Thoughtful Money Interview: Rosenberg Warns of US Recession and Investment Strategies

David Rosenberg: Will Tariff Trauma Trigger A Recession? (YouTube link)

Below is a summary of David Rosenberg's interview on Thoughtful Money in the video above.

Economic Outlook and Recession Risk:

• Economist David Rosenberg predicts a potential economic recession, which he believes was delayed from 2022-2023, driven by uncertainties from President Trump's trade and tariff policies. He argues that financial markets are only 25% priced for a recession, indicating significant downside risk.
• The heightened uncertainty, particularly from erratic tariff announcements and reversals, is causing businesses to freeze capital expenditures (capex) and households to increase precautionary savings, reducing discretionary spending. This could shave 1-2% off GDP growth, leading to economic stagnation or a mild recession.

Trump’s Economic Policies and Tariffs:

• Rosenberg expresses disappointment with Trump’s economic strategy, which prioritizes tariffs over pro-growth policies like deregulation or tax extensions. Unlike Trump’s first term, where tariffs were targeted and implemented later, the current broad-based tariff approach (e.g., 10-50% reciprocal tariffs announced on April 2, 2025) is causing chaos and uncertainty.
• The administration’s reliance on executive orders and a 1962 trade law loophole for national security adds to policy unpredictability. Rosenberg highlights the April 2 announcement as a turning point, signaling a potential shift away from the U.S. dollar’s reserve currency status, which could lead to long-term financial instability.
• The U.S.-China trade war is escalating, with Rosenberg doubting either side will back down soon. China’s long-term perspective and capacity to endure economic pain contrast with America’s lower tolerance, complicating resolution prospects.

Canadian Election Context:

• The interview touches on Canada’s election (April 29, 2025), where Mark Carney’s Liberal Party is expected to win a majority, partly due to strategic voting by NDP supporters to counter Trump’s trade threats. Rosenberg notes Trump’s influence on the election, with his “51st state” comments and trade tensions shifting voter sentiment toward Carney, seen as a strong globalist negotiator.

Investment and Risk Management Advice:

• Rosenberg emphasizes liquidity as the key strategy in this high-uncertainty environment. Investors and businesses should stay defensive, holding cash to capitalize on opportunities when assets transfer from “weak hands to strong hands” during a potential recession.
• Investment recommendations:
• Cash: High-yield cash for safety.
• Bonds: 5-10 year Treasuries for positive returns in a recession.
• Aerospace/Defense ETFs: Due to rising global military spending.
• Canadian Pipelines/Utilities: For dividend yield and growth amid a weak Canadian dollar.
• Japanese Yen: Undervalued with 10-20% upside potential as the BOJ raises rates.
• Gold and Silver: Gold could reach $6,000/oz in 3-5 years; gold and silver mining stocks offer significant upside.
• Rosenberg advises de-risking portfolios within one’s risk tolerance, as markets are not fully pricing in recession risks.

Key Takeaways:

• The economy faces a corrosive period of uncertainty due to inconsistent trade policies, potentially leading to a recession by late 2025 or 2026.
• Trump’s tariff focus risks political capital, complicating fiscal policy (e.g., extending 2017 tax cuts), which could introduce further uncertainty.
• Investors should prioritize liquidity and defensive assets, preparing for prolonged volatility and a possible economic downturn.

Follow-Up Resources:

• Rosenberg Research: Free trial at rosenbergresearch.com or email drosenberg@rosenbergresearch.com.
• X handle:
• @EconGuyRosie.
• Thoughtful Money recommends consulting financial advisors for personalized guidance (form at thoughtfulmoney.com).

This summary captures the core insights from Rosenberg’s discussion, focusing on economic risks, policy critiques, and actionable investment strategies.

Beige Book Warning: Layoffs Emerging as US Economy Loses Momentum

The Fed Quietly Admits Mass Layoffs Have Begun, And The Economy Is Falling Apart (YouTube link)

Jeffrey P. Snider, host of the Eurodollar University channel, pointed out in the video above that recent data and reports from the Federal Reserve indicate a sharp economic slowdown in the U.S., with signs pointing to a potential recession.

The April 2025 Beige Book paints a picture of an economy stuck in neutral, with growing risks of a downturn. Stagnant activity, emerging layoff concerns, and pervasive uncertainty over trade policy dominate the narrative, while inflation takes a backseat. The labor market’s fragility and sharp declines in manufacturing and services activity suggest the economy is at a critical juncture, potentially transitioning toward recessionary conditions. Policymakers may need to shift focus from inflation to supporting growth, as the data signals significant challenges ahead. 

