All right, you've given us a really interesting
set of materials for today's deep dive. Yeah,
a couple of key snapshots from April 17th, 2025.
Exactly. We've got a market analysis from Hedgeye,
always sharp stuff from them, and then a political
roundup from Electoral Vote News. So the mission
today is basically to pull out the most important
nuggets, see where the economic picture might
overlap with the political one. And try to make
sense of it all without getting completely overwhelmed
by the detail. You got it. Giving everyone listening
a clear view. So where should we start? Hedgeye's
market view. Let's do it. The economy first.
Yeah. The big headline seems to be gold. Wow,
yeah. It's really making waves. Not just all
time highs, but it's best week since. March 2020,
that was peak pandemic uncertainty. That's right.
And it's not just the metal itself. Gold miners
ticker GDMN. They're apparently the number one
asset allocation in global macro right now. Across
all short term. Timeframes, one week, one month,
three months. Yep, all of them. It's quite the
signal. So investors are flocking there. What
kind of numbers are we talking about for, say,
the ETFs? Hedgeye highlights a few. GLD, that
tracked gold price, it's up 10 .9 % since late
February. OK. AAU, another gold ETF, that's up
13 .1 % since late February. Even better. And
the miners themselves, GDX, they've surged almost
24%, 23 .9%, to be exact, since late February.
And how's that compared to the broader market,
like the S &P 500? Well, that's the kicker. In
roughly the same period, since Feb 25th, the
S &P is down 12 .7%. Whoa. That's a massive divergence.
It really is. And hedge eye. They're sticking
to their guns, staying bullish on gold. Still
recommending buying on dips, I see. Exactly.
So what's the takeaway here, this flight to gold?
What does it tell us about how the market's feeling?
Well, it typically signals nervousness, heightened
unease about traditional assets like stocks.
So increased perceived risk. Could be economic
worries, inflation, geopolitics. It could be
any or all of those. When a traditional safe
haven like gold gets this much attention, it
suggests there's significant anxiety floating
around. Got it. And it's not just gold acting
up right. The U .S. dollar is also mentioned.
That's right. It's on a bearish trend. Hit its
lowest level since April 2022 apparently. And
it's worst week since November 2022. Which interestingly
means long positions and other currencies are
doing well. Hedgeye points to the euro, Fefexy,
up almost 4 percent since late March. OK. And
the yen, Fefexy, that's up over 2 percent since
just early April. So gold suggests worry about
markets, maybe the dollar weakness points to
shifts in what, global economic standing? Or
investor views on the U .S.? Could be. Yeah.
A weaker dollar makes U .S. exports cheaper,
imports more expensive. But yeah, on a bigger
scale, it can suggest investors are looking more
favorably at other economies compared to the
U .S. or maybe anticipating different growth
trajectories. OK. Now, something else HedgeEye
flagged was volatility, increased market protection,
a jump in the VIX. Yeah, specifically the short
-dated VIX. That's the market's fear gauge, basically
measuring expected volatility in the near term.
And they mentioned this F bucket. What's that
about? It's their term for a VIX range between
roughly 28 and 55. They have this analogy. They
say being in the F bucket is like standing on
a floor where even a feather dropping could break
it. Yikes. So. Highly fragile, prone to sudden
spikes. Exactly. And the VIX is currently at
31 .3, so it's well within that bucket and has
room to move higher. That fragility seems to
fit with our overall stance on U .S. stocks,
doesn't it? Mostly bearish. Decidedly bearish,
yeah. They're advising against chasing any bear
market bounces. And their only U .S. equity position
is... Gold miners, the ones we just talked about.
Right, everything else they're avoiding or even
shorting. Yeah, they're short the MG7 tech stocks,
semiconductors via 7H, and even a leveraged semi
ETF, 7SSL. Wow, they mentioned NVDA took a big
hit too. Yeah, down 29 % since their deep seek
analysis day, and it was down almost 36 % at
its lowest point. OK, so bearish on tech, bearish
on broader equities. What about commodities like
oil? Crude oil is also in a bearish trend, according
to them, down 21 percent from its cycle peak.
Then was down even more at one point. Twenty
five point six percent at its worst. Yeah. So
just worries about global demand, maybe. Now,
this is interesting. There's all this talk about
tariffs potentially causing inflation. But Hedgai's
model says something different. Right. It's a
disconnect. Their model actually predicts a slight
decrease in CPI, the consumer price index, going
from 2 .39 % down to 2 .33%. Huh. So despite
the tariff noise, their numbers point down slightly.
How are they playing that? Their long short -term
treasury futures, TUA, they're basically betting
the market will expect more rate cuts from the
Fed. How many cuts are expected now? Markets
pricing in about three and a half this year.
First one maybe in June. The next Fed meeting
is May 7th. OK. So they think rates will come
down, boosting those treasury futures. Makes
sense. What about overseas Europe? A bit of a
mixed bag there. Poland had a strong overnight
session up 1 .6 percent. But others were down.
Italy, Sweden, the broader EU 50 index all down.
Hedge I notes Poland still seems correlated with
the ruble USD exchange rate. Interesting. OK,
one more big economic piece. China's imports.
This looks like a pretty significant shift. It
really does. The data shows China's imports from
the Western world, US, EU, UK, Australia, South
Africa are way down. Like double digit drops
for some. Yeah. US down 8 .8 percent, EU 7 .4
percent, UK almost 17 percent, Australia over
30 percent, South Africa over 36 percent. Wow.
And who are they buying more from instead? Mostly
APAC countries. Taiwan imports are up nearly
35%, Malaysia up over 21%. That feels strategic,
like maybe reducing reliance on the West, building
regional ties. It certainly could be interpreted
that way, could have major long term implications
for supply chains, global trade patterns, maybe
a proactive decoupling move. Definitely something
to watch. OK, so that's the economic picture
from hedge eye on April 17th. Let's pivot to
the political side using the electoral vote news
roundup from the same day. Sounds like things
are pretty heated for the Trump administration.
