Never a dull moment since January 20, 2025! This weekend, POTUS imposed 25% tariffs on Mexico and Canada, and 10% on China, which go into effect on Tuesday.
From an initial market perspective, tariff trade war fears have triggered a risk-off reaction from Bitcoin-- the only highly liquid weekend market that can give us insight into what to expect for Sunday evening and Monday morning trading. Cash Bitcoin has nosedived from around 103,000 to as low as 96,900 (-6%) since late Friday in advance of and after confirmation from POTUS that he intends to make foreign countries-- allies and adversaries alike-- pay a penalty for access to our consumer markets if the Trump Administration perceives they are treating the U.S. "unfairly."
Even if leaders of Mexico, Canada, and China agree to rectify the situation, most likely, the Trump Administration will continue to impose the tariffs until the data prove that U.S. borders are closed, much safer, and cross-border fentanyl has slowed to a trickle, which could take several months. In other words, the positive impact of the tariffs on immigration and drug trafficking will take a while to emerge, but the negative impact on the cost of many US goods could elevate much more rapidly.
Without getting too much into the weeds on a Sunday afternoon, unless the leaders of Mexico, Canada, and China offer POTUS some fantastic concessions (whatever those might be) to reverse Trump's tariff authorizations, traders and investors will find themselves in the position of parsing out winners, losers, and unintended consequences in the weeks directly ahead.
Welcome back to "Trump World!"
Technically, it is significant that today Bitcoin sliced beneath last Monday's (1/27/25) "DeepSeek" AI pullback low at 97,700. This leaves BTC vulnerable to a downside continuation toward a full-fledged test of much more consequential support from 89,000 to 92,000. Let's see what happens overnight into Monday morning's market openings.
Join me and our MPTrader members for opportunistic intraday discussions about individual stocks during the height of Earnings Season, market indices, sector ETFs, bond proxy ETFs, commodities, precious metals, and Bitcoin.