Key points include:

• Layoffs Emerging: The Fed's Beige Book notes "scattered reports" of layoffs, a deterioration from January when layoffs were "rare," particularly in consumer-facing and government-funded sectors.
• Economic Indicators Collapsing: Manufacturing and services PMIs across regions (e.g., Dallas Fed’s Texas Manufacturing Outlook at -35.8, Philadelphia PMI at -26.4) have crashed to levels not seen since 2020, reflecting a significant loss of momentum.
• Labor Market Weakness: The labor market is teetering on the edge, as shown by the Beveridge Curve, where declining job openings risk transitioning to rising unemployment and layoffs. Consumer confidence is also dropping, signaling labor market concerns.
• Inflation Less Prominent: Despite Fed rhetoric, inflation mentions in the Beige Book dropped to 8 in April 2025 from 14 in April 2024, suggesting businesses are more worried about economic downturns than price pressures.
• Fed Response: Some Fed officials are discussing rate cuts to support the economy, acknowledging the sharp loss of momentum.

The combination of plunging PMIs, rising layoff reports, and weakening labor market indicators suggests the economy may be entering a recession, with global parallels in places like South Korea.

References

1. Fed Beige Book April 2025
2. Texas Manufacturing Outlook Survey

VanEck Merk Gold ETF (OUNZ): Physical Redemption Explained

VanEck Merk Gold ETF (OUNZ) offers investors a way to track gold prices while holding physical gold, such as London Good Delivery bars. Unique for enabling share redemption for physical gold (bars or coins) starting at one ounce, its simple delivery process involves a delivery application, fees, and broker instructions. Shipping is insured, with choices like 1-ounce coins or 10-ounce bars, and a website calculator aids planning. With an expense ratio of 0.25% and around $1 billion in assets under management, OUNZ is lauded for its flexibility, affordability, and investor-friendly redemption.

Key Points

• Physical Gold Backing: OUNZ is structured to hold physical gold in allocated London Good Delivery bars, aiming to track the spot price of gold.
• Physical Delivery Option: The key differentiator of OUNZ is its provision for investors to redeem shares for physical gold.
• Minimum Redemption Quantity: A minimum redemption of one ounce is a significant advantage and aligns with information often cited about OUNZ. Many other ETFs with a physical delivery option have much higher minimums.
• Delivery Process: The described process of submitting an application, paying fees, and coordinating with a broker is typical for physical redemptions of ETF shares. The mention of insured shipping and options for coins or bars also aligns with common practices.
• Non-Taxable Event (for US Investors): In the United States, taking physical delivery of the underlying asset of an ETF (like gold) is generally not considered a taxable event, as it's viewed as receiving your pro-rata share of what the ETF already holds.
• Expense Ratio: An expense ratio of 0.25% is competitive within the gold ETF landscape.
• Assets Under Management (AUM): An AUM of approximately $1 billion is a reasonable figure for a well-established gold ETF like OUNZ.
• Notable Features: The description accurately highlights OUNZ's flexibility, competitive fees, and investor-friendly delivery process as key reasons for its popularity among those wanting physical gold exposure.

Delivery Details

The VanEck Merk Gold ETF allows investors to redeem shares for physical gold, distinguishing it from other gold ETFs.

• While there's no delivery fee for the lower 48 states, investors must pay a Processing Fee, which includes an Exchange Fee but excludes delivery costs.

 Redemption starts at one ounce, with options for gold coins (e.g., American Gold Eagles), smaller bars (e.g., 1- or 10-ounce), or London Good Delivery bars (~400 ounces). 

The process avoids taxable events 

• Taking delivery of gold is not a taxable event as investors merely take possession of what they already own: the gold  (VanEck FAQ; IRS guidelines on in-kind redemptions). 

and involves a delivery application, processing fees, and insured shipping. Smaller shipments use conventional carriers, while larger or international deliveries may require armored services. Gold is stored in JPMorgan Chase's London vault. For details, consult VanEck’s website or prospectus.

Conclusion

To ensure complete accuracy and the most up-to-date information, it's always recommended to:

• Consult the official VanEck Merk Gold ETF prospectus and website. This will provide the most current details on the redemption process, fees, minimums, and any recent changes.
• Verify the tax implications with a qualified financial advisor as tax laws can be complex and vary based on individual circumstances and jurisdiction.
• Check recent market data for the current AUM as this figure can fluctuate.