That's one way to put it. Yeah, the top story
is a federal judge finding probable cause for
criminal contempt against some administration
officials. What's that about? It relates to deportations
to El Salvador, specifically allegedly ignoring
a court order, could mean fines, maybe even jail
time and, you know, a potential constitutional
crisis brewing. And that connects to Senator
Van Hollen's trip there trying to get someone
released. Seems like it. Kilmar Abrego Garcia.
Van Hollen went down there, couldn't meet with
President Bukele. but met the vice president.
And the VP apparently suggested Trump was paying
El Salvador to keep detaining the guy. That's
the report. The big question is whether the administration
is defying a Supreme Court order to facilitate
his release. That could be huge, potentially
even impeachment fodder down the line. Meanwhile,
Trump's also putting pressure on law firms. Yeah,
the report mentions he's pushing firms that agreed
to do some pro bono work to take on much more.
Maybe indefinitely. And lawyers are calling it
indentured servitude. That's the phrase used,
raises questions about whether firms might challenge
him legally, especially if he tries to bar non
-compliant firms from courtrooms via executive
orders, which is apparently being floated. Then
there's the Harvard situation, revoking tax exempt
status. Reportedly, yes. Trump apparently ordered
the IRS to do it, likely linked to student demonstrations.
That would be. Massive. For Harvard and potentially
other universities if they don't toe the line.
Like, appointing professors he wants. That's
the implication raised. It sets up a huge potential
legal fight and raises serious questions about
academic freedom and political interference.
And it makes you wonder if those law firms he's
pressuring would even be able to oppose Harvard
in court. Good point. It gets complicated quickly.
The nomination for U .S. Attorney for D .C. is
also causing fireworks. Ed Martin. Major controversy
there. He apparently failed to disclose around
150 appearances on Russian state TV. Promoting
pro -Russia, anti -America views. That's the
allegation. Combined with limited experience
and other undisclosed stuff, it's raised serious
red flags. The Senate Judiciary Committee has
tons of questions, and Senator Schiff put a hold
on the nomination. But the administration isn't
winning everything. There was a ruling against
them on spending. Correct. A judge in Rhode Island
ruled against Trump's move to freeze funds appropriated
by Congress, citing the Empowerment Control Act
of 1974. Which protects Congress's power of the
purse. Exactly. And it's a nationwide ruling
potentially freeing up billions in grants for
agencies like agriculture, energy, EPA, housing,
funds from the Inflation Reduction Act and other
Biden era laws. Shifting focus slightly, the
Democrats seem to have a new line of attack on
Republicans. Yeah, they're hitting hard on alleged
insider stock trading. focusing on rep Marjorie
Taylor Greene's trades after something called
Liberation Day. And pushing for a ban on members
of Congress owning individual stocks. That's
the push. Trying to frame it as a corruption
issue they think will resonate. Okay. An interesting
side note in the report was about trade in education.
Yeah, apparently the U .S. runs a huge trade
surplus in education. Foreign students bring
in more revenue than natural gas and coal exports
combined. Really? That's significant. It is.
And the report warns that limiting foreign student
enrollment could hurt universities financially
and also diminish U .S. soft power globally.
And speaking of tech and government, Elon Musk
made a move at the Pentagon. Yes. He reportedly
eliminated the Defense Digital Service, the DDS.
That was the unit meant to bring Silicon Valley
type tech talent into the DOD. And that's controversial.
Yeah, former senior defense officials are criticizing
it, saying the Pentagon is losing valuable tech
expertise. Meanwhile, former President Biden
is weighing in, particularly on Social Security.
He's been very critical, accusing the Trump administration
of taking a hatchet to the program, warning about
privatization and benefit cuts. A classic political
battleground. Definitely. The White House response
was reportedly dismissive. Looking even further
ahead, the report suggests trade could be a major
fight within the Republican Party for 2028. Seems
likely. You've got potential candidates like
Ted Cruz and Nikki Haley, whose states rely on
exports, likely leaning anti -tariff. Versus
pro -tariff figures like JD Vance and Steve Bannon.
Exactly. And then there's Ron DeSantis, who's
apparently been quiet on it so far, could be
a major dividing line in the primaries. Finally,
there was the Tom Friedman interview about Trump
and China. What were his main concerns? Friedman
sounds deeply worried. He argues Trump has an
outdated view of China, not grasping their huge
leaps in tech like AI and dark factories. And
that Trump lacks a strategy for U .S. competitiveness.
defunding research, dismissing EVs. That's Friedman's
take. He warns it has serious implications for
U .S. economic and military strength long -term.
He sounds profoundly concerned. Wow. Okay, so
putting it all together, the economic jitters
seen in gold and the dollar. the market fragility,
set against this backdrop of intense political
battles, legal challenges, and these long -term
questions about competition with China. It's
a very complex picture. The economic anxiety
might be feeding off the political uncertainty
and vice versa. That China trade shift we talked
about earlier, you could almost see it as China
reacting to or anticipating some of the political
instability and rhetoric coming out of the US,
deciding to shore up relationships elsewhere.
That makes sense. It all feels interconnected.
So for everyone listening, thinking about all
these threats, the market signals, the political
drama, the global shifts. What do you think are
the biggest risks or maybe even opportunities
emerging from this? Yeah, what further questions
does this snapshot from April 17th raise for
you about where things might be headed? Definitely
a lot to chew on. We hope this deep dive helped
connect some dots. We do. Thanks for tuning in.
That's it for us today. Thanks for joining the
deep dive.