WEBVTT 00:00:00.000 --> 00:00:01.960 All right, you've given us a really interesting 00:00:01.960 --> 00:00:04.059 set of materials for today's deep dive. Yeah, 00:00:04.139 --> 00:00:07.339 a couple of key snapshots from April 17th, 2025. 00:00:08.019 --> 00:00:10.240 Exactly. We've got a market analysis from Hedgeye, 00:00:10.439 --> 00:00:13.220 always sharp stuff from them, and then a political 00:00:13.220 --> 00:00:16.620 roundup from Electoral Vote News. So the mission 00:00:16.620 --> 00:00:19.660 today is basically to pull out the most important 00:00:19.660 --> 00:00:22.559 nuggets, see where the economic picture might 00:00:22.559 --> 00:00:25.359 overlap with the political one. And try to make 00:00:25.359 --> 00:00:27.579 sense of it all without getting completely overwhelmed 00:00:27.579 --> 00:00:29.699 by the detail. You got it. Giving everyone listening 00:00:29.699 --> 00:00:32.840 a clear view. So where should we start? Hedgeye's 00:00:32.840 --> 00:00:35.320 market view. Let's do it. The economy first. 00:00:35.399 --> 00:00:39.759 Yeah. The big headline seems to be gold. Wow, 00:00:39.939 --> 00:00:42.460 yeah. It's really making waves. Not just all 00:00:42.460 --> 00:00:45.600 time highs, but it's best week since. March 2020, 00:00:45.700 --> 00:00:47.880 that was peak pandemic uncertainty. That's right. 00:00:48.000 --> 00:00:50.219 And it's not just the metal itself. Gold miners 00:00:50.219 --> 00:00:53.840 ticker GDMN. They're apparently the number one 00:00:53.840 --> 00:00:56.100 asset allocation in global macro right now. Across 00:00:56.100 --> 00:00:58.939 all short term. Timeframes, one week, one month, 00:00:59.000 --> 00:01:01.560 three months. Yep, all of them. It's quite the 00:01:01.560 --> 00:01:03.380 signal. So investors are flocking there. What 00:01:03.380 --> 00:01:05.480 kind of numbers are we talking about for, say, 00:01:05.739 --> 00:01:08.700 the ETFs? Hedgeye highlights a few. GLD, that 00:01:08.700 --> 00:01:11.819 tracked gold price, it's up 10 .9 % since late 00:01:11.819 --> 00:01:15.019 February. OK. AAU, another gold ETF, that's up 00:01:15.019 --> 00:01:18.189 13 .1 % since late February. Even better. And 00:01:18.189 --> 00:01:21.269 the miners themselves, GDX, they've surged almost 00:01:21.269 --> 00:01:25.049 24%, 23 .9%, to be exact, since late February. 00:01:25.189 --> 00:01:27.569 And how's that compared to the broader market, 00:01:27.670 --> 00:01:30.129 like the S &P 500? Well, that's the kicker. In 00:01:30.129 --> 00:01:32.709 roughly the same period, since Feb 25th, the 00:01:32.709 --> 00:01:37.609 S &P is down 12 .7%. Whoa. That's a massive divergence. 00:01:37.810 --> 00:01:40.340 It really is. And hedge eye. They're sticking 00:01:40.340 --> 00:01:42.159 to their guns, staying bullish on gold. Still 00:01:42.159 --> 00:01:44.500 recommending buying on dips, I see. Exactly. 00:01:44.739 --> 00:01:47.459 So what's the takeaway here, this flight to gold? 00:01:48.060 --> 00:01:49.939 What does it tell us about how the market's feeling? 00:01:50.120 --> 00:01:54.060 Well, it typically signals nervousness, heightened 00:01:54.060 --> 00:01:56.140 unease about traditional assets like stocks. 00:01:56.260 --> 00:01:58.959 So increased perceived risk. Could be economic 00:01:58.959 --> 00:02:01.620 worries, inflation, geopolitics. It could be 00:02:01.620 --> 00:02:04.159 any or all of those. When a traditional safe 00:02:04.159 --> 00:02:06.659 haven like gold gets this much attention, it 00:02:06.659 --> 00:02:08.560 suggests there's significant anxiety floating 00:02:08.560 --> 00:02:11.169 around. Got it. And it's not just gold acting 00:02:11.169 --> 00:02:13.009 up right. The U .S. dollar is also mentioned. 