The smoke signals from Geneva came even faster than the one in the Vatican that announced the arrival of Pope Leo XIV on the world stage. If the US-China trade marathon was a Bollywood movie, Scott Bessant would be dancing wet and wild with the Chinese Vice Premier Lifeng in their Jet d’Eau or kowtowing on those little abraas that criss-cross the Rhône river since it is too hot to throw lovey-dovey snowballs at each other in the ski resort of Crans Montana. The decline in the Swiss franc and Japanese yen in the depths of the Dubai night confirmed to me that Trump and Beijing were both telling the truth. A trade deal of sorts had been inked in Switzerland even if the world does not know its details yet.
The spectacular Trump brokered ceasefire in the Four Day War in the skies above the subcontinent and POTUS-47’s brilliant offer to mediate the ”1000 year old Kashmir” conflict means a certain Nobel Peace Prize for Donny T even if Ukraine, Gaza and Iran fall apart. It also means, it was right for me to go full throttle on succession of risk on trades led by tripling existing positions in Meta, Blackstone, Raytheon and the Aussie dollar, the prime beneficiary of a new trade modus vivendi and PBOC monetary stimulus/fiscal lollipops.
The world will not escape unscathed from the worst trade war since Smoot Hawley tariffs almost 100 years ago. Global investors have been liberated from untold billions in value since Liberation Day. The world’s ports have been devastated by the slump in container shipping and the Black Death in disrupted factories and supply chains. The Western network of alliances, constructed from the rubble of Nazi occupied Europe and the death rattle of imperial Japan’s greater Asia Co-Prosperity Sphere (Tojo’s Asian EU) has been gutted by the nationalist venom of MAGA’s economic high priests. King Dollar had lost its invincible aura and is now on the run against Auric and hopefully now Dr. Copper since I am also mesmerized by the tangible value I see in FCX.
Earnings growth is no longer a given and Ford, Mattel et al have even given up the very idea of full year earnings guidance. Since my macro metrics warn me on recession risk, I will also go long the US Treasury note duration tracker TLT as a cheap hedge at 4.38%. A tactical short on gold is also logical since the yellow metal is overbought and the risk on Euphoria due to the Geneva spirit is all too real.
Only one discordant note on this Green Monday Mubarak. Why is Modi so sullen and silent in his Gujju bunker? Now that he has been so decisively upstaged by Trump and proven a blatant liar by French/US intel on the spectacular air war waged by the PAF against the Rafale/Sukhoi/Armadas he had so lovingly assembled from Srinagar to Pathankot, Bathinda to Halwara? I was abused by his trolls since I knew that the pilots of the PAF were maestros of air combat and even the chest beating jingos of the Indian media, led by Awful Arnab, the Bingo with the Lingo, has been forced to acknowledge that Akhund Bharat now appears to the world as Absurd Bharat. Not to worry, Trump’s olive branch will overcome the miasma of hate that pollutes the very air in India and Pakistan. I at least have done my little bit to foster peace between our two great nations as I fell in love with and married not only an Indian woman but a direct descendant of Emperor Shah Jahan.
I expect a money making carnival tonight in New York with 3-4% rise in the S&P 500 and a 4-6% rise in Nasdaq. Gold should fall at least $120 an ounce and the King Dollar should kick some serious derriere against the yen and, above all, the Swissie. Even the Eurovision contest had to be moved from Zurich to Basel so that fans could stay in cheap hotels/Airbnbs across the Rhine in France or the Fatherland. I would love to hear about some of your fave European equities ideas as I want to move beyond my golden oldies BNP, Shell, SAP, Heineken, Siemens, the Poland tracker, Leonardo and BAE Systems. I would not touch Dassault with a barge pole since I bet Modi will order his bankers to short the hell out of the guys who sold him aero-junk like Rafale, quelle horreur yaar!!!
via Thriller in Geneva and Trump in Kashmir!