2025-02-15 03:40:26 ET
Summary
- For the record, the S&P 500 gained 1.04% for the session, and the Nasdaq 100 jumped 1.43%.
- President Donald Trump is embarking on what may be his most disruptive action yet for the global economy by broadening his grievances to how other countries choose to tax and regulate.
- The Trump administration is looking beyond tariffs and non-tariff barriers to examine currency manipulation as it studies the issue ahead of an April deadline.
February 13, 2025: For the record, the S&P 500 gained 1.04% for the session, and the Nasdaq 100 jumped 1.43%. The Semiconductors rose 1.29% and the Russell 2000 1.17%. The Goldman Sachs Most Short Index surged 3.4%. The VIX declined 0.8 to a three-week low of 15.1. The MOVE (bond volatility) index fell two to a two-month low 84.57. Investment-grade CDS declined a basis point to 46.9, matching multi-year lows. High yield CDS prices fell 3.5 to a two-month low of 292 bps (only 10-bps above multi-year lows). Ten-year Treasury yields dropped 10 bps to 4.53%. "Risk on" across the board. The Ark Innovation EFT returned 6.4% this week.
February 14 - Bloomberg (Shawn Donnan): "President Donald Trump is embarking on what may be his most disruptive action yet for the global economy by broadening his grievances to how other countries choose to tax and regulate. Trump… ordered top economic officials to calculate new US tariffs based on the total tariffs and tax, regulatory, currency and any other barriers that US exports face. The new 'reciprocal' duties would be calculated country by country. They will be laid out in a series of reports due by April 1 that officials said would first examine the economies with which the US has the largest trade deficits. 'The numbers are going to be very fair but staggering. They're going to be large,' Trump told reporters in the Oval Office as he signed a memorandum ordering up the new tariffs."
February 14 - Reuters (Susan Heavey): "The Trump administration is looking beyond tariffs and non-tariff barriers to examine currency manipulation as it studies the issue ahead of an April deadline. U.S. Treasury Secretary Scott Bessent said… 'We're also looking at currency manipulation,' Bessent said… 'The U.S. has a strong dollar policy, but because we have a strong dollar policy, it doesn't mean that other countries get to have a weak currency policy.'"
A few relevant headlines: "Fearless Wall Street Traders Refuse to Panic as Tariff War Rages." "Tariff Man Strikes Again - And Markets Ignore Him." "Markets Shrug Off Tariffs Threat. Tariffs, Schmariffs." "Mexico Peso Gains as Trump Tariffs Seen as Bluff."
Bloomberg's John Authers: "This was the day many around the world had feared, when President Donald Trump summoned the media to the Oval Office and declared all-out trade war. Then markets responded with relief and made clear they didn't believe a word of it."
New York Times Dealbook: "'Markets had to decide whether the president was being a protectionist or a pushover, and for now, are erring toward pushover,' Paul Donovan, the chief economist at UBS Global Wealth Management, wrote in an investor note... 'The delay is seen as an opportunity to do 'deals'."
I'd believe him on this one. Wouldn't bet on President Trump being a pushover. Of course, there will be deals, but there will be no negotiating away the President's expansive reciprocal tariff regime....
Read the full article on Seeking Alpha
For further details see:
Weekly Commentary: Declaring The Reciprocal Tariff Regime
