Did Liberation Day not happen or are we missing something?
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Welcome to the Saxo Market Call. Before we get started, it's important we emphasize that the views and opinions expressed in this podcast are those of the host and guests and do not constitute investment advice or recommendations. All information provided is for educational and entertainment purposes only. Okay, it is Wednesday, 30th of April, 2025, a week since our last podcast, and we've really seen a week where things have

calm down quite a bit as we're going back and forth on where the tariff negotiations are headed and as i put on the intro in today's slide deck and you can find the slide deck link in the podcast description for today's episode as always um and i may call this podcast by this title as well it's like so uh liberation day apparently didn't uh and won't happen

because we're essentially back at the levels we were at just ahead of the Liberation Day announcements. Let's remember there are a lot of tariffs in effect, especially those against China. Yes, we've seen a bit of news flow back and forth. Carving out exceptions were some key ones from China for basically the U.S. administration doing these measures. For example, yesterday's non-stacking of auto tariffs.

stacking, meaning not adding them additionally to the baseline tariffs, but if it is an auto tariff, it is replacing whatever the original tariff was, this kind of move. It's just a move towards avoiding self-harm in some key areas in the near term. And according to some sources, some of these will be limited in time only anyway. So

It's an avoidance of self-harm. We still have the direction of travel, as we called it, I think, in the last podcast. And it's just interesting to see how much we've rebounded in risk sentiment. There still are going to be tremendous tariff impacts, and there are some of these ongoing, certainly in sentiment. And so we have to wonder where is the market going to pick up on this threat again, if it does, and that is our assumption. So let's look at a couple of technical levels in the U.S. equity market.

I put a NASDAQ 100 cash index chart on slide two there. And arguably that 19,100 or so area that we flagged as a key resistance area on the way up, which kind of blew right through that.

And we have a couple of other areas here, but I think really the key sort of existential for the bears, at least, resistance for this move higher is going to be something like 20,000, psychologically certain, certainly. And then you have the 61.8 retracement just above that. And somewhat interestingly, we've always flagged the 200-day moving average for the NASDAQ 100 as really critical here. And that's sort of edging down towards the same area here.

And now we're only some 500 points away from that. So, you know, two, two point something percent away from that ultimate resistance. So looking for a turn lower, still remaining somewhat bearish here.

for the outlook unless we get a complete melt away of the whole tariff threat and we have the Fed cutting rates and all these types of new developments that are certainly not anticipated to change the narrative. The narrative is what it is, but it feels like a lot of people have positioned for that and that is this end of U.S. exceptionalism narrative and I'll talk a bit more about that in the currency market when I get to that slide. But sort of running through some more of the news and we're seeing

There was a Wall Street Journal article, I think you're privy to it as a Saxo client on the platform as well, talking about the widening number of companies that are refusing to provide any guidance because of the unknown impact these tariffs are going to have. Sort of on ground level actual spending, however, if we're to believe Visa and its earnings report was very strong, not just on the numbers, which may have been currency affected given the weaker dollar.

And a lot of their businesses outside the U.S., their actual numbers of volume of transactions and all other metrics looking good except for their profitability was down slightly. So certainly nothing to detect in actual spending right now. There was also an interesting news item on Amazon.com. I'm not sure if Amazon.com actually – the sources –

The article source or who it was that said Amazon.com was planning on indicating basically the impact on new prices from the tariff. So making it transparent to the customer what percentage was being paid in tariff relative to the underlying price. In any case, this was deemed by the U.S. White House press secretary wrong.

Levitt as, quote, a hostile and political act, prompting Amazon.com to come out explicitly and say, we're not planning on doing that. So just to show how quickly these companies will step down to avoid getting into hot political water. We have Amazon.com, by the way, reporting after they close tomorrow. And I've got an overview of some of the key earnings as we are entering really the meat of earnings season today and tomorrow and through the next few days as well.