00:02:13.090 --> 00:02:15.590 That's right. It's on a bearish trend. Hit its 00:02:15.590 --> 00:02:18.889 lowest level since April 2022 apparently. And 00:02:18.889 --> 00:02:22.889 it's worst week since November 2022. Which interestingly 00:02:22.889 --> 00:02:25.689 means long positions and other currencies are 00:02:25.689 --> 00:02:29.069 doing well. Hedgeye points to the euro, Fefexy, 00:02:29.469 --> 00:02:32.349 up almost 4 percent since late March. OK. And 00:02:32.349 --> 00:02:35.449 the yen, Fefexy, that's up over 2 percent since 00:02:35.449 --> 00:02:38.590 just early April. So gold suggests worry about 00:02:38.590 --> 00:02:40.990 markets, maybe the dollar weakness points to 00:02:40.990 --> 00:02:44.430 shifts in what, global economic standing? Or 00:02:44.430 --> 00:02:46.629 investor views on the U .S.? Could be. Yeah. 00:02:46.750 --> 00:02:48.729 A weaker dollar makes U .S. exports cheaper, 00:02:49.050 --> 00:02:51.449 imports more expensive. But yeah, on a bigger 00:02:51.449 --> 00:02:53.449 scale, it can suggest investors are looking more 00:02:53.449 --> 00:02:55.229 favorably at other economies compared to the 00:02:55.229 --> 00:02:57.590 U .S. or maybe anticipating different growth 00:02:57.590 --> 00:03:00.139 trajectories. OK. Now, something else HedgeEye 00:03:00.139 --> 00:03:02.860 flagged was volatility, increased market protection, 00:03:03.280 --> 00:03:05.580 a jump in the VIX. Yeah, specifically the short 00:03:05.580 --> 00:03:07.719 -dated VIX. That's the market's fear gauge, basically 00:03:07.719 --> 00:03:09.699 measuring expected volatility in the near term. 00:03:09.900 --> 00:03:11.759 And they mentioned this F bucket. What's that 00:03:11.759 --> 00:03:14.460 about? It's their term for a VIX range between 00:03:14.460 --> 00:03:17.340 roughly 28 and 55. They have this analogy. They 00:03:17.340 --> 00:03:19.159 say being in the F bucket is like standing on 00:03:19.159 --> 00:03:21.439 a floor where even a feather dropping could break 00:03:21.439 --> 00:03:25.419 it. Yikes. So. Highly fragile, prone to sudden 00:03:25.419 --> 00:03:28.199 spikes. Exactly. And the VIX is currently at 00:03:28.199 --> 00:03:32.039 31 .3, so it's well within that bucket and has 00:03:32.039 --> 00:03:34.539 room to move higher. That fragility seems to 00:03:34.539 --> 00:03:36.560 fit with our overall stance on U .S. stocks, 00:03:36.759 --> 00:03:39.319 doesn't it? Mostly bearish. Decidedly bearish, 00:03:39.400 --> 00:03:41.699 yeah. They're advising against chasing any bear 00:03:41.699 --> 00:03:44.080 market bounces. And their only U .S. equity position 00:03:44.080 --> 00:03:46.580 is... Gold miners, the ones we just talked about. 00:03:46.900 --> 00:03:48.580 Right, everything else they're avoiding or even 00:03:48.580 --> 00:03:51.360 shorting. Yeah, they're short the MG7 tech stocks, 00:03:51.900 --> 00:03:55.099 semiconductors via 7H, and even a leveraged semi 00:03:55.099 --> 00:03:59.560 ETF, 7SSL. Wow, they mentioned NVDA took a big 00:03:59.560 --> 00:04:02.259 hit too. Yeah, down 29 % since their deep seek 00:04:02.259 --> 00:04:05.139 analysis day, and it was down almost 36 % at 00:04:05.139 --> 00:04:07.819 its lowest point. OK, so bearish on tech, bearish 