Markets, Tariffs & Deals: Between Truce & Turmoil - What's Next?

NVIDIA earnings took center stage. Powell stayed steady. Trump swung a hammer at clean energy. And bond investors in the U.S. and Japan are getting nervous for very different reasons.

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Welcome back to MacroMashup—the sharpest 7-minute read in macro. No fluff. Just signal.

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NVIDIA: The New Fed Day for Tech?

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Forget Powell, Wall Street’s real Fed Day this week was NVIDIA’s earnings call.

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• Revenue: $44.06B, up 69% YoY
  
• Gross profit: $26.7B (60.5% margin)
  
• Net income: $18.8B (including a $4.5B charge on Trump-era export restrictions)
  
• Data center growth: +73%

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Markets treated NVIDIA as a proxy for:

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• AI investment cycles
  
• Big Tech capex
  
• Global sentiment on semiconductors, especially China’s $50B AI market

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Despite risks, implied volatility was down (-7.4%), well below historical norms (-11.4%).

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CEO Jensen Huang = dynamic signal.

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Trump = chaotic noise.

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Powell = steady… but surprisingly volatile.

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(86% of S&P rallies follow rate cuts. Powell drives more volatility than his predecessors.)

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Not Everyone’s Impressed by Powell

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Former Dallas Fed insider Danielle DiMartino Booth argues the Fed is already behind the curve:

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• Recession began in Q1 2024 (according to her metrics)
• Bankruptcies now match 2008 levels
• Household delinquencies are spiking
• Credit conditions are tightening
• Small business sentiment collapsing

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Her view:

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• Rates must drop to 2%—now
• Fed should shift from lagging data to real-time metrics
• Delays risk systemic damage

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One take? Yes. A smart one? Absolutely.

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Are Tariffs Really Inflationary? Not Always.

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The common narrative says yes. The data says… maybe not.

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• Substitution & demand destruction keep prices in check
• Trump-era tariffs = short-term supply shock, not long-term inflation
• Goldman Sachs projects PCE inflation peaking at 3.5% in 2025, easing to 2.6% in 2026

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But margins get squeezed. Labor takes the hit.

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‍Breaking: The U.S. Court of International Trade just ruled that Trump overstepped his authority under the 1977 emergency law. Some tariffs will be unwound within 10 days.

Breaking (Part 2): A Federal Appeals Court allows tariffs to stay in effect…for now. Calling the Supremes.

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Lousy Bond Auctions

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Japan & U.S. Bond Investors are in a bad mood:

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• The 20-year and 40-year JGB (Japanese Government Bonds) auctions (May 2025) saw the lowest demand since July 2024, amid concerns over fiscal sustainability.
• Yields surged: 20-year 2.56%; 30-year JGB yields hit 3.14%, while 40-year yields spiked to 3.6%**, all-time highs.
• The U.S. is worse: 10-year yields are above 4.5%, and long-term yields (20- and 30-year) jump above 5%.

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Same result, different reasons:

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Net International Investment Position (NIIP): Structural Divergence

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• Japan = world’s largest creditor—owns $3.48 trillion more in foreign assets than foreign owns Japanese assets.
• U.S. = world’s largest debtor—foreigners own $26 trillion more U.S. assets than the U.S. owns foreign assets.
• It’s all about persistent trade surpluses for Japan and opposite for the U.S.
• Japan’s Debt/GDP ratio is way higher than the U.S., but adjusting for the NIIP…

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Japan’s problem?

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• Aging population.
• Policy uncertainty.

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U.S. problem?

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• Political gridlock.
• Lack of political will to fix the deficit.
• Running out of investors to buy its debt.

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Bigger problem?

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• Declining confidence in USD and fiat systems.
• China and BRICS are building BRICS Pay, which threatens the USD and SWIFT—it settles in 7 seconds.

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Clean Energy Just Got Hit With a Sledgehammer

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The House passed the One Big, Beautiful Bill—and it slashed many of the Inflation Reduction Act’s signature green incentives:

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Clean Energy Production/Investment Credits:

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• Immediate termination, unless construction starts within 60 days of enactment and operation by 12/31/28.

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Residential/Commercial Energy Credits

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• Expire for property placed in service after 12/31/25—ends third-party leasing.

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EV Credits and Chargers

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• Ends for most EVs and chargers after 12/31/25—limited exception for some EVs until 12/31/26.

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Advanced Manufacturing Credit (45X)

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• Phaseout by 2032.
• Transferability ends after 2027.

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Clean Fuel Credit (45Z)

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• Extended to 2031.
• Stricter sourcing and emissions rules.
• Transferability ends after 2027.

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Nuclear Incentives (45U)

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• Maintained/enhanced.
• No phaseout until 2031.