Trump's Trade Strategy: Balancing Global Dynamics and Containing China

Can China Defeat America In The Trade War? | Brent Johnson (YouTube link)

In the podcast hosted by Adam Taggart on Thoughtful Money, Brent Johnson, CEO of Santiago Capital and creator of the "Dollar Milkshake Theory," discusses President Trump's aggressive trade policies in his second term, their implications for global trade, and whether they risk pushing the world toward China, potentially weakening America's global position. The conversation delves into the strategic intent behind Trump's tariffs, the geopolitical and economic context, and the relative strengths and challenges of the U.S. and China.

Key Points:

• Trump's Trade Strategy as a Power Move:
• Johnson argues that Trump's tariffs and trade policies are not chaotic or poorly thought out but a deliberate, aggressive strategy to reassert U.S. economic dominance. He describes it as "realpolitik backed by financial warfare," leveraging access to the U.S. consumer market—the largest and wealthiest in the world—as a pressure point.
• The strategy aims to renegotiate global trade terms, prioritizing U.S. interests, particularly to counter China's growing influence. Tariffs are tools to force compliance from trading partners, with the U.S. betting on its unmatched market power.
• Johnson likens Trump's approach to calling a poker game, demanding other nations align with U.S. interests or risk losing market access. This has caused volatility but is seen as a calculated move to accelerate negotiations and isolate China.
• Geopolitical Goals: Containing China:
• A primary objective is to "ring-fence" China, preventing it from surpassing the U.S. as the global superpower. Johnson notes that discussions about trade with Mexico, Canada, or Europe often implicitly target China's influence.
• Trump avoids directly vilifying China, instead blaming past U.S. leadership for allowing China to gain advantages. This framing helps maintain diplomatic flexibility while rallying domestic support for his policies.
• Johnson believes Trump wants to contain China without triggering its collapse, as a global economic crisis would harm U.S. interests. The goal is a controlled rebalancing of trade and power dynamics.
• Will China "Drink America's Milkshake"?:
• Critics argue that Trump's hardball tactics alienate allies, driving them toward China and accelerating U.S. decline. Johnson disagrees, asserting that the U.S. retains significant advantages despite its issues (e.g., debt, political polarization).
• China's challenges—balance sheet recession, real estate crisis, shrinking population, and high debt levels—limit its ability to supplant the U.S. Johnson argues that China's economy is more leveraged than the U.S., and its currency (yuan) lacks global demand compared to the dollar.
• Other regions (Europe, South America) face similar or worse problems, reducing the likelihood of a cohesive anti-U.S. alliance forming around China. Johnson predicts that, when forced to choose, most nations will align with the U.S. due to its market and strategic advantages.
• U.S. Comparative Advantages:
• Despite its debt and internal issues, the U.S. has natural resources, a robust consumer market, military power, and institutional stability that competitors lack. Johnson emphasizes that global mistakes mirror U.S. ones, so no rival starts from a position of strength.
• If forced into self-sufficiency, the U.S. could meet its needs better than most nations, reinforcing its resilience in a fragmented global economy.
• Economic and Market Outlook:
• Dollar: The dollar has weakened recently (down 5% in two weeks), but Johnson sees this as a temporary repatriation of capital to local economies during uncertainty, similar to 2008 and 2020. He expects a dollar rebound if global markets worsen, as the world still needs dollars for trade and debt servicing.
• Gold: Gold has surged due to fears of a sovereign debt crisis but may have hit a "blowoff top." Johnson advises holding gold as a strategic asset but suggests hedging gains, anticipating a pullback in the next few months.
• Markets: Johnson predicts continued volatility through 2025, akin to 2022, with potential market declines and intermittent rallies. He expects a possible bottom in Q3/Q4 2025, with 2026-2027 potentially stronger, mirroring post-2022 recovery.
• Investment Strategy: Johnson’s fund has hedged equities, maintained gold allocations, and focused on short-term fixed income (T-bills). He’s cautiously adding to equities on dips but expects further downside, advising investors to stay flexible and avoid dogmatic positions.
• Long-Term Implications:
• Johnson sees global trade shifting toward regional blocs (e.g., U.S.-led Western Hemisphere, China-led Asia), with reduced globalization. The U.S. may adopt a modern Monroe Doctrine, focusing on its hemisphere for trade and security.
• The transition will be volatile, with economic pain (possible recession) but potential benefits like increased U.S. manufacturing and job growth. Success will be measured by Main Street gains (jobs, wages) and geopolitical containment of China, not just stock market highs.
• Drawing historical parallels (e.g., Nixon’s 1971 gold window closure, Rome’s decline), Johnson argues that empires decline slowly, and the U.S. is far from collapse. He expects a decade-long struggle with ups and downs, not a quick resolution.
• China’s Post-Settlement Role:
• If Trump succeeds, China will remain a major trading partner but within a more regionalized framework, likely leading its own economic bloc. Trade will continue but under terms more favorable to the U.S., with China’s global ambitions curtailed.
• Advice for Investors:
• Keep an open mind, avoid ideological biases, and focus on likely outcomes rather than desired ones. Capital flows drive markets, so consider where global money is likely to go (still heavily U.S.-centric).
• Political and geopolitical risks are rising, and mercantilism may restrict capital mobility. Investors must adapt to a world where national priorities override pure economics.