00:04:07.819 --> 00:04:10.439 on broader equities. What about commodities like 00:04:10.439 --> 00:04:13.340 oil? Crude oil is also in a bearish trend, according 00:04:13.340 --> 00:04:15.680 to them, down 21 percent from its cycle peak. 00:04:15.740 --> 00:04:18.139 Then was down even more at one point. Twenty 00:04:18.139 --> 00:04:20.680 five point six percent at its worst. Yeah. So 00:04:20.680 --> 00:04:22.779 just worries about global demand, maybe. Now, 00:04:22.800 --> 00:04:24.459 this is interesting. There's all this talk about 00:04:24.459 --> 00:04:27.259 tariffs potentially causing inflation. But Hedgai's 00:04:27.259 --> 00:04:30.870 model says something different. Right. It's a 00:04:30.870 --> 00:04:33.250 disconnect. Their model actually predicts a slight 00:04:33.250 --> 00:04:36.089 decrease in CPI, the consumer price index, going 00:04:36.089 --> 00:04:40.889 from 2 .39 % down to 2 .33%. Huh. So despite 00:04:40.889 --> 00:04:43.750 the tariff noise, their numbers point down slightly. 00:04:44.009 --> 00:04:46.310 How are they playing that? Their long short -term 00:04:46.310 --> 00:04:48.449 treasury futures, TUA, they're basically betting 00:04:48.449 --> 00:04:50.610 the market will expect more rate cuts from the 00:04:50.610 --> 00:04:53.069 Fed. How many cuts are expected now? Markets 00:04:53.069 --> 00:04:54.810 pricing in about three and a half this year. 00:04:55.089 --> 00:04:57.509 First one maybe in June. The next Fed meeting 00:04:57.509 --> 00:04:59.910 is May 7th. OK. So they think rates will come 00:04:59.910 --> 00:05:02.750 down, boosting those treasury futures. Makes 00:05:02.750 --> 00:05:06.050 sense. What about overseas Europe? A bit of a 00:05:06.050 --> 00:05:08.149 mixed bag there. Poland had a strong overnight 00:05:08.149 --> 00:05:10.930 session up 1 .6 percent. But others were down. 00:05:11.290 --> 00:05:15.529 Italy, Sweden, the broader EU 50 index all down. 00:05:16.069 --> 00:05:18.470 Hedge I notes Poland still seems correlated with 00:05:18.470 --> 00:05:21.370 the ruble USD exchange rate. Interesting. OK, 00:05:21.370 --> 00:05:24.430 one more big economic piece. China's imports. 00:05:25.009 --> 00:05:27.269 This looks like a pretty significant shift. It 00:05:27.269 --> 00:05:29.910 really does. The data shows China's imports from 00:05:29.910 --> 00:05:33.930 the Western world, US, EU, UK, Australia, South 00:05:33.930 --> 00:05:36.089 Africa are way down. Like double digit drops 00:05:36.089 --> 00:05:40.389 for some. Yeah. US down 8 .8 percent, EU 7 .4 00:05:40.389 --> 00:05:43.550 percent, UK almost 17 percent, Australia over 00:05:43.550 --> 00:05:46.569 30 percent, South Africa over 36 percent. Wow. 00:05:46.730 --> 00:05:48.970 And who are they buying more from instead? Mostly 00:05:48.970 --> 00:05:51.480 APAC countries. Taiwan imports are up nearly 00:05:51.480 --> 00:05:55.790 35%, Malaysia up over 21%. That feels strategic, 00:05:55.829 --> 00:05:58.189 like maybe reducing reliance on the West, building 00:05:58.189 --> 00:06:00.290 regional ties. It certainly could be interpreted 00:06:00.290 --> 00:06:02.449 that way, could have major long term implications 00:06:02.449 --> 00:06:05.009 for supply chains, global trade patterns, maybe 00:06:05.009 --> 00:06:06.930 a proactive decoupling move. Definitely something 00:06:06.930 --> 00:06:09.050 to watch. OK, so that's the economic picture 00:06:09.050 --> 00:06:11.110 from hedge eye on April 17th. Let's pivot to 00:06:11.110 --> 00:06:13.810 the political side using the electoral vote news 00:06:13.810 --> 00:06:16.189 roundup from the same day. Sounds like things 00:06:16.189 --> 00:06:18.689 are pretty heated for the Trump administration. 