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As we now enter week 2 (or 3?) of the escalation of regular harmless tariff shenanigans into full blown trade war shenanigans it’s time to see where the US is positioned on the world stage (spoiler: badly)
So much so that this satire from 2014 becomes more and more relevant every day.
Source: Reddit
But before we get there, two stocks we’re close to that have some news.
We recorded an interview with the Chairman of Wellnex Life, George Tambassis and MD Zack Bozinovski to update investors on what’s been and what’s to come. Follow the link to find out more. More updates to come from this company that we have worked so well with.
There is also promising news from one of my own personal favourites, Impact Minerals, currently closing the shortfall after receiving 70% subscription to the retail rights issue.
Great to see companies progressing as planned. The shortfall is for sophisticated investors only, so if you want to know more, please send me a note.
Markets
Now to markets, and we can see the US S&P 500 last week on the left and our ASX 200 index on the right. The word “erratic” springs readily to mind. Trump going from “it’s on” to “it’s off” to “it’s off for everyone except China” to “it’s off for everyone except China and also for Apple it’s off” to “I didn’t actually say that about Apple, it’s back on for them”
Source: TradingView
The flashbacks I’m getting from managing a global portfolio during Trump 1.0 are why I’m now in the space of helping investors into lower risk, defensive portfolios, and also why I’m taking more time to focus on my mental health.
Of note is the joke that the US is taking itself back to being a manufacturing economy and we’ve all seen the jokes the Chinese are sending over various social media of stereotypical Americans working in sweatshops.
Video: Americans are working in front of sewing machines (Source: TikTok)
When the reality is actually fairly true. America wants to return to a manufacturing economy, they just don’t want to return to a manufacturing economy.
Observe..
Source: Financial Times
Outlooks are so unstable that the US consumer is fresh outta confidence. Also, while US company reporting is coming in strong, outlooks are being removed from earnings reports.
Source: Financial Times
Markets, and people hate uncertainty. Stay invested, but just don’t go in with both feet. And note that when the whole thing is dealt away or rescinded, the market snapback will be eye watering. We saw a ~10% up day last week on the 90-day pause news and that’s just a taste. Buy on massive off days with high volatility.
Idea of the week:
Rare Earths.
This from the NYT
Source: The New York Times
Of all the back-and-forth in the trade war, things like this won’t get rolled back easily. I feel there’s an ongoing issue in the rare earth space. I went to the brains trust for ideas of things that should move and Brazilian Rare Earths (BRE.ASX) was one of the picks. A little homework and it looks like a nice little trade here.
Grades are good, processing should be cheap, and cash should be in the bank. Buy on a breakout above these very easy-to-see lines.
Source: TradingView
Extra:
China is also exposing how much people are getting ripped off by luxury brands. 99% made in China, packaged in France and so it can get a “made in France” tag on it.
https://x.com/thecreativexx/status/1911497461388186058
hilarious.
All the best,
James
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