Relief Rally: Markets Surge On Trump’s Easing Of Fed And Tariff Concerns

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The markets received a significant boost this morning from Trump, who softened his stance on Fed Chair Powell and China tariffs—two topics that had recently caused market turmoil.

First, he indicated that he does not plan to remove Powell from his position as Central Bank leader. Second, he expressed a willingness to adopt a less confrontational approach to negotiations with China, noting that the current 145% tariff on Chinese imports is “very high” and will be significantly reduced.

This was the signal the markets had been waiting for. Even a hint of easing tensions between the two countries brought relief to Wall Street, as traders and algorithms pushed the “buy” buttons, driving the markets sharply higher.

While this is a positive start, it remains to be seen whether this rebound has enough momentum to pull us out of the current bear market. Right now, it’s simply a relief rally, but is it based on false hope?

The markets ended the session off their highs as the headline ping pong continued, dampening the early euphoric reaction. None of today’s events were “new” news; it was merely a reiteration.

Bitcoin ETFs saw a massive inflow yesterday, propelling the cryptocurrency over $94k, its highest level since March.

Bond yields fluctuated wildly, first dropping, and then rising, yet rate-cut expectations fell. The dollar swung dramatically, while gold continued to slip but found support around the $3,300 level.

Uncertainty reigns supreme as the markets remain volatile, with no clear long-term trend direction in sight.

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Bitcoin Outperforms As Gold Slips And Dollar Recovers

Ulli Uncategorized Contact

[Chart courtesy of MarketWatch.com]

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Equities rebounded from yesterday’s selling spree, marking the fourth consecutive losing session, driven in part by global tensions and Trump’s recent criticism of the Federal Reserve.

Major tech players like Tesla, Nvidia, Meta, and Amazon all advanced, while manufacturing giant 3M reported better-than-expected earnings, boosting its stock by approximately 6%.

This earnings season has been frustrating, as the past six weeks have seen significant changes due to tariff policies, heavily impacting companies’ outlooks for the next year and bringing uncertainty to the forefront.

However, yesterday’s sell-off turned into a massive short-squeeze, erasing all losses after Treasury Secretary Bessent calmed nerves by indicating a potential “de-escalation with China,” calling the current situation “unsustainable.”

Bessent later acknowledged that this process might take months, which temporarily dampened upward momentum, but the indexes still managed to close near their midday highs.

The mega-cap sector rebounded strongly but couldn’t maintain its weekly gains. Bond yields ended mixed, while the dollar showed signs of recovery by erasing some of yesterday’s losses.

Gold surpassed the $3,500 level overnight but slipped during the regular session, whereas Bitcoin outperformed, reclaiming its $92k level and aligning with the direction of global liquidity.

Are new highs on the horizon?

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Gold Surges As Stocks, Dollar, And Treasuries Slump

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Equities began the week sharply lower due to ongoing uncertainty in global trade talks. Adding to the market’s woes was President Trump’s criticism of Fed Chair Powell, who remains committed to high interest rate policies.

Some traders view Trump’s attacks as a threat to the Fed’s independence, while others criticize his delayed responses, such as calling inflation “transitory.”

Currently, we are witnessing a simultaneous decline in stocks, the dollar, and US Treasuries, which has primarily benefited gold. Bitcoin also appears poised for its next major move higher.

Given the lack of clarity in the market, my advisory practice is focusing on assets that clearly demonstrate bullish tendencies, while observing the equity bear market from the sidelines.

The Mag7 sector saw significant declines, led by tech giants Tesla (-6%) and Nvidia (-5%), with Amazon, AMD, and Meta experiencing smaller losses.

Bond yields edged higher, the dollar plunged, and China increased its gold purchases, driving the precious metal up by over 3% to a record high. US macroeconomic data weakened, with the Leading Indicator falling to a 9-year low, intensifying calls for rate cuts.

Bitcoin’s rally and decoupling from tech stocks may signal the resumption of its bullish trend, aligning with global liquidity movements.

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 04/17/2025

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ETF Data updated through Thursday, April 17, 2025

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: SELL— effective 4/4/2025

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken below its long-term trend line (red) by -7.00% and has moved into “Sell” mode as of 4/4/2025.

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Major Indexes Close Week Down; Bitcoin Poised For Potential Surge

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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An early bounce quickly faded, leading equities to slip into the red on the last trading day of the week. The S&P 500 was the exception, managing to eke out a fractional gain.

The Dow suffered the most, primarily due to United Health (UNH) plummeting by 22% at one point after missing earnings expectations. Chipmaker Nvidia also retreated, dropping another 3.7% following yesterday’s quarterly charge of $5.5 billion related to its graphics processing units.

Adding to the bearish sentiment was Fed Chair Powell’s stance on Trump’s tariff policies, which he believes could drive up inflation in the near term and “is likely to move us further away from our goals.”

This contrasts sharply with his decision to cut rates last year when financial conditions were looser, as opposed to the tightened conditions now. Perhaps Powell is focusing on the strength in hard data rather than the soft data that tumbled this week.

The major indexes closed out another week to the downside, with markets closed tomorrow for Good Friday. Since Liberation Day, the major indexes are still down 7-8%, while the Mega-cap sector has been down 8 of the last 9 weeks.

Bond yields ended the week lower, and the dollar tumbled for the third straight week to its lowest level since the first week of October, as noted by ZH. This decline benefited gold, which surged to record highs.

Bitcoin gained for the second straight week but remains stuck at its 50-day moving average for now. However, historical liquidity suggests it might be poised for another significant rise.

Enjoy the Easter weekend.

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Gold Shines Amid Market Turmoil, Hits Record High

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Nvidia impacted the global tech market this morning by announcing a $5.5 billion quarterly charge related to its graphics processing units sold to China and other nations. The stock dropped approximately 7% on the news, losing $270 billion in market cap.

Other chipmakers followed suit, moving lower. Big tech also felt the pressure, with the Mag7 index dropping around 2%, and stocks of Meta, Alphabet, and Tesla pulling back as well.

The major indexes were in retreat mode as traders continued to navigate rising global tensions, despite some levies being put on hold for 90 days. However, Chinese goods were not included in this pause, leading to increased market volatility.

Midday, it wasn’t tariff uncertainty but Fed Chair Powell who unsettled the markets with his responses to questions about intervention if the stock market plummets.

Powell stated, “No, markets are doing what they’re supposed to do, orderly…” and “Clearly there is some deleveraging by hedge funds going on; you will see continued volatility.” He also mentioned, “The economy will likely be ‘moving away’ from both of its goals probably for the balance of this year.”

These comments dampened any potential bullish sentiment and discouraged dip buyers. Even a last 30-minute buying spree did not change the outcome.

Bond yields dipped, and the dollar slipped to its lowest level since early October. Bitcoin suffered volatility, racing first to $85.5k and then back down to $83.5k, eking out a small gain.

Gold ended up being the star of the show, with the precious metal adding almost 3.5% for the session, its best day since October 2023, while setting a record.

In my advisor practice, gold has been a core holding since February 2022, allowing us to build a solid foundation to protect against uncertainty and inflation with a fairly high allocation percentage.

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