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New "Foreign Entity of Concern" (FEOC) restrictions

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• Limit foreign ownership and control in U.S. clean energy projects, primarily targeting Chinese involvement.
• Effective 1/1/26.

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The bill now moves to the Senate, where substantial amendments are expected/hoped for—unless Trump can strongarm Senators too…

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In the Markets: Who’s Right—Danielle or Darius?

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Two respected voices. Two different reads on the economy.

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Danielle DiMartino Booth

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• Sees hard data turning south: bankruptcies, job losses, loan delinquencies
• Believes a recession already started
• Advocates for urgent cuts

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Darius Dale

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• Says soft data is noisy, but the hard data remains solid
• Sees fiscal and monetary stimulus holding the floor
• Follows a signal-based investment system, and puts money behind it

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Lesson?

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Without a system, you’re just reacting to headlines. And that’s a losing strategy.

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If your only signal is your newsfeed or podcast queue, you’re trading blind.

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Weekly charts + market data.

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🎧 Want to hear both sides? We’ve linked Danielle’s and Darius’s latest interviews here:

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How do you decide who’s right?

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Darius Dale manages money, his own included, based on the signals his system provides. Here is his take.

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Danielle DiMartino Booth advises money managers. Check out her viewpoints here.

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Who Owes What To Whom

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Market charts this week are largely “unch”: up, down, leadership changes, capital rotation etc.

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This one, though, is worth a look. The blue line—massively negative at $26 trillion—is the net international investment position of the U.S. compared to the rest of the world.

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America is truly exceptional…

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Trump’s tax play is here. And yes, it’s big, beautiful, and completely unaffordable.

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BREAKING NEWS: The House just passed the One Big, Beautiful Tax Bill—with last-minute concessions that rewrote the rules for clean energy investment. We at Dakota Ridge Capital are monitoring the situation closely and sending timely updates to our mailing list. Read more here.

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Key Provisions:

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• Middle-class relief: Expanded credits, lower rates for households under $200K
• Business perks: R&D credits, full expensing, and factory-friendly deductions.
• Infrastructure money: Roads, energy, digital upgrades.
• Tariff buffer: Assistance for workers and industries exposed to global trade.
• Retirement twist: MAGA accounts ($5,000/yr, with $1,000 seed for newborns).
• Top tax rate stays at 37%—no reversion to 39.6%.
• IRA trimmed, but not gutted.

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But the trade-off? A deficit surge.

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Markets love tax cuts. Bonds, not so much.

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Markets Turn Risk-On—But Bond Traders Aren’t Buying It

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Global growth is still slowing:

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• IMF, World Bank, and OECD all trimmed forecasts.
• Global GDP for 2025: 2.3%—not keeping pace with inflation.
• U.S. expected to grow 2.2%, EU just 1.1%, Eurozone a weak 0.9%.

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What changed? April 7 happened.

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• Stocks crashed, bonds buckled.
• Gold soared. Bitcoin held.
• The screen was red, and portfolios bled.
• Tariff worries seeped into global trade forecasts.

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But since then…

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• Tariff ‘deals’ appeared quickly.
• Equities rebounded fast.
• Bonds? Still nervous.
• MOVE index (bond volatility) spiked above 135—a level that triggers action from someone, somewhere

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Why the divergence?

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• U.S. debt issuance: ~$1T rolling over in 30 days
• Credit downgrade.
• Inflation still sticky, Fed still frozen.
• Deficits projected to grow.

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Meanwhile, while stocks have been pulling capital from gold and silver, all three began to trade up together…until stocks got hit by a weak bond auction.

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Middle East Deals: Big Numbers, Bigger Implications

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The Gulf is betting on U.S. stability—with trillions.

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Defense

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• Saudi Arabia: $142B in U.S. defense contracts.
• Qatar: $96B deal including Boeing’s largest aircraft order and $42B in weapons.

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Tech & AI

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• Saudi’s DataVolt to invest $20B in U.S. AI/data centers.
• Google, Oracle, AMD, Salesforce, Uber: $80B in joint U.S.-Saudi initiatives.

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Energy & Infra

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• GE Vernova exporting $14.2B in gas turbines.
• U.S. firms tapped to build airports, parks, entire cities in the Gulf.

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Financial & Real Estate

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• Qatar’s direct investment in the U.S. hit $3.3B in 2023—and growing.
• Gulf sovereigns signal this is just the start.

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Investor Takeaway: Watch defense, tech, and infra stocks with MENA exposure.

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Still Unsure What To Do With Your Portfolio? Start Here.

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April 7 was a gut check. Remember how you felt?

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• Did you panic sell?
• Dump everything into cash?
• Swear off risk?
• Or did you double down with a plan?

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Now that the dust has settled, ask:

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• Were your decisions signal-based—or emotion-based?
• Were you following narratives, or following a system?