Conclusion:

Johnson views Trump’s trade policies as a bold, intentional strategy to reassert U.S. power and contain China, not a reckless gamble. While causing short-term volatility, the U.S.’s economic and strategic advantages make it unlikely that China will overtake it soon. Investors should brace for a turbulent 2025, maintain flexibility, and recognize that global economic shifts are part of a long-term reordering, not an imminent U.S. collapse.

Tom Lee's Latest Insights: Fundstrat's Take on the Current Market (04/24/2025)

Tom Lee’s 3 Signals Confirm High Probability “Bottom Is In” & the Stocks Set to Lead  (YouTube link)

Tom Lee, CIO of Fundstrat Capital and portfolio manager of the US Large Cap Granny Shots ETF, provided a market update on 04/24/2025. 

Key points:

• Granny Shots ETF Performance (as of April 17th):
• Price: $17.46, NAV: $17.47, Total Assets: $826M.
• Weekly decline: -1.13%, outperforming S&P 500’s -1.49% by 36 basis points.
• Macro Environment:
• Markets turbulent since April 2nd ("Tariff Liberation Day"), causing uncertainty, worse than COVID-era volatility.
• Despite macro concerns (e.g., economic Armageddon fears, end of American exceptionalism, gold up 26%), Lee remains cautiously optimistic.
• Economy not unraveling; dry powder exists for a V-shaped stock rally, with potential new trade deals.
• Market Bottom Signals:
• Zweig Breadth Thrust (April 24th): Bullish reversal signal, historically leading to gains 1, 6, and 12 months later.
• High Yield Spreads Recovery (April 23rd): Spreads narrowed from 530 to 409 basis points, reducing recession risk.
• Two 90% Advancing Days (April 22nd): Strong market breadth, a bullish signal.
• VIX Drop: Closed below 31 after spiking above 50, marking an internal low.
• S&P 500 close to 50% recovery from its April 7th low (needs 5491, closed at 5485).
• Equity Market Outlook:
• Bullish signals outweigh macro fears; stocks likely in a bull market.
• Risks include tariff wars, global recession, deleveraging, or inflation spikes, but stocks appear "washed out."
• Positive developments: Tesla rose post-earnings, Bitcoin rebounding, Micro Strategy holding above lows.
• Granny Shots ETF Details:
• Top Performers: Netflix, Palantir, Micro Strategy, Abbott Labs, Costco.
• Bottom Performers: Microsoft, AMD, Amazon, Meta, Nvidia.
• Top Themes: Cybersecurity (led by Palantir), style tilt (quarterly adjusted), easing financial conditions.
• Granny Shots Strategy: Focuses on long-term themes (e.g., millennials, automation, cybersecurity) and stocks appearing in multiple themes (e.g., Google, Meta, Palantir, Nvidia). Named after Rick Barry’s underhanded free-throw style, emphasizing unconventional, high-success strategies.

Lee concludes that recent developments suggest a positive resolution for stocks, with the ETF well-positioned despite market volatility.

Felder's Bearish Warning: Stocks, Bonds, and the Dollar Under Pressure

Jesse Felder: Stocks, Bonds & the U.S. Dollar Are All Breaking (YouTube link)

In the video above, Jesse Felder, a financial analyst, conveys a bearish perspective on various asset classes—stocks, bonds, and the U.S. dollar—highlighting concerns about valuations, economic conditions, and policy changes.

