Newsletter for week ending 4/12

Introduction

• This was a wild week in the market with great days but also bad days as market uncertainty still dominates investor confidence. Trumps reciprocal tariffs were paused but the China - USA trade war still continues with no end in sight. We also saw an active bond market this week as yields skyrocketed.

MARKETS and EARNINGS GUIDANCE

• Although inflation data came in better than expected, many economists say that it is too early to tell the effects of the tariffs. However, some companies have already lowered guidance expectations in anticipation for higher prices and reduced spending.

  
  

  -Financials earnings are this week and should provide the market with what we hope to be more clarity on the market. We should get insight on lending and capital expenditures of financials and whether they topped estimates or not. We will also be watching for companies to address tariffs and whether they adjust guidance for future quarters.

  5-Day Change

S&P 500 --> +5.70% Russell --> +1.82%

Dow Jones Industrial --> +4.95% VIX --> -17.10%

Nasdaq --> +7.29%

Upcoming Earnings

Monday:

Goldman Sachs, M&T Bank, HP Inc.

Tuesday:

J&J, Airbus, Moody's, Citigroup, U.S Bancorp, BAC

Wednesday:

Travellers, Citizens, Abbott Labs

Thursday:

Charles Schwab, American Express, KeyCorp, Truist, UNH, State Street

Friday:

No noteworthy earnings.

BOND MARKET MADNESS

-Bond yields rose a concerning amount this week as the 10-year treasury jumped from 4.01% to 4.58% within a few days while the 30-year yield increased 54 basis points. This comes after investors fear increased inflation as the tariffs prepare to hit domestic business. People are also selling off bonds because of decreased confidence in US markets. The yields cooled off once Trump announced his 90 days pause in reciprocal tariffs.

USA-CHINA TRADE WAR

-The USA-China trade war is at its highest level since its start in 2018 as Trump raised the overall tariff rate from 125% to 145%. China has since raised their tariff rate for US imports to 125%. In good news for China, Trump announced that he is exempting computers, smartphones, and semiconductors from reciprocal tariffs, meaning they still face a 20 percent baseline tariff. However, Commerce Secretary, Howard Lutnick said "not permanent".

-Supply chain issues continue to arise as China looks to reroute a lot of its exports to other countries until tensions between the two countries are settled.

Biggest Winners and Losers (By Sean Ammirati)

Newmont Corporation (NEM)

 Shares jumped 8.3% this week, significantly outpacing the S&P

 500.

 Driven by a surge in safe haven demand as U.S.–China tariff tensions escalated, pushing

spot gold to hit record highs above $3,200/oz

 UBS upgraded NEM to Buy, which raised its price target to $60, highlighting its strong

leverage of the bullish gold environment and expected $3.2 billion in share buybacks by

mid 2025.

Barrick Gold Corporation (ABX)

 U.S listed shares rose 6.2%

 Benefited from the same gold price rally, with investors flocking to precious metal miners

amid heightened trade war volatility.

 Four different analysts bumped up what they expect Barrick will earn per share next

year—from $1.52 to $1.59.

 Zack Momentum Score is now at grade A

 Last quarter, Barrick out preformed analysts' predictions by 12%

BIGGEST LOSER

Restoration Hardware (RH)

 Shares fell 38.46% this week

 U.S. added extra taxes on imports from Vietnam, Taiwan, and China. Since RH buys

over 70% of its furniture from these places adding another 30% to their Cost of goods.

 They do have an inventory cushion of 200-300 million of furniture. This will last them

about three months.

 RH’s earnings report was approximately 17.7% below analysts’ predictions