It seems things are pretty clear. Since Trump arrived, the markets have become completely unmanageable. Between uncertainty, the implementation of tariffs, and flip-flopping on tariffs in all directions. So much so that no one is really clear anymore on who’s paying what, for how long, and until when. Since the end of January, it’s been total chaos, and we’ve been victims of completely ridiculous volatility while being forced to invest blindly. But what we’ve been experiencing for the past two weeks — now that’s hitting a level of absurdity rarely seen in the markets. It’s not even about volatility anymore — the markets have become erratic…
Highlights
If you want a very quick summary of what happened yesterday and where we are this morning, I’d be inclined to tell you that you could take word for word what we said yesterday morning — and say THE EXACT OPPOSITE! I must say, it’s really not easy to stay calm and rational in this market environment, which feels like being locked in an insane asylum where everyone is allowed to say anything and everything — and also EVERYTHING AND ITS OPPOSITE! And meanwhile, we’re expected to make investment decisions with all the necessary perspective and analysis AND come up with intelligent things to say…
Clearly, this morning we’ve reached levels of “NONSENSE” that don’t mean anything anymore. If we try to put things in context and take a step back — we’ll remember that yesterday morning, at the same time, the markets, the media, the Wall Street strategists, and the visionaries of the finance world were all biting their nails, on the verge of the economic panic that Trump seemed to be dragging us into while spitting in the face of the Chinese and — at the same time — inventing words and insults to explain to Wall Street what he thought of Jerome Powell: basically, he imagined Powell being thrown out of the Fed after being tarred and feathered, while the White House would appoint the most unqualified person possible to lead the Fed — as long as they were obedient and eager to cut rates any which way, but especially very, very fast.
Anxiety, flip-flopping, and artistic U-turns
In this nauseating environment at the start of the day, we couldn’t expect miracles. The U.S. markets had spent Easter Monday deeply in the red — for all the reasons we know, especially because of the trade war with China and because Powell was, according to the White House, a loser — and firing Powell could potentially create a bit of uncertainty in financial markets, and right now, UNCERTAINTY was wearing everyone out. I think at the point we were at yesterday morning, words were becoming hard to find to properly describe the level of UNCERTAINTY we were in. Or “ARE” in — right now I don’t even know how to qualify the mental state of the wonderful world of investing — although at first glance, the word BIPOLAR leaps to mind.
Anyway, European markets opened lower while U.S. futures were pointing higher; because you see, after a sharp drop, we can always hope for a rebound. I should note, though, that when Europe opened yesterday morning, China and the U.S. were still throwing dishes at each other and Powell was STILL a loser. Then, as the hours passed and New York’s opening approached, there was talk that “POTENTIALLY” Americans were “a bit” more optimistic than the day before — there was even talk of “optimism around tariff issues,” even though nothing had been officially announced by the White House clowns. On the other hand, we had some quarterly figures that weren’t that bad. L’Oréal, for instance, posted a 3.5% rise with revenue of €11.73 billion and said they outperformed the luxury market. But it was mainly the fact that guidance remained solid and that L’Oréal was doing fairly well in a market context we’ll call “complicated.”
Interpretation
Maybe when we do the markets’ psychological assessment, we need to realize that from now on, we’ll have to focus on interpreting quarterly reports — since we already know that no company is going to publish euphoric guidance and say: “Oh oh oh, 2025 is going to be so easy that we might double our bonuses from 2024 and pay them in advance, champagne for everyone!!!”
No, that’s not going to happen. Quite the opposite. It’ll be XXL victimization mode, with companies whining about how tough things will be and how analysts shouldn’t expect much for 2025 — because maybe they won’t even be able to hold a “Christmas Party” this year and might have to delay it to March 2026… Yes, expect a lot of sob stories in post-earnings calls, all to lower expectations for global companies — because Trump is just too mean. Anyway, L’Oréal did well yesterday, and so did 3M in the U.S. 3M published lousy guidance, but again, everyone’s going to follow the same model — and honestly, I’m not far from thinking that this quarter, ChatGPT will write all the press releases, each one with a whiny tone that’ll make you want to start a GoFundMe campaign for these poor corporations, because Trump is just too mean.
All this to say, the more time passed and the more “not-too-bad” earnings reports came out (L’Oréal gained over 6%, and 3M over 8%), the more we regained some appetite for risk and interest in buying stocks — because, as one late-evening market recap put it: “Markets found a glimmer of optimism in the HOPE of tariff relief…” Honestly, I don’t know where they saw that or how they still believe anything coming out of Washington, but it was, in any case, one of the reasons pushing the indexes up at the end of the day. Not to mention that the White House spokesperson doubled down on Powell, backing her dear President who — according to her — was RIGHT to express his OUTRAGE at Powell, who really is a BIG LOSER. I say “was” because in two paragraphs, that’s going to get interesting.
The wind shifts
Then, as the hours passed, it became clear that Monday’s drop was overdone and even if Powell was a loser, we’d survive — and in fact, what really mattered was that Q1 numbers weren’t all that bad (even though we seem to forget that the full impact of tariffs will mostly hit post-February and we haven’t seen anything yet). No matter: the tone shift between Monday night and Tuesday night in New York was drastic. Things accelerated in the afternoon as several Fed members spoke — names don’t really matter — but what stood out was that they agreed: if tariffs remain as they are and no solution is found, the economy’s going to take a serious hit. Then they all jumped to Powell’s defense, saying he’s NOT a loser and he actually did a “great job” so far. Some comments were so glowing you’d think Powell hadn’t yet processed their 2024 bonuses.