Here’s a concise breakdown of the key points:

• S&P 500 (Stocks):
• Felder is bearish, recommending selling due to high valuations (trading at ~20x forward earnings vs. a historical average of 15x trailing earnings).
• Forward earnings estimates are too optimistic and likely to decline, especially if a recession is underway or imminent.
• Insider selling and excessive retail investor optimism (record flows into leveraged ETFs) signal a potential market top.
• Historical comparisons to the early 2000s tech bubble suggest a possible 50% decline, with the S&P potentially dropping to 4,000 or even 3,000.
• Recent profit warnings from companies like Walmart, DR Horton, and LVMH indicate weakening economic demand.
• Bond Market:
• Felder is negative on bonds, predicting the 10-year Treasury yield could rise to 5–5.5% due to a supply-demand mismatch in Treasuries and persistent inflation.
• A regime change from decades of falling rates to rising inflation and interest rates is underway.
• A potential "bond vigilante" revolt could occur if fiscal deficits worsen or the Fed monetizes debt, especially under political pressure to weaken Fed independence.
• Unlike past cycles, investors like Warren Buffett are avoiding long-term bonds, favoring short-term Treasury bills.
• U.S. Dollar:
• Felder believes the dollar has entered a bear market, potentially lasting years, driven by Trump administration policies favoring a weaker dollar to boost U.S. competitiveness.
• A declining dollar favors real assets (e.g., commodities) over financial assets, similar to the 2002–2011 dollar bear market.
• Current DXY weakness (down 8% in 2025) supports this view.
• Investment Recommendations:
• Real Assets: Felder favors commodities, particularly energy stocks and oil, which he sees as undervalued relative to gold. Energy is the cheapest equity sector with strong insider buying (e.g., Occidental Petroleum, Comstock Resources).
• Oil: Priced for a recession at ~$60/barrel, but likely to rise sharply with fiscal/monetary stimulus and supply constraints (e.g., U.S. shale depletion, global demand from China/India).
• Gold: Bullish long-term (potential to reach $5,000–$10,000/oz), but overvalued short-term at ~$3,300–$3,400 due to recent ETF inflows and high sentiment.
• Investors should focus on protecting wealth rather than chasing returns in this high-risk environment.
• Economic Outlook:
• A recession may already be underway, triggered by a "tariff shock" causing corporate caution (e.g., Amazon and Microsoft halting data center capex).
• Inflation remains a concern (median CPI at 3.5%, above Fed’s 2% target), and tariffs could exacerbate it, creating a stagflationary environment.
• The Fed faces a dilemma: cutting rates risks fueling inflation, while holding firm could deepen a recession. Felder criticizes the Fed’s past dovishness.
• Political pressure on Fed Chair Jay Powell (term ends May 2026) could lead to his replacement, potentially triggering yield curve control or debt monetization, risking a bond market crisis.
• Societal and Market Risks:
• Excessive leverage in ETFs and zero-day options could amplify a market decline, unlike past bear markets.
• Wealth inequality and speculative behavior (e.g., sports betting, meme stocks, NFTs) could fuel political backlash and societal restructuring if markets crash.
• Jonathan’s Commentary:
• Agrees with Felder’s cautious stance on the S&P, citing high valuations, declining earnings, and reduced AI-related capex. Sees a potential drop below 4,800 to 4,000.
• Shares caution on bonds due to debt levels, dollar concerns, and Fed policy constraints.
• Bullish on gold long-term but advises caution after its 25–30% run in 2025. Maintains a ~28% cash position to capitalize on volatility while avoiding duration risk in bonds.
• Slightly less optimistic on oil than Felder, citing potential economic weakness and Trump’s “drill, baby, drill” policy, but acknowledges opportunities in high free cash flow oil companies.
• Key Takeaway:
• Felder warns of a challenging financial environment with overvalued stocks, rising bond yields, a weakening dollar, and recession risks. He advocates for real assets like energy and gold to protect wealth, while cautioning against chasing overbought assets. The discussion highlights systemic risks from leverage, inflation, and policy uncertainty, urging investors to prioritize capital preservation.

Navigating the Bear Market: Technical Insights and Safe Havens with Katie Stockton

Katie Stockton Breaks Down the Bear Cycle: Technical Analysis You Need Now (YouTube link)

The podcast episode of Market Maverick features host Toby and guest Katie Stockton, a technical analyst, discussing the chaotic stock market environment following a significant volatility spike and a 6-7% single-day market move. 

Key points include:

