Flight to safety
🌍 Macro & Market News
I guess they didn’t fully finish plugging the gas leak in the Oval office, because today started with fresh new tariff threats. Firstly on the European Union (at 50%) and then on Apple (specifically, their iPhones, at 25%). I’m not well versed in Adam Smith, but this doesn’t seem like Capitalism.
As if that wasn’t enough insanity, yesterday our dear leader declared that it would block all internaional students from attending Harvard (which they immediately sued and a judge filed a restraining order). Unclear how trying to kneecap America’s most prestigeous university will help mAkE AmeRiCA gREaT AGaiN when all that research decides their time is better spent in more research friendly nations - like China.
While all this chaos may make for good television (which is probably the point), 10 year treasury yields are now above 4.5% (sometimes hitting 4.6%) and the US Dollar continues to slide.
It’s just incoherent. It’s just chaos. But it’s still predictable. Trump blustered about something, did something dramatic, the market retracted, he will cower in a week and reverse course, the market will rise. Repeat. Ad naseum. Ad astra. And all this will do will continue to make America look like a unserious place.
📊 Portfolio Impact
The portfolio actually grew by 0.40%, largely driven by GLD (+2.19%) and my Indian ETFs (SMIN up 1.79% and INDA up 1.47%). What dragged my portfolio down was the general decline in the US Markets (VOO -0.68%) and specifically semiconductors (SOXX -1.55%).
Okay so what happened exactly?
The flight to GLD makes sense. But what about India? I woke up today with Trump’s threats against Apple’s iPhone production in India, which sank Apple, however my Indian ETFs increased.
SMIN aims to track to the performance of the MSCI India Small Cap Index. INDA is similar but for large-cap. Paired together and you have broad exposure to India’s market. Today, India’s markets reflected easing US Treasury yields. The expectation is that the Reserve Bank of India will cut the policy rate on June 6th, which should drive Indian growth. This is a “pre-emptive” move by investors. That plus yields dropping made international investors look to India for better returns.
On the other hand, SOXX’s decline was driven by Trump’s declaration, which eats into the international supply chains of semiconductor companies.
Sometimes think I should sell America and hang on.
📈 Predictions for 2025-05-27
I’ve no clue, but Powell has a speech at Princeton that probably will tank the market.
✅ Review from Yesterday
None made