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The Case for Systems Over Sentiment

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What works:

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• A framework for identifying market regimes (growth, inflation, liquidity)
• Macro factor tracking (yields, spreads, commodities)
• Regime-based asset allocation rules
• An overlay that adapts for momentum, volatility, and price

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There are many options—just don’t fly blind.

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In the Charts

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• S&P 500: Net positive YTD, despite the noise
• 10-Year Treasury: Still elevated, still flashing caution.
• Weak 20-year Treasury auction spooks bonds and weighs on stocks.
• Gold vs. Bitcoin: Volatility gap narrowing—watch this pair.
• USD: Direction unclear, but Treasury actions suggest soft-dollar bias.

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• Volatility in both stocks and bonds spiked during the tariff tantrum.
• MOVE Index (bond equivalent of VIX): Spiked in April, now retreating, but still above comfort levels.
• MOVE hitting 135 → alarm bells and some version of the cavalry arrives.
• Lower volatility helped stocks rebound—why not bonds?

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• Elevated yields? Dealers going short ahead of the auction nudges the price down/yield up and locks in a profit.
• Moody’s downgrade of the U.S. credit rating?
• Big deficit worries—the One Big, Beautiful Tax Bill will not fix that.
• Treasury market struggles show up in weak 20-year auction (mentioned 3x because…).

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Weekly Highlights

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We’re proud to share this in-depth feature in Clockwork’s latest blog: “The Hidden Engine of Clean Energy.” Dive into how Dakota Ridge Capital is helping shape the future of renewables through innovative tax equity strategies.

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Watch or listen to Episode 4 of the MacroMashup podcast: featuring Manish Jain, CEO and Founder of Mezzi Wealth. If you’re looking for a way to take control of your investments, give it a listen. Manish and his team give you a fantastic tool to organize and understand your investment portfolio.

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Watch or listen to Dr. Pippa Malmgren on tariffs, power politics, and what the headlines aren’t saying.

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Enjoyed this newsletter? Get Involved.

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• Subscribe to MacroMashup: one email a week, zero noise.
• Watch us on YouTube, or tune in via Spotify / Apple
• Collaborate with us at contact@macromashup.com

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What Is The Tariff Strategy?

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The markets have been waiting for Liberation Day. Now it has arrived, what does it mean?

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President Trump said the ‘reciprocal’ tariffs would be 50% of the rate charged to the U.S. The method used by the administration is:

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There are two problems with this:

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• It is cumulative, so the reciprocal rate is stacked on tariffs already levied, e.g. add the reciprocal tariff of 34% to the existing 20% tariff on China, taking the total tariff to 54%
• It is not clear how or when this tariff will roll-off

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The upside is that this is probably the worst case, so things can only get better from here, and at least we have some certainty now…

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What’s The Plan?

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Here’s an overview of what Trump is trying to accomplish with his tariff strategy:

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The strategy intends to shift the dots toward the reciprocity line. The historical quid pro for this asymmetry has been that the U.S. should receive support from the U.N. votes.

This has not worked out so well: most of the beneficiaries of the asymmetrical trade balance with the U.S. have voted with the U.S. less than 50% of the time.

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The plan is to take tariffs back to pre-1950 levels - even if it means inflation.

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But, the plan is not working…yet:

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• Inflation is not under control

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• And new business orders and small business capex plans are trending in the wrong direction:

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Our post-WWII, post-Bretton Woods deal with the rest of the world is that we buy everyone’s ‘stuff’—which drives the trade deficits—and we ‘export’ premium-priced financial assets such as stocks and bonds.

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If this deal is going to change—and President Trump wants it to change—then there will be outflows from stocks and bonds. This is one reason the financial markets are freaking out.

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According to Treasury Secretary Scott Bessent, the administration is attempting to significantly reset the economy, but for Main Street, not Wall Street, which is designed to set the U.S. on a much stronger footing.

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In the short term, however, the impact on the investment landscape is volatile.

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Here are a few screenshots before during and after the tariff announcements:

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Before the announcement

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SQQQ, the 3x leveraged bet on the NASDAQ going down was down on the day.

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After the announcement

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SQQQ turned around in the aftermarket yesterday and is now up nearly 14% Thursday afternoon.

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I’m Not Smart Enough to Trade This Market - Your Mileage May Differ

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Navigating this chaotic market is very hard. The long-term policy post-reset may be a good one, but getting there is like threading the eye of a tiny needle. You have to have great eyes or great trading tools.

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The chart above is crazy.

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• It shows the NASDAQ 100 index and the 3x leveraged inverse ETF SQQQ, which bets on the NDX going down.
• The bar at the bottom indicates Relative Strength Index (RSI) divergence. RSI is an indicator of momentum based on price changes in the last 14 days.
• The RSI divergence measures divergence from that momentum. Divergence indicates possible reversals of momentum.
• Look at the number of bull and bear divergences in the last five days!