• Market Volatility and Short-Term Lows: The recent market surge, driven by short covering, indicates a short-term capitulative low but not a cycle bottom. Historical data suggests such moves often lead to bearish outcomes over six months, with a 67% chance of retracing gains.
• Market Internals: Katie uses aggregated market internal measures (sentiment, breadth, leadership) to assess market health. Extreme readings in some indicators (e.g., new highs vs. lows) suggest a washout, but others, like stocks above their 200-day moving averages, indicate potential for further declines.
• Bearish Cycle Indicators: Monthly charts show bearish signals, including MACD downturns and breaks below the Ichimoku cloud, suggesting a cyclical bear market that began around February 2025. Bear cycles typically last less than a year.
• Safe Havens: Positive momentum is scarce, but precious metals (gold, silver) remain strong. Short-term treasuries (e.g., SPTS ETF, yielding ~4-4.2%) and, to a lesser extent, long-term treasuries offer safety. Agricultural commodities and select international markets (e.g., China, Mexico) show potential but require cautious entry points.
• Sector Opportunities: Enterprise software (e.g., CrowdStrike) and European defense stocks show relative strength, though not immune to broader market pressures. China ETFs (e.g., FXI) have long-term potential but are currently in a corrective phase.
• Algorithmic Trading Impact: The market’s melt-up was heavily algorithmic, exacerbating moves. This, combined with new products like one-day options, amplifies volatility, making technical indicators crucial for filtering noise.
• Gold and Miners: Gold remains a strong performer, with miners (e.g., GDXU) finally gaining traction but still lagging. A potential short-term pullback in gold and miners may align with a US dollar rebound.
• Risk Management: Katie advocates for higher cash balances, selective equity exposure, and systematic strategies to navigate volatility. Toby emphasizes locking in profits from massive gains (e.g., Nvidia) to protect wealth.

The discussion underscores a cautious, data-driven approach to navigating a bearish market cycle, with a focus on technical indicators, precious metals, treasuries, and selective international opportunities.

Felix Zulauf’s 2025 Market Outlook: Navigating Volatility for a 2026-2027 Bull Run

Felix Zulauf: Build Dry Powder Until Fall & Then Get Long For A 2-Year Rally In Stocks (YouTube link)

Felix Zulauf, a prescient market forecaster, shared his outlook on the current market environment, emphasizing a transitional 2025 with opportunities for investors who stay disciplined. Here are the key points:

• Market Bottoming and Strategy:
• Recent market corrections (S&P to 4835, NASDAQ slightly below 17,000) align with Zulauf’s earlier predictions of a 15-20% drop in 2025.
• He views this as "classic bottoming action," driven by fear and panic. Investors should avoid selling during sharp declines and instead "keep powder dry" to buy during selloffs.
• Zulauf advises doing the opposite of emotional impulses: buy when markets look weak and avoid chasing bounces.
• 2025 Outlook:
• 2025 is a transitional year with volatility and potential retests of lows (possibly S&P 4500) by May or fall.
• A global recession is likely (>50% chance) in the second half of 2025, which could lead to another market dip.
• By fall 2025, investors should be fully invested for a potential rally into 2026-2027, targeting S&P 7500.
• Global Economic Shifts:
• Ongoing geopolitical and economic rearrangements (trade, capital flows) are creating a "roller coaster" environment.
• U.S. trade deficits, driven by overconsumption and underproduction, are unsustainable. Trump’s tariffs aim to address this but have caused global mistrust and disrupted trade confidence.
• Capital repatriation is weakening the U.S. dollar, with a multi-year decline expected (possibly to 97-98 short-term).
• Investment Recommendations:
• Equities: Favor non-U.S. markets (Europe, Asia, including China) over U.S. due to overvaluation and the end of U.S. exceptionalism. Focus on industrial companies with strong U.S. market positions and avoid low-tax platform companies (e.g., Apple).
• Bonds: Bearish long-term due to inflationary pressures. Treasury yields may dip to ~3.5% in a recession but won’t fall significantly. Expect 10-year yields to break 5% by 2026-2027.
• Commodities: Bullish on oil (target $150-200 by 2027) and gold (near-term peak at $3300-3400, then correction to ~$2600 before resuming uptrend). Gold’s rise is driven by geopolitical shifts, not just inflation.
• Cash: Hold cash to deploy opportunistically during selloffs.
• Key Risks and Opportunities:
• A recession could delay the rally, but central planners (e.g., fiscal stimulus in the U.S., Europe, and China) are already stepping in to support economies.  
• Extreme pessimism (e.g., Bank of America’s bearish fund manager survey) signals a medium-term bottom, offering buying opportunities.
• The U.S. dollar’s role as a reserve currency is weakening, impacting capital flows and supporting gold.
• Actionable Advice:
• Be opportunistic on dips between now and fall 2025. By fall, especially if S&P nears 4500, deploy capital into favored stocks/sectors.
• Focus on themes (e.g., industrial, international markets) rather than individual stock picking unless supported by deep research.
• Stay disciplined, avoid panic, and prepare for a rewarding 2026-2027 bull market.

Zulauf’s core message: 2025’s volatility is a setup for a strong rally in 2026-2027. Investors should stay calm, buy strategically during selloffs, and position for long-term gains in equities (especially non-U.S.), gold, and oil.

