The MAGAnomics Market - Trump Update

Hello all and welcome back to Nolan's Investment Notion's blog post number eleven! This post is going to be an update post on all the craziness surrounding Donald Trump, from the tariffs we have covered before, as well as new macroeconomic data and geopolitical tensions that are heating up with regards to Trump. The market has been pretty crazy recently, and I don't believe that is going to slowdown anytime soon. We are currently living in a Donald Trump era where pretty much anything he says goes, allowing him to manipulate the market at the push of a button, it seems every time he posts a tweet (or "Truth") with the word "tariff' and phrase "MAKE AMERICA GREAT AGAIN" the bears jump onto the SPY and take it down a waterslide. The market is extremely volatile and people are reacting to news sharply and erratically, so, lets breakdown some of the current affairs causing this market overstimulation.

To start this off, before getting into the new stuff I will just give a brief update on where the tariff situation stands. Trump increased steel and aluminum tariffs from 25%-50%, which he does in an attempt to protect domestic metal producers, but this will ultimately raise downstream costs in sectors like auto, construction, and packaging. Countries like Canada and China are currently discussing retaliatory tariffs, and I believe this back and forth trade war between countries will continue on for a little while longer. The truth about these tariffs is that we have not really seen the impact yet, all the market movement that has happened this far has been purely speculative and news driven. Financial markets are delayed, and these tariffs need time to work themselves into consumer pricing, which I believe will start to happen around Q3 at the earliest, and unfortunately means the markets may have not yet seen the worst of what's to come.

Earlier I mentioned "market overstimulation", what did I mean by this? Well, imagine you're at a techno-circus-pop-up-coffee-fair-book-reading-conference-rave… in a laser-tag arena… during a dog fashion show… hosted by a guy on stilts yelling motivational quotes through a megaphone while free-roaming alpacas gently chew on beanbags next to you... that's kind of how I imagine the market feels right now. You have positives like Fed and BoC rate cuts being priced in for latter 2025 (which improves equity valuations), however you also have Trump's tariffs hurting equity revenues and shrinking profit margins, but we are also in a massive revolutionary AI boom along side niche sectors like quantum computing soaring through the sky, but then you also have geopolitical tensions like the fear of Trump dropping the MOAB (Mother of All Bombs) on the capital of Iran... ya, it's a lot. The debate over this market growth slowdown being a soft landing or recession is heating up, and unfortunately I am still leaning towards recession.

Trump has been quite Trump-like recently, calling Jerome Powell, the chair of the Fed, the dumbest person in government, and names like "numb-skull". He also left Canada from the G7 early because of Iran war tensions heating up, and releasing tweets saying "I said Iran cannot have nuclear weapons" and telling everyone to evacuate the capital, Tehran, insinuating he was going to do something. As of right now, the U.S is holding off from getting too involved in the war, but we all know it is just a matter of time, especially with Trump's finger hovering over the button.

The reality is with the market behaving like this right now, it is just waiting for one more straw to push it over the edge and for investors to finally agree on a direction for the time being, which with the current world affairs right now, I would say will be a negative bias. My two-cents in this situation; keep your money safe, buy defensive sector equities like healthcare and consumer staples, buy commodities like gold and silver, but don't be too afraid of mega-cap tech companies that are revolutionizing right now with AI like Meta, Google, Nvidia, MSFT, etc., as the world is evolving with the development of AI right now, but just be cautious.

Thank you all for very much for reading and supporting, I hope this quick Trump update provided some sort of value to you, or gave you a little more insight on the current state of the market. Remember, don't marry a bias right now in these unprecedented times, and keep your money safe. I will talk to you all in the next post!

Nolan Kushnir.