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Pro Tip: Stay on the sidelines when the market is like this to avoid getting hurt. Bets in either direction could be terribly wrong…or terribly right.

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Tools You Can Use If You’re Not a Day Trader

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There are two pattern indicators I like over longer cycles:.

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• Kondratieff Wave
• Elliot Wave

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Here is a quick compare and contrast:

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• Kondratieff is a tool for understanding which market season we are in.
• Elliot is a way to understand how prices behave within that season.

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• he chart above shows the gold price over the last five years with Elliot waves plotted.
• A quick summary is that a typical wave cycle involves five impulse waves up or down. You can see those waves on the left in 2020 and right since 2024.
• There don’t seem to have been many seasons for gold over the last five years: what climate alarmists would describe as a strong secular warming trend!
• The fifth wave signals the end of a cycle, where gold seems to be at the moment.

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• The chart for Bitcoin over a similar period shows many more seasons and waves. The fifth wave occurred at $108,000, followed by a strong movement down, after which it has been range-bound between $80,000 and $90,000.3

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Pro Tip: Now might be a good time to realize some gains in gold in anticipation of a possible downward wave—a sell signal, but not all of your position.

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Bitcoin is a definite hold at this point. You were wise to sell above $100,000 or even in the 90s, but now, within the $80,000-$90,000 range, no strong trend is visible.

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What Is The Genius Act?

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• It stands for Guiding and Establishing National Innovation for U.S. Stablecoins. Huh?
• The legislation is designed to create a sound regulatory framework for stablecoins.
• Stablecoins are a convenient way to trade in and out of Bitcoin—or any cryptocurrency—without converting funds back into fiat currency via traditional banking systems.
• It sounds boring, but moving cash around into and out of the banking system takes time. With stablecoins, it’s more or less instantaneous.
• Stablecoins need to be backed by undoubted collateral, usually T-bills, to make people feel secure doing this.
• Tether is the most well-known stablecoin

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• Tether’s margins exploded since T-Bills started earning 4%+ interest. They hold T-Bills to back the stablecoins and pay no interest, so…$144 billion of market cap at 4% interest margin…

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A cynic might say that regulation is about allowing banks to enter this very lucrative business. Here’s the legislative language.

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To qualify as a permitted payment stablecoin issuers, a person would have to incorporate in the US and then be either:

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• A federal qualified nonbank payment stablecoin issuer that have been approved by the Office of the Comptroller of the Currency (OCC) pursuant to terms set forth in the Act.
• A subsidiary of an insured depository institution that has been approved by the depository institution’s primary federal regulator (e.g., the Board of Governors of the Federal Reserve System (“Federal Reserve”) for state member banks) pursuant to terms set forth in the Act.
• A state qualified payment stablecoin issuer that have been approved by a state payment stablecoin regulator.

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Here’s how vital Tether is…and how important stablecoins are about to become.

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Takeaway: This is how the government finds another buyer for all the T-bills it needs to issue after it tells China to take back all its surplus capital.

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In The Markets

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I snapped this image around midday Wednesday, four hours before the formal Whitehouse announcement of tariffs. It captures the mood perfectly.

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• Volatility is up over 28%
• Major indices are sharply down by 3.5-4.5%
• Precious metals have had a more volatile week, especially silver, down nearly 6%
• BTC has traded relatively better than the stock indices, and credit spreads have tightened a bit

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Markets are in the process of repricing earnings to reflect the impact of tariffs. This is going to take a while.

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What’s Next/What To Follow?

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If you have so far buried your head in the sand on robots, it might be time to start paying attention, because

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This excellent piece by The Oregon Group provides a crash course with charts. It’s worth a click.

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The Oregon Group

Where will the metals for the robot revolution come from?

🚀 Please smash the ♡ button, subscribe for the banter ✓ and share with friends and colleagues. We are always grateful for your comments and support.Thank you for reading The Oregon Group. Subscribe for free to receive new posts and support our work…

Read more

2 months ago · 34 likes · The Oregon Group

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I watch this four-minute pre-market heads-up by Lance Roberts every morning —this one was Thursday morning. It’s worth a look.

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Lance Roberts

4-3-25 EMERGENCY UPDATE: Tariff Terror

The U.S. Tariff Rate just increased dramatically; this is the worst-case scenario. The new tariffs are stacked on top of previously-existing tariffs. These will have to be dealt with by both manufacturers and consumers: The question is whether or not the cost of the tariffs can be passed on to the consumer. This WILL drastically change companies' forwar…

Listen now

2 months ago · 5 likes · Lance Roberts

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