Navigating the Unknown: Gundlach & DiMartino Booth's Investment Playbook

Jeffrey Gundlach and Danielle DiMartino Booth on Investing in Uncertain Times (YouTube link)

In the video above, Jeffrey Gundlach and Danielle DiMartino Booth discuss the market's reaction after "Liberation Day." Their analysis focuses on economic indicators, market dynamics, and policy impacts, particularly tariffs.

Here's a concise summary of the key points:

1. Market Sentiment and Economic Outlook:
• The market's "bloodless verdict" post-Liberation Day signals expectations of lower earnings, reduced growth, and higher inflation. This trend has been building, as evidenced by the Federal Reserve's prior adjustments to lower GDP forecasts and higher inflation expectations.
• Risk asset valuations resemble those of 2021, preceding the 2022 bear market, with sentiment akin to the 1999 dot-com bubble, now driven by AI hype instead of dot-com fervor. The market's perceived invincibility has begun to crack.
2. Credit Spreads and Market Stress:
• Credit spreads, particularly for high-yield bonds, have been widening gradually, moving from 3 to 30 basis points and potentially much higher, indicating growing market stress. This mirrors historical patterns where spreads widen slowly then surge, signaling deeper issues.
• Leverage in markets, including levered ETFs and loans to non-depository institutions, amplifies risks. Banks financing these instruments face significant exposure, as seen in sharp declines in bank stocks (e.g., JPMorgan down 7%, Citigroup down 9%).
3. Tariffs and Global Trade:
• Tariffs, initially underestimated at 10%, are now seen as potentially reaching 24-27%, exceeding historical benchmarks like the 1930 Smoot-Hawley tariffs. This has led to market volatility, with retaliation expected from countries like Canada and France.
• The tariffs target Asia more than anticipated, disrupting supply chains (e.g., from China to Vietnam). This could reduce foreign investment in the US, which has driven its economic outperformance, potentially dropping from $28 trillion to $15 trillion.
4. Market Structure and Concentration:
• Narrow market gains, driven by a few stocks (e.g., the "Magnificent 7"), have created risks for market-cap-weighted indices like the S&P 500. This concentration resembles 1999, setting the stage for significant corrections when momentum shifts.
• Illiquidity in private credit and high-yield markets poses risks, with examples like Zip Car Wash’s bankruptcy highlighting valuation discrepancies (e.g., marked at 95 cents to single digits).
5. Fiscal and Monetary Policy:
• The US budget deficit, now higher than during peak stimulus years, and rising interest expenses (nearing $2 trillion) exacerbate economic challenges. Proposed tariff revenues aim to address trade deficits but risk global trade disruptions.
• The Federal Reserve may face pressure for rate cuts (e.g., 50 basis points in May) as unemployment rises and economic indicators weaken, potentially skipping from 4.1% to 4.4% or higher.
6. Investment Strategy and Opportunities:
• Experts recommend reducing leverage, minimizing exposure to low-rated credit (e.g., triple-C bonds), and increasing treasury durations. Securitized assets and non-US stocks (e.g., European equities) are seen as potential opportunities due to relative undervaluation.
• In distress scenarios, selective investments in resilient brands (e.g., Nike, Target) or "widow stocks" with stable dividends could offer value.
7. Historical Context and Emotional Memory:
• The speakers draw on past crises (e.g., 2008 credit crisis, 1994 bond market) to highlight patterns of overvaluation and sudden collapses. Emotional memory informs their caution, recalling instances where bonds deemed "cheap" (e.g., at 93 cents) fell further (to yields of 24-40%).
8. Geopolitical and Structural Shifts:
• The discussion frames US-China relations as a "cold war" with economic warfare elements, citing China’s strategic moves (e.g., DeepSeek AI release). This complicates global trade dynamics.
• Market structure issues, including over-reliance on levered ETFs and passive investing, amplify volatility when sentiment shifts, as seen in recent bank stock declines and ETF-related stresses.

Overall Message

The market’s reaction reflects deeper, pre-existing vulnerabilities—overvaluation, leverage, and narrow leadership—exacerbated by unexpected tariff hikes and global retaliation. The speakers see this as the start of a prolonged correction, driven by fiscal deficits, rising interest costs, and trade disruptions. They advocate for cautious strategies, focusing on liquidity, selective credit, and non-US assets, while warning of further economic pain if structural issues (e.g., deficits, leverage) aren’t addressed.

