4/29/25 Live Trading Room Market Recap & Trades
Stonks Only Go Up
Lots of earnings, economic & sentiment data coming in to confirm the worry we feel but don't see in markets.
Consumer Confidence - 86, lowest it’s been in five years. Inflation expectations: 7%!
JOLTS - falling. Jobless Claims due in Thurs; I am waiting on 267K before market panics. NF Payroll Friday is not expected to surprise.
For Q1 earnings so far - revenue growth is tracking at 4.6% (ratcheted lower from Q4 '24). If this holds up, it will mark the 18th quarter in a row of revenue growth, but Q2 estimates are being reduced enough to question how much lower... [image h/t Brian Gilmartin]
Tomorrow we get a look at GDP and PCE.
Yesterday, we got the quarterly refunding announcement by Treasury on how much more they need to fund the government...
U.S. Treasury will now need to borrow $514 Billion this quarter, an increase of 320% from its previous estimate
Here's what's important to keep in mind:
US is not borrowing money to finance future investments (productive use of money) but to fund profligate fiscal spending that represents US govt living beyond its means (destructive use of capital).
So instead of cutting spending, Treasury borrows & Fed prints to fund the continued fraud, waste & abuse that is Congress - like paying more interest on the US debt than military or Medicare! It’s very dangerous & inflationary.
Dalio has been warning - more now than ever:
“I fear that we are moving beyond the ideal time to be knowledgeable about and properly plan for these big changes in the world order” Dalio
Full article is here.
Stonks Only Go Up
The market has been conditioned to believe that equities must rebound and volatility will inevitably drift back into the teens like it always has. This mindset has worked well for years during monetary dominance, but I believe it overlooks a fundamental shift—the fact that we are in a new monetary regime with structural changes that will directly impact the usual and customary forces of relying on Fed Liquidity to save us.
Going back to the Great Financial Crisis of 2009, the stock markets became a function of liquidity supplied by FED and with that, liquidity absorbers were born: NASDAQ, BITCOIN, TSLA, NVDA...
US Treasury goosed the liquidity (borrow/print) & forced Hold-to-Maturity (legal hack to hide unrealized losses). Both programs in 2009 were supposed to be emergency/transient programs, but they doubled down - again (2012) and again (2017) and again (2019) and again (2020) and again (2023).
Cancelling Libor and turning macro-funds into VIX sellers, while making global central banks & TBTF banks linked to dollar funding provided by the Fed in opaque overnight markets, created a closed loop of carefully concealed toxic waste. No way to properly price equities, bonds, commodities or currencies. No way to price risk. So stonks only go up!
Now what has changed?
MONEY GOES HOME
meets
MONEY STAYS HOME
Ironically, this is a feature of Trump/Bessent's policies, not a bug!! They kick out the immigrants. They kick out the importers. They kick out the foreign capital (unless the country agrees to tariff removal in exchange for them buying more USTs). That's the dangerous game they are playing and report card so far is failing grade.
Given Capital Flows & Confidence underpin the foreign & domestic flows into markets, as these stabilization forces leave, inflation will enter as economy contracts.
Stocks will rise because the yardstick they are measured in (USD) falls.
In the meantime, I look for the INTERVENTION TELLS:
Trump/Bessent talking up equities & bonds on upcoming potential PEACE DEALS, TRADE DEALS, TAX CUT DEALS.
Dimon & big banks petitioning Treasury for reduced SLR (Supplementary Leverage Ratio) which is the capital requirement that ensures banks hold sufficient capital relative to their total leverage exposure. This would allow banks to hold more US Treasuries, freeing up Bessent to push the risk spectrum further out. Once we get word of relaxed SLR, look for...
POWELL CAPITULATION - where announced 'normative' rate cuts will not only help market sentiment but actual bank returns.
But when they start selling banks & Nasdaq, why buy anything else?
TRADE UPDATES
Bullish Bent Continues...