All right, some other news items as indicated here Monday. So of course we get the Canadian election on Monday and a new yet another liberal minority government. So liberal being Justin Trudeau's former PM, Justin Trudeau's party. He suffered under minority governments since 2019. Tried to sense that his popularity was rising back in, I believe it was 2021.

and called a snap election there. That kind of backfired because it resulted in the same thing. And now we have another liberal minority government. And really the surge in the liberals' chances at this election

When previously the Conservative Party was polling with far greater lead in the polls was, of course, Trump posturing on Canada being the 51st state. And so Canadians, you know, associating the Liberal Party with this anti-Trump, anti-U.S. sentiment, which is pretty deep and a patriotic vein that was tapped there. But if we look at what Carney is signaling, new Liberal leader Carney,

It is a sort of Canadian independent stance, and we're going to sort of decouple our economy from the U.S. and start relying more on opening up our economy to Europe and to Asia. I just do not think this is going to play in this new era of great power politics anymore.

And I just wonder how this is going to shape up. And I don't think it will be in a good fashion. I don't know what that's going to look like. Right now, we'll start to put some analysis on that, what it can mean for Canadian companies, maybe Canadian banks, which could be one angle of attack from the Trump administration as they are extremely protected by Canadian law. But one thing really to point out that I think is extremely interesting as a potential wedge issue here is

So Alberta is the Canadian province with the strongest economy per capita. It's not by any means the largest province by population, which is Ontario.

But Alberta is also the location of much of Canada's natural resources, especially in oil and I assume gas as well. And they sort of long suffered under their potential, economic potential has suffered under a federal policy, a federal Canadian policy of limiting heavy regulation and limiting fossil fuel output, et cetera. So they've been sort of –

suffering for a long time under liberal governments and they feel that they're being held back. And so it's very interesting that the premier of Alberta, the province, Danielle, what's her name? Danielle Smith on the same day, pretty much as the election, or maybe it was yesterday, uh,

coming out with a measure to allow a referendum to be held on independence from Canada for the province if a petition could gather. I've seen a couple of different estimates. One of them was 170-something thousand and another was just over 200,000. But a number of signatures that it's possible, given the population of Alberta, to raise and a referendum could be held. Now, I haven't seen any polls on how well that referendum would do,

But I can't help but think that a Trump administration would be extremely aggressive in recognizing Alberta's independence as a sovereign nation if it were to vote in favor of independence. And talk about a wedge issue there for an existential issue for the future of Canada. That would be an interesting one. All speculation on my part here. I just think it's very interesting development, something we need to track here. And certainly the overall U.S.-Canada relationship

trade relationship and political relationship bears tracking. U.S. will find it unacceptable that Canada is going with its new, what Michael Every calls grand macro strategy, its economic statecraft becoming a new tool, getting a new level of importance for the U.S. as it is carving a new path in the world, that Canada sort of wanders off and goes its own way.

sets up some kind of relationship with China that is not aligned with U.S. priorities, et cetera. I just don't see it being possible. So let's see how this shapes up. I don't want to spend too much time on that.

And then we have the Spain-Portugal debacle with energy. I think really the death knell of the growth path for renewables, a lesson in the fragility of these heavily renewable reliant grids. I've got a good link to follow some of the technological reasons why this breakdown happened.

And blackout likely happened. It's something called inertia, something that old-fashioned electrical grids tend to have with generators that are sort of mechanically have inertia and are able to continue to generate electricity even as the power is interrupted for brief periods and reasonably long periods, actually, in terms of the instantaneous relative to the instantaneous needs of power. And renewable grids do not have that so-called inertia. So

And interesting timing-wise to see something like, for example, in the UK, former Prime Minister Blair, of course, of the Labour Party coming out and directly criticizing the idea that net zero is going to work when you have Ed Miliband, the current UK Energy Secretary, still banging on about these ideas.

These climate initiatives, and it's really becoming something where there is no political party soon, I think, that will defend these in a significant way. This idea that the UK is somehow going to be net at net zero or neutral in any sort of foreseeable time frame.

So, interesting to see those last breaks falling there, but I think this is just an interesting further warning and accelerator on this front against the whole climate and green initiatives and the renewables as currently understood. Now, it's important to think, you know, what does that mean for the long-term future? It could mean, of course, the rise of nuclear as actually the real clean power that has a chance.