00:06:18.930 --> 00:06:20.689 That's one way to put it. Yeah, the top story 00:06:20.689 --> 00:06:22.810 is a federal judge finding probable cause for 00:06:22.810 --> 00:06:24.519 criminal contempt against some administration 00:06:24.519 --> 00:06:27.379 officials. What's that about? It relates to deportations 00:06:27.379 --> 00:06:30.639 to El Salvador, specifically allegedly ignoring 00:06:30.639 --> 00:06:34.240 a court order, could mean fines, maybe even jail 00:06:34.240 --> 00:06:37.180 time and, you know, a potential constitutional 00:06:37.180 --> 00:06:40.079 crisis brewing. And that connects to Senator 00:06:40.079 --> 00:06:42.360 Van Hollen's trip there trying to get someone 00:06:42.360 --> 00:06:45.379 released. Seems like it. Kilmar Abrego Garcia. 00:06:45.939 --> 00:06:47.939 Van Hollen went down there, couldn't meet with 00:06:47.939 --> 00:06:50.220 President Bukele. but met the vice president. 00:06:50.519 --> 00:06:53.019 And the VP apparently suggested Trump was paying 00:06:53.019 --> 00:06:55.839 El Salvador to keep detaining the guy. That's 00:06:55.839 --> 00:06:58.660 the report. The big question is whether the administration 00:06:58.660 --> 00:07:01.920 is defying a Supreme Court order to facilitate 00:07:01.920 --> 00:07:04.879 his release. That could be huge, potentially 00:07:04.879 --> 00:07:07.660 even impeachment fodder down the line. Meanwhile, 00:07:07.899 --> 00:07:10.399 Trump's also putting pressure on law firms. Yeah, 00:07:10.420 --> 00:07:13.019 the report mentions he's pushing firms that agreed 00:07:13.019 --> 00:07:16.079 to do some pro bono work to take on much more. 00:07:16.220 --> 00:07:19.120 Maybe indefinitely. And lawyers are calling it 00:07:19.120 --> 00:07:21.920 indentured servitude. That's the phrase used, 00:07:22.360 --> 00:07:24.439 raises questions about whether firms might challenge 00:07:24.439 --> 00:07:27.220 him legally, especially if he tries to bar non 00:07:27.220 --> 00:07:29.939 -compliant firms from courtrooms via executive 00:07:29.939 --> 00:07:31.860 orders, which is apparently being floated. Then 00:07:31.860 --> 00:07:35.040 there's the Harvard situation, revoking tax exempt 00:07:35.040 --> 00:07:38.759 status. Reportedly, yes. Trump apparently ordered 00:07:38.759 --> 00:07:42.279 the IRS to do it, likely linked to student demonstrations. 00:07:42.420 --> 00:07:46.019 That would be. Massive. For Harvard and potentially 00:07:46.019 --> 00:07:48.000 other universities if they don't toe the line. 00:07:48.339 --> 00:07:51.120 Like, appointing professors he wants. That's 00:07:51.120 --> 00:07:54.100 the implication raised. It sets up a huge potential 00:07:54.100 --> 00:07:56.860 legal fight and raises serious questions about 00:07:56.860 --> 00:07:59.019 academic freedom and political interference. 00:07:59.379 --> 00:08:01.519 And it makes you wonder if those law firms he's 00:08:01.519 --> 00:08:03.699 pressuring would even be able to oppose Harvard 00:08:03.699 --> 00:08:06.420 in court. Good point. It gets complicated quickly. 