But yesterday, it was mainly Scott Bessent who lit the rocket that sent the S&P 500 up 2.51% and the Nasdaq up 2.71%. In an ultra-secret meeting (that everyone’s already talking about because it was livestreamed for those “more equal than others”), the U.S. Treasury Secretary revealed he expected an “imminent de-escalation” in the trade war with China. Yes, the same trade war started with great fanfare by his boss and which, according to him, can’t go on forever. During a “secret” JP Morgan conference, he admitted that “negotiating with China would be a rocky road.” But: “Don’t worry, peasants,” neither the U.S. nor China believes the status quo is sustainable. In other words, after weeks of posturing, both sides realize this trade war is about as productive as a meeting without coffee or a nightclub party without Red Bull and vodka. In short: the “I tax you, you tax me” strategy has run its course. And now, it’s time for negotiations, compromises, and hopefully a cup of tea shared between Trump and Xi Jinping.
In this context, the session was done. In just a few well-placed and well-worded press releases, Powell was suddenly redeemed and the markets had new hope that the tariff saga might end as just another joke from the White House — which will probably soon release a statement saying, “WHAT??? YOU ACTUALLY BELIEVED THAT…”
They’re all crazy!
Especially since this whole story of bipolar disorder and all kinds of nonsense doesn’t stop there. And yet, I think when you look at what happened yesterday—when you hear what happened yesterday—you’re totally justified in thinking what you’re thinking. But even then, the day wasn’t over because Tesla’s quarterly results were still to come. And if you were hoping to see some awful numbers and a quarter so rotten it felt like Tesla caught COVID, I imagine you got what you came for.
Tesla reported a staggering 20% drop in automotive revenue. The expected earnings per share were 39 cents—it came in at 27. Revenue was expected to be $21.11 billion—it came in at $19.34 billion. Overall revenue fell by 9%. Tesla explained this drop by saying it needed to upgrade the lines at its four vehicle factories to begin building a refreshed version of its popular Model Y SUV. The company also stated that lower average selling prices and sales incentives weighed on revenue and profits. But at no point did they mention that 47% of Americans have a negative view of Tesla—and it’s even worse in other parts of the world. Nor did they bring up the fact that sales are in free fall and Musk’s image has become totally trashed ever since he started spending weekends in Florida at Trump’s mock-up of the Élysée Palace. And of course, no one mentioned even once the ROBO-Taxis supposedly launching in August… For all we know, he’s messing with us again.
To sum it up: if a finance school needed a perfect example of a disastrous earnings report, yesterday’s release would be textbook material. Now you might say: yeah, okay, the numbers are so bad no one even looks at the guidance—but then why is the stock up 5% after hours after already gaining 5% during the session??? Well, once again: BIPOLARITY. Like every time, Elon Musk came on and did his show, and yesterday, no matter what he actually said, what the market, investors, shorts, and hedge funds heard was: “I’m going to spend less time on DOGE by May and focus more on managing Tesla”…
Because in the end, no one cares about the numbers—as long as Musk shows up to work his magic, everything will be fine. It’s really that simple.
If we had to summarize yesterday’s report in a formula, it would be:
Crap numbers + Musk comeback = Happy Ending
So in conclusion, I feel like saying that the market has gone completely stupid—but actually, I think it’s an entire system that’s starting to take us for idiots. I believe that if, in the private sector, an employee did a tenth of what Trump is doing right now, they’d be fired so fast they’d have to change cities—or even leave the country. Honestly, even Netflix wouldn’t dare write such outlandish scripts, for fear of losing all credibility. But in Washington, they do it… and the worst part is—it works.
The rest? What rest? —Because it doesn’t stop there… AND ACTUALLY, this isn’t even the worst of it. Because right now, it’s 6:30 in the morning, I’m wrapping up my column, just about to hit publish, and Trump has just signaled a potential reversal in his trade war with China—he just announced that tariffs on Chinese goods “will be significantly reduced, but not brought to zero.”
For f***’s sake, this is insane. We can’t even keep up anymore with all the crap thrown at us every minute. At this point, I was also supposed to talk to you about oil at $64.20 a barrel, gold at $3,350, Bitcoin finally bouncing back to $93,000, SAP posting great results and even giving decent guidance—they must be selling their stuff on Mars, probably—I was supposed to tell you the IMF slashed its global growth forecasts and expects hard times ahead, we could have talked about credit card companies fearing the worst because debt levels are exploding, and I should have mentioned that today we’re getting earnings from Boeing, AT&T, NextEra, Texas Instruments, and Lam Research—and on the macro side, a flood of manufacturing and composite PMIs and the Beige Book… But honestly: NO ONE CARES, because Trump just said the U.S. is going to be very very nice to China and lower tariffs…
Oh, and by the way: futures are up 1.6% in pre-market.
And as someone once said:
“There are more and more idiots every year. But this year, I feel like next year’s idiots are already here!”
…And I’d add: there’s a whole bunch of them in the White House.
Have a great day—and don’t forget to subscribe to our newsletter if you don’t want to miss the next psychiatric report on the financial markets, Donald Trump, and Tesla shareholders. Alright, see you tomorrow. I’m going back to bed in fetal position and I think I’ll start sucking my thumb again…
Have a lovely day and see you tomorrow!