Other random news items, Trump again criticizing Powell. This is not terribly significant really given that he said he is not going to fire him, but bringing fresh pressure to bear on him in any case. And then we have gold. So gold is correcting. I think it's really just important to flag here.

We have Asian market, or at least China, closed Thursday through Monday. And ahead of that holiday, we have somewhat of a shift in the pattern of how gold has been tending to rally in the Asian session. It is buying out of China and at least Asia as well that is seen as the key driver of this entire last huge leg in gold's appreciation.

And then you would see tendencies selling in the sort of North American futures session, for example, or at least in other hours. And we have Asia out on holiday, and we've seen a similar shift in this pattern even before this holiday. So if gold has a chance to those that are waiting to buy a dip or find a dip to buy into, it would seem that the odds of a dip have increased here. We already have seen a dip, but some levels to watch out for.

If the selling pressure continues and it might do so with the lack of buying hands potentially, again, Thursday through Monday this holiday, we have levels like the recent minor low in this period of consolidation at 3,260. But the really big one is 3,165. And then I think you have to go all the way down to the psychological level that was not really sticky for that long, but it still has been traditionally sticky, these big round levels.

and that would be the $3,000 level. But otherwise, I think markets are still very much in wait and see mode. We have the idea that the U.S. has thrown the ball into China's court. China, you have to de-escalate before we do or before we'll even consider going to the negotiation table. We're waiting for what the first trade deals might look like. India is supposedly the first in line there, and we could see an announcement here quite soon. We also have these –

It's concerning, but how concerning? I have no idea. Pakistan indicating that India is threatening some kind of potential border incursion in the next 24 to 36 hours. That message is already maybe 12 hours old, by the way, or at least six to eight hours old.

Here we are speaking around lunchtime in Europe. So plenty of things to watch, even as we're sort of in consolidation and flat. We also have incoming key earnings, as you see roll forward there on slide three. It's Microsoft and Meta today. Plenty of AI focus there. Microsoft, again, on the data center side of things and the cloud side of things, how much this investment is continuing to expand to absorb the demand from various companies.

players in the market to consume AI resources at the data center level to develop applications, et cetera, and meta platforms more on the developing the applications side of thing and running AI programs to more highly target ads to get higher hit rates and therefore be able to charge more for its services, et cetera. So plenty to watch for there and so many other companies reporting

On the more sort of physical level of the economy, Caterpillar has been a suffering company for some time. What is their outlook as for earth moving and other equipment? It has seen a big hole blown in its business in recent years from the wind down in the Chinese real estate sector. But you can see the full overview there on slide three. We also have at least one

Semiconductor name there, KLA 10 core reporting today. On the auto front, we had Mercedes-Benz out reporting this morning. Yum! Brands out in the U.S. McDonald's tomorrow. So maybe there's an angle there on, who knows, the weight loss drugs, et cetera. By the way, Novo in Denmark's Novo, which is down something like 65%, I think, at the worst of its recent lows from its top.

announcing a deal with this HIMS and HERS. I don't know how to characterize that company on offering cheap GLP-1 drugs to more people, basically, through their network and their setup. And that's an interesting move. So it could be good business, of course, if it broadens their business, but it sounds like it's more of a discount type of operation.

I wonder about the margins. And of course, they're making huge investments in further expanding their production. And in the meantime, we have Eli Lilly, the direct competitor on these obesity drugs, out reporting tomorrow.