00:08:06.620 --> 00:08:08.899 The nomination for U .S. Attorney for D .C. is 00:08:08.899 --> 00:08:12.740 also causing fireworks. Ed Martin. Major controversy 00:08:12.740 --> 00:08:14.939 there. He apparently failed to disclose around 00:08:14.939 --> 00:08:18.040 150 appearances on Russian state TV. Promoting 00:08:18.040 --> 00:08:21.399 pro -Russia, anti -America views. That's the 00:08:21.399 --> 00:08:23.879 allegation. Combined with limited experience 00:08:23.879 --> 00:08:26.420 and other undisclosed stuff, it's raised serious 00:08:26.420 --> 00:08:29.339 red flags. The Senate Judiciary Committee has 00:08:29.339 --> 00:08:32.259 tons of questions, and Senator Schiff put a hold 00:08:32.259 --> 00:08:34.179 on the nomination. But the administration isn't 00:08:34.179 --> 00:08:36.039 winning everything. There was a ruling against 00:08:36.039 --> 00:08:39.950 them on spending. Correct. A judge in Rhode Island 00:08:39.950 --> 00:08:42.909 ruled against Trump's move to freeze funds appropriated 00:08:42.909 --> 00:08:45.730 by Congress, citing the Empowerment Control Act 00:08:45.730 --> 00:08:48.610 of 1974. Which protects Congress's power of the 00:08:48.610 --> 00:08:51.340 purse. Exactly. And it's a nationwide ruling 00:08:51.340 --> 00:08:53.980 potentially freeing up billions in grants for 00:08:53.980 --> 00:08:57.580 agencies like agriculture, energy, EPA, housing, 00:08:58.100 --> 00:09:01.039 funds from the Inflation Reduction Act and other 00:09:01.039 --> 00:09:03.960 Biden era laws. Shifting focus slightly, the 00:09:03.960 --> 00:09:06.379 Democrats seem to have a new line of attack on 00:09:06.379 --> 00:09:09.139 Republicans. Yeah, they're hitting hard on alleged 00:09:09.139 --> 00:09:12.580 insider stock trading. focusing on rep Marjorie 00:09:12.580 --> 00:09:14.580 Taylor Greene's trades after something called 00:09:14.580 --> 00:09:17.320 Liberation Day. And pushing for a ban on members 00:09:17.320 --> 00:09:19.679 of Congress owning individual stocks. That's 00:09:19.679 --> 00:09:22.059 the push. Trying to frame it as a corruption 00:09:22.059 --> 00:09:24.539 issue they think will resonate. Okay. An interesting 00:09:24.539 --> 00:09:27.740 side note in the report was about trade in education. 00:09:28.080 --> 00:09:29.919 Yeah, apparently the U .S. runs a huge trade 00:09:29.919 --> 00:09:32.860 surplus in education. Foreign students bring 00:09:32.860 --> 00:09:35.299 in more revenue than natural gas and coal exports 00:09:35.299 --> 00:09:38.070 combined. Really? That's significant. It is. 00:09:38.289 --> 00:09:40.169 And the report warns that limiting foreign student 00:09:40.169 --> 00:09:42.049 enrollment could hurt universities financially 00:09:42.049 --> 00:09:44.389 and also diminish U .S. soft power globally. 00:09:45.269 --> 00:09:47.929 And speaking of tech and government, Elon Musk 00:09:47.929 --> 00:09:50.909 made a move at the Pentagon. Yes. He reportedly 00:09:50.909 --> 00:09:53.970 eliminated the Defense Digital Service, the DDS. 00:09:54.399 --> 00:09:57.000 That was the unit meant to bring Silicon Valley 00:09:57.000 --> 00:10:00.500 type tech talent into the DOD. And that's controversial. 00:10:00.899 --> 00:10:03.000 Yeah, former senior defense officials are criticizing 00:10:03.000 --> 00:10:06.120 it, saying the Pentagon is losing valuable tech 00:10:06.120 --> 00:10:09.320 expertise. Meanwhile, former President Biden 00:10:09.320 --> 00:10:13.279 is weighing in, particularly on Social Security. 