagliatelle nests – A great easter starter

For this you need the Tagliatelle nests – you buy them this way in the store. Then you need a hearty ragu – so you need garlic, carrots, celery and onions, Olive oil hamburger and pork meat, s&p, crushed tomatoes, fresh basil and mozzarella bocconcini.

Now I am making the ragu. Start with the olive oil, garlic and the chopped veggies. Sauté. Then add the meat and cook until it is all browned. Now add in the crushed tomatoes, season with s&p and fresh basil. Allow to simmer on the stove for 2 hrs.

When ready – Preheat your oven to 375 degrees.

Now put a layer of the sauce on in the baking dish – add in the ‘nests’ – lining them up side by side until you fill the dish. Now – add more sauce on top of the nests, sprinkle with fresh grated parmegiana cheese and then tuck a bocconcini into each nest.

Cover and place in the oven and cook covered for 35 mins…. then remove the foil and bake for another 5 – 8 mins.

Remove – let cool for 5 mins and then serve.

Enjoy.