And are seen as somewhat the leader there on their – both the current one, as far as I know, the effectiveness is very slightly more but slightly better. And then potentially their pipeline looking a little bit better further out, though I'm not 100% sure about that. But what Eli Lilly is indicating in terms of momentum and relative momentum, and then there's the concern in the U.S.,

Where Nova has an awful lot of its business, even though they produce a lot there, that tariffs could impact their business into the U.S. because pharmaceuticals have been identified as a key area of tariffs as well. And then we have tomorrow with Apple and Amazon.com reporting. Amazon.com, very, very interesting just across the board on the whole AI side of things as the largest cloud provider.

out there, but also, of course, in the retail business as I'm forgetting the number, if it was 71% or thereabouts, Google it yourself, but a huge percentage of their items shipped through their

Amazon.com retail business coming out of China. So that's a critical one. And then Apple really on, of course, the production front where there's been a huge shift in its focus saying that it wants to move its production to India, which means that that India trade deal, what does that look like, looks critical for Apple as well if they are intending to move more of their production to China.

to India from China, but how they're positioning what's going on from a both maybe an in market in China. So how is our Apple's products selling in China, a key market there, but as well, it's how this is seen impacting their margins, this big shift, how expensive this will be and whether they're going to hedge their bets potential with more US bound investment, which is possibly more

Not possibly. It's going to be much more expensive. There was a great FT long read, by the way, the other day if you want to look it up and if you have access to FT material on the complexity of the iPhone supply chain, just staggering the number of parts, the number of subsuppliers. We're talking 170 or 180-something subsuppliers and just the intricacies of that as well as the actual assemblage of the device.

So plenty to look at in the coming days on earnings. Shifting forward to FX on slide four, we see this continued pattern of the U.S. dollar and the Chinese renminbi sort of following each other directionally in terms of being weak against the rest of the market.

And when the Chinese renminbi does manage to strengthen a bit against the U.S. dollar, it's in a context of the dollar also sort of coming back a little bit. So you're just seeing this. They're still joined at the hip more or less until proven otherwise. So dollar C and H is really not worth paying attention to.

It did supposedly register a new sort of tipping over into our models registry of a downtrend, but the chart level of note is more like 7.22 on dollar renminbi or offshore renminbi.

And we have the euro versus the Norwegian krona that suffered that huge markup on the Norwegian krona down, the euro up, when we saw the big disruption in global risk sentiment and oil prices started to collapse. I think it's a pretty impressive show for the Norwegian krona.

rallying as much as it is versus the euro here when we have crude oil prices lurching into a fresh and ugly sell-off. So technically, the oil situation looking quite ugly. As we've discussed before, however, below these prices, you're starting to see supply destruction pretty rapidly, presumably, in the U.S. shale patch, particularly when the whole forward curve is more or less at current prices. We're not in contango or anything, meaning that even if you do sell forward as a

As an oil producer, you're selling forward at more or less current prices or even slightly lower, in fact. One currency pair with maybe quite an interesting technical setup, as I put there on slide five, is Urien. So this is the Japanese favorite, the Ichimoku chart.

for this pair on a weekly basis. And the interesting thing here being that weekly cloud level where we twice found resistance, you know, very, very precisely there just above 164. I think the number is what 164 27. In fact, currently, that's the flatline resistance level, the top of that so called cloud, which is the sort of shaded area.

And really to get the next downside sort of confirmation trend-wise, theoretically we are in a downtrend as long as we're below that cloud there. But the bigger sort of trigger would be this lagging span. So the green line, I won't go into how that's calculated. You can look it up on Wikipedia, the Ichimoku Technical Analysis System.

And would be so that green line, the thick green line there moving and penetrating below the cloud, which it has not yet done for a very long time, at least stretching back to, you know, before the beginning of this chart, which goes back to early 2021. So that would be quite a psychological or sort of a technical trend shift if we were to see that breaking through. So arguably you need to see a weaker close below 160.

and for that lagging span to get through the cloud. That would just about do it probably for both of those indicators. Now, one thing also perhaps holding this market up in sort of a bigger picture is the status of the U.S. economy. There's so many opinions on where this is headed. We have some of the manufacturing, regional manufacturing surveys turning very ugly. The Dallas one was horrific, in fact, minus 30-something percent.

And we have the ISA manufacturing up tomorrow. This is generally not a market-moving PMI because of the lack of importance of the manufacturing sector to the U.S. economy. However, it's just an interesting one to track, and this is, of course, the latest jobs data. And on that note, we have the ADP employment change up today, and we have the nonfarm payrolls change and unemployment rate up on Friday.