00:10:13.419 --> 00:10:16.059 He's been very critical, accusing the Trump administration 00:10:16.059 --> 00:10:18.720 of taking a hatchet to the program, warning about 00:10:18.720 --> 00:10:22.000 privatization and benefit cuts. A classic political 00:10:22.000 --> 00:10:24.519 battleground. Definitely. The White House response 00:10:24.519 --> 00:10:27.379 was reportedly dismissive. Looking even further 00:10:27.379 --> 00:10:30.000 ahead, the report suggests trade could be a major 00:10:30.000 --> 00:10:32.460 fight within the Republican Party for 2028. Seems 00:10:32.460 --> 00:10:34.519 likely. You've got potential candidates like 00:10:34.519 --> 00:10:36.980 Ted Cruz and Nikki Haley, whose states rely on 00:10:36.980 --> 00:10:39.879 exports, likely leaning anti -tariff. Versus 00:10:39.879 --> 00:10:42.639 pro -tariff figures like JD Vance and Steve Bannon. 00:10:42.899 --> 00:10:45.480 Exactly. And then there's Ron DeSantis, who's 00:10:45.480 --> 00:10:47.759 apparently been quiet on it so far, could be 00:10:47.759 --> 00:10:50.409 a major dividing line in the primaries. Finally, 00:10:50.570 --> 00:10:53.090 there was the Tom Friedman interview about Trump 00:10:53.090 --> 00:10:56.370 and China. What were his main concerns? Friedman 00:10:56.370 --> 00:10:59.330 sounds deeply worried. He argues Trump has an 00:10:59.330 --> 00:11:02.269 outdated view of China, not grasping their huge 00:11:02.269 --> 00:11:05.570 leaps in tech like AI and dark factories. And 00:11:05.570 --> 00:11:08.429 that Trump lacks a strategy for U .S. competitiveness. 00:11:08.809 --> 00:11:12.370 defunding research, dismissing EVs. That's Friedman's 00:11:12.370 --> 00:11:15.250 take. He warns it has serious implications for 00:11:15.250 --> 00:11:17.769 U .S. economic and military strength long -term. 00:11:18.210 --> 00:11:20.809 He sounds profoundly concerned. Wow. Okay, so 00:11:20.809 --> 00:11:23.269 putting it all together, the economic jitters 00:11:23.269 --> 00:11:26.899 seen in gold and the dollar. the market fragility, 00:11:27.200 --> 00:11:29.740 set against this backdrop of intense political 00:11:29.740 --> 00:11:32.480 battles, legal challenges, and these long -term 00:11:32.480 --> 00:11:34.759 questions about competition with China. It's 00:11:34.759 --> 00:11:37.059 a very complex picture. The economic anxiety 00:11:37.059 --> 00:11:38.940 might be feeding off the political uncertainty 00:11:38.940 --> 00:11:41.240 and vice versa. That China trade shift we talked 00:11:41.240 --> 00:11:43.240 about earlier, you could almost see it as China 00:11:43.240 --> 00:11:46.220 reacting to or anticipating some of the political 00:11:46.220 --> 00:11:47.980 instability and rhetoric coming out of the US, 00:11:48.299 --> 00:11:50.120 deciding to shore up relationships elsewhere. 00:11:50.240 --> 00:11:51.960 That makes sense. It all feels interconnected. 00:11:52.320 --> 00:11:54.480 So for everyone listening, thinking about all 00:11:54.480 --> 00:11:56.759 these threats, the market signals, the political 00:11:56.759 --> 00:11:59.960 drama, the global shifts. What do you think are 00:11:59.960 --> 00:12:02.620 the biggest risks or maybe even opportunities 00:12:02.620 --> 00:12:05.600 emerging from this? Yeah, what further questions 00:12:05.600 --> 00:12:08.600 does this snapshot from April 17th raise for 00:12:08.600 --> 00:12:11.019 you about where things might be headed? Definitely 00:12:11.019 --> 00:12:13.059 a lot to chew on. We hope this deep dive helped 00:12:13.059 --> 00:12:15.799 connect some dots. We do. Thanks for tuning in. 00:12:16.039 --> 00:12:17.620 That's it for us today. Thanks for joining the 00:12:17.620 --> 00:12:17.960 deep dive.