The End of "Buy the Dip": Felder's Bear Market Warning

The End of "Buy the Dip"? With Jesse Felder (YouTube link)

The discussion between Maggie Lake and Jesse Felder, founder of the Felder Report, aired on April 15, 2025, explores why the “buy the dip” strategy is failing and signals a bear market. 

Key points:

• “Buy the Dip” Dead: Felder cites a Wall Street Journal stat showing 2025 as the worst year for “buy the dip” in a century, with last week’s strong rally resembling bear market bounces, not reversals.
• Bear Market Signals: Massive insider selling in 2024 (e.g., Bezos, Huang) at high valuations (Magnificent Seven at 50x free cash flow) predicted a slowdown. Insiders remain cautious, with no significant buying.
• Economic Outlook: Corporate leaders anticipate a recession, with earnings revisions driving stock declines. Felder sees a slow, painful grind down, akin to the dot-com bust, not a sharp 2008-style crash.
• Tariff Uncertainty: Trump’s tariffs (e.g., 145% on China) add unpredictability, but insiders’ bearishness predates them, reflecting broader slowdown fears.
• Capital Flight: Money is flowing out of U.S. assets (stocks, bonds, dollar), with gold surging as a safe haven, signaling potential dollar devaluation, reminiscent of 1971’s gold standard exit.
• Warning Signs: Key indicators include dollar weakness, bond market stress (10-year Treasury yields nearing 5%), and a 7% fiscal deficit during expansion, raising debt crisis fears (echoed by Ray Dalio, Scott Bessent).
• Fed Dilemma: Persistent inflation (median CPI at 3.5%) limits Fed action, with “transitory” rhetoric risking credibility. Tariffs and a weaker dollar could fuel secular inflation.
• Investment Shifts: Felder is bullish on commodities (e.g., oil, energy stocks), citing low prices, bearish sentiment, and insider buying (e.g., Buffett, Icahn). Emerging markets and Europe may offer value, but U.S. recession risks temper optimism.
• Risks: A mishandled trade war or debt crisis could spiral, with modern factors (401k exposure, rapid information flows) amplifying panic compared to the 1970s.

Felder urges diversification into real assets and international markets, warning of a debt-driven crisis if policy missteps occur.

Navigating Market Chaos: Bonds, Volatility, and Global Shifts

More Pain Ahead? With Jared Dillian (YouTube link)

In the discussion between Maggie Lake and Jared Dillian, they analyze the chaotic market conditions as of April 11, 2025, focusing on several key points:

1. Bond Market Turmoil: Dillian highlights the bond market's instability, suggesting China might be selling U.S. bonds in retaliation to Trump’s tariffs, causing yields to spike despite deflationary economic data (e.g., CPI, PPI). He favors going long on bonds into the weekend, anticipating a potential U.S.-China deal that could rally bonds.
2. Market Volatility: The VIX surged to 60, indicating extreme volatility, but has since dropped to 38. Dillian has been selling S&P puts, capitalizing on high option prices, and warns against buying expensive options in such conditions.
3. Stock Market Dynamics: Stocks rallied (NASDAQ +2%, S&P +1.5%), but Dillian believes the market may retest recent lows before a potential rally to 5600-5700, comparing this week’s action to the post-9/11 market in 2001 (sharp drop, consolidation, then a bear market).
4. Dollar Weakness: The dollar has seen a sharp decline (five standard deviations), which Dillian views as oversold. He expects a short-term bounce within weeks but remains bearish long-term (2-3 years), citing tariff policies favoring a weaker dollar.
5. Gold and Commodities: Gold’s rally is linked to financial instability and possibly China buying gold with dollars from bond sales. Dillian sees this as early-stage, advising to buy despite new highs. He’s cautiously optimistic on copper, expecting resistance at $4.73-$4.74.
6. Liquidity Concerns: Bond market liquidity is severely strained, with even small trades moving prices significantly, signaling high volatility and cautious trading.
7. U.S. Asset Confidence: Dillian notes damaged confidence in U.S. assets (stocks, bonds, dollar), likening the situation to emerging market dynamics. He advocates for international diversification (40-50% of his portfolio is non-U.S.).
8. Federal Reserve Outlook: He dismisses QE in the near term, predicting a recession might not hit until fall, potentially prompting rate cuts later in 2025. However, a Fed rate cut now could steepen the yield curve, raising yields further.
9. Trade Deal Speculation: Markets may be anticipating U.S.-China trade deal announcements, but Dillian focuses on asymmetric opportunities (e.g., bonds) rather than betting on specific outcomes.

Overall, Dillian advises caution, emphasizing experience, diversification, and strategic trades to navigate the volatile, uncertain market landscape.