Where will the trade war take us?
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| | | | “I remember my grandfather telling me how each of us must live with a full measure of loneliness that is inescapable, and we must not destroy ourselves with our passion to escape the aloneness.”
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| | | | Wow, where to start. On Friday afternoon, Trump announced the first round of tariffs on China, Mexico, and Canada. The market responded with a massive late-hours sell off.
But that was just a warm up. Over the weekend, crypto underwent the most massive liquidation event in history, even bigger than the FTX blowup. Over $800 billion of crypto market cap was wiped off the map in a few hours. So much for crypto being a flight to safety asset, right?
Then to top it off, the S&P opened 2% lower today, and is still dropping. So, what can we gather from all this? Well, for one, the tariffs will impact China and Mexico far more than the U.S.. 75% of Canadian exports come to the U.S. — only 12% of our imports come from Canada. 80% of Mexican exports go to the U.S. — only 14% of our imports come from Mexico.
So, as you can see, America is in a much stronger position than either country. And we can weather the blows far better than Canada. Not to mention, Canadian environmental activists successfully stopped the west-to-east oil pipeline from being built. This means that the only way Canada can transport oil from the fields in the west, to the population centers in the east is via an American pipeline.
So, they have very literal leverage. The base case for Mexico and Canada is a recession in the next couple months. Maybe worse. However, let’s zoom out a little bit. The stock market — after the recent fall — is exactly where it was a month ago. So, even though this recent tumble was severe, the market is still ok.
Meanwhile, gold is rising on the back of all this chaos. Proving that in reality, it is still the king of flight-to-safety assets.
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| | | | In terms of trading ideas this week, I would be looking at consumer defensives like WMT.
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| | | | The 21 FEB 100 CALL options I recommended last week are up 50%. And I still see bullish momentum on WMT.
Also, PLTR is a stock that keeps on giving. I view any dip as a buying opportunity.
However, it needs to be said that everyone should be prepared for high-volatility moves for the next four years. Holding over the weekend may not be the greatest idea for quite awhile, as Trump could tweet something on Saturday that could blow out positions fairly quickly. So, finding trades that you can wrap up before the weekend isn’t the worst idea for the time being.
If you want to see one of these weekly trade strategies, be sure to sign up here and join us today at 12:30PM. | | | | |
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| | | | To Better Trading,
Alex Reid
Wealthpin | | | | |
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______________________________________________________ ______________________________________________________ ______________________________________________________ “I remember my grandfather telling me how each of us must live with a full measure of loneliness that is inescapable, and we must not destroy ourselves with our passion to escape the aloneness.”
- Jim Harrison ______________________________________________________ Wow, where to start. On Friday afternoon, Trump announced the first round of tariffs on China, Mexico, and Canada. The market responded with a massive late-hours sell off.
But that was just a warm up. Over the weekend, crypto underwent the most massive liquidation event in history, even bigger than the FTX blowup. Over $800 billion of crypto market cap was wiped off the map in a few hours. So much for crypto being a flight to safety asset, right?
Then to top it off, the S&P opened 2% lower today, and is still dropping. So, what can we gather from all this? Well, for one, the tariffs will impact China and Mexico far more than the U.S.. 75% of Canadian exports come to the U.S. — only 12% of our imports come from Canada. 80% of Mexican exports go to the U.S. — only 14% of our imports come from Mexico.
So, as you can see, America is in a much stronger position than either country. And we can weather the blows far better than Canada. Not to mention, Canadian environmental activists successfully stopped the west-to-east oil pipeline from being built. This means that the only way Canada can transport oil from the fields in the west, to the population centers in the east is via an American pipeline.
So, they have very literal leverage. The base case for Mexico and Canada is a recession in the next couple months. Maybe worse. However, let’s zoom out a little bit. The stock market — after the recent fall — is exactly where it was a month ago. So, even though this recent tumble was severe, the market is still ok.
Meanwhile, gold is rising on the back of all this chaos. Proving that in reality, it is still the king of flight-to-safety assets.
 In terms of trading ideas this week, I would be looking at consumer defensives like WMT.
The 21 FEB 100 CALL options I recommended last week are up 50%. And I still see bullish momentum on WMT.
Also, PLTR is a stock that keeps on giving. I view any dip as a buying opportunity.
However, it needs to be said that everyone should be prepared for high-volatility moves for the next four years. Holding over the weekend may not be the greatest idea for quite awhile, as Trump could tweet something on Saturday that could blow out positions fairly quickly. So, finding trades that you can wrap up before the weekend isn’t the worst idea for the time being.
If you want to see one of these weekly trade strategies, be sure to sign up here and join us today at 12:30PM. ______________________________________________________ To Better Trading,
Alex Reid
Wealthpin |
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