Another 24 hours filled with tariff drama—this time hitting traditional markets harder than Bitcoin. Further levies have been imposed on China, and Powell has responded.

Previously, the US had slapped a staggering 145% tariff on select Chinese imports—already an aggressive move. But China was ready to retaliate, and did just that. Now, in response to China's countermeasures, the White House has escalated tariffs to as high as 245%, citing China's "retaliatory actions." Despite the pressure, China is holding firm, reiterating its willingness to "fight until the end."

This escalation has shaken key US tech names. Apple and Nvidia, which had both staged promising rallies after weekend tariff exemptions, have been hit hard. Apple has relinquished all its gains, and Nvidia has dropped nearly 10% over the past few days.

Meanwhile, gold continues its meteoric rise, trading at $3,354—a clear sign of a risk-off environment. With gold setting new all-time highs every other day and now up 12% in just eight days, this kind of surge is rare and speaks volumes about investor sentiment.

Jerome Powell took to the stage in Chicago today, and all ears were on him. Trump has been vocal in demanding rate cuts, yet Powell remains unmoved. Today, he doubled down—stating clearly that the Fed won’t intervene to support equity markets unless there’s a major systemic issue.

He also acknowledged the long-term impact of tariffs, especially on the auto sector, warning that car supply chains could face disruption for years. Despite the uncertainty, Powell remains confident in the US economy, citing a strong job market and ongoing resilience.

With the next interest rate decision due in May, markets had previously priced in a potential cut. But sentiment has shifted. There's now an 86.4% probability of no rate cut in May, pushing expectations to June for the first 25bps cut.

On crypto, Powell struck a surprisingly constructive tone. He noted that digital assets are becoming more mainstream and said a legal framework for stablecoins “makes sense.” He also indicated that banking regulations around crypto may loosen, a potentially bullish signal for the sector.

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Copyright © 2024 Stormrake Pty Ltd, All rights reserved

No Advice Warning 

 

Disclaimer 

All statements made in this newsletter are made in good faith and we believe they are accurate and reliable. Stormrake does not give any warranty as to the accuracy, reliability or completeness of information that is contained here, except insofar as any liability under statute cannot be excluded. Stormrake, its directors, employees and their representatives do not accept any liability for any error or omission in this newsletter or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided in this newsletter is owned by Stormrake. You may not alter or modify this information in any way, including the removal of this copyright notice.

Copyright © 2024 Stormrake Pty Ltd, All rights reserved