Hard to tell if these sort of lagging employment considering kind of a lagging indicator on the economy. We do have expectations for these to dip again. So ADP at plus 115 K is the expectation for today and NFPs at plus 135 K on Friday. But given that liberation day so-called was in early April,

We've had a lot of activity heading into April on front-running tariffs, as was seen in a just incredible record of the advanced trade balance in the U.S., clear signs of front-running of tariffs. Is it not until May or June, if we are going to get

weakening U.S. economy that we start to see this crystallizing more in the data. Don't know. We need to track it, of course, about those are the key figures on the economy as we're also looking at key earnings reports for market direction this week. And we have the FOMC meeting next week.

as well. Interesting to see how they're dealing with the mixed signals in the economy and the, of course, the uncertainty around impact of trade policies. When we actually don't know what these trade policies are going to look like, as the Wall Street Journal looks at these countries negotiating on a bilateral basis with the U.S. one by one, or in batches of, what was it, six for every week through this 90-day period. So it's really going to be

extrapolations, what does this look like? It's not just about the tariff level, it's about poking into the

what these other economies are doing that the U S sees as disadvantaging them. So it could be things like access for agricultural products into Europe. When you have the U S producing all kinds of GMO grains, for example, and other, other agricultural products, hormone fed beef for different standards on, on meat. I think there's one thing about chlorine washing the chicken, which is not done in other places. So,

There are all kinds of different levels that these trade negotiations will operate on. And one of the existential ones for how geopolitics shapes up is this angle on the degree to which the U.S. tries to establish and see its agenda on China reflected in other countries. That's a given, I think, in the long term for Mexico and Canada. And Mexico has already sort of flagged that it is willing to go that direction, but

I think they will have to be sort of disciplined into place, if you will, from the U.S. perspective at least. I'm not trying to speak in favor of that. I'm just speaking in support of the direction I think it's headed. So these questions are looming and will need to be answered before we can really understand where this is all headed. If we look at the key reads for today, and if you don't want to listen to me anymore, I think you can just click straight into some of these. I think some of these are very good questions.

reading for an education and just thought provoking. The root cause again of the Spanish Portuguese network failure, electricity network failure, interesting thread there on X, fascinating stuff that I didn't know about this whole inertia side of things. And then the Canadian Alberta province and the ability to a new law, making it possible to hold a referendum on independence if there are enough petition signatures and

For a long listen, you've got Santiago Capital's Brent Johnson on the Thoughtful Money podcast talking about can China defeat America in the trade war. And he's pretty much an apologist for the Trump administration approach. And when I say apologist, I don't want to indicate that he's speaking too much in support of it, but he's good at explaining the rationale behind it and some of the method and the madness. And I think it's well worth a listen on Twitter.

you know, the key issues that are at the root of everything here and why I don't think we are just headed towards some simple melting away of all these uncertainties. Yes, we can delay tariffs. We can punt the worst of the impacts of them over the horizon, but the shape of the U S China rivalry is pretty clearly etched into the geopolitical backdrop here. And the fault lines are very stark for many nations, whether it's Canada, whether it's Australia, uh, uh,

in the case of Australia, economically so aligned on China for its exports, and yet its traditional security alliance is very much aligned with the US. And then if you really want to go down a shipping rabbit hole, something I have not bothered to do much in the past, and I'm staggered at how much data is available and the granularity of that data, you can follow that YouTube link there

There's a guy discussing some of the trade, you know, the level of activity at ports, that some of the reports of things being in a total standstill are over or exaggerated. And that things like container ships are still leaving China for the U.S. right now. They may be a bit lightly loaded, as the picture I included there shows.

from this guy's YouTube video indicates, but that this trade is ongoing even with actual on the ground 145% tariffs. All right, I will wrap this one for today. I actually ended up talking way more than I anticipated. We will have more guests, of course, on the future. It won't be just me going on by myself.

And every podcast, but I did felt like I needed to check in this week after a couple of days off over the weekend or before and after the weekend. And yeah, that'll do it for today. Do tune in soon for the next Saxo market call. Thanks for joining.