First Rule – No Rules

Yesterday’s session was one that basically served no purpose — none at all if you look at the fact that the indexes barely moved. Which, frankly, is a change compared to what we lived through during the first 100 days of Donald Trump. Honestly, it seems like investors are “almost happy” that nothing is happening, simply because they’re exhausted by the heavy uncertainty of recent months. We’re like the guy falling from a 150-story building who, as he passes each floor, keeps saying: “So far, so good.” To keep it simple: as long as Trump doesn’t mess things up with some new drama, we can manage what we know We allow ourselves to thinkWe can handle what we know — even if what we know isn’t much, since the promises around the talks with China are totally vague. Trump recently said he spoke with Xi Jinping, but according to official Chinese sources, Trump’s statements are complete nonsense. Then again, we all know how much trust to place in a politician who says “I’m not aware of anything” (ask Bayrou). But when a Chinese politician says “I’m not aware of anything”, it’s even worse. That said, even though we know “officially nothing was discussed”, we all know that doesn’t mean “nothing was actually discussed.” As my philosophical master Coluche once said:“Those in authorized circles allow themselves to believe that a secret agreement MIGHT be made.”And he added:“First off, you and I are not part of those ‘authorized circles.’ Then there’s the secret agreement — which clearly means we’ll never know anything about it. And finally, there’s the conditional tense: MIGHT — so it’s not even certain!” Even though that comedy bit is nearly 50 years old, it hasn’t aged a day. We don’t know what’s actually going on — and for all we know, the deal on tariffs between China and the U.S. might already be signed, and they’re just waiting for the right moment to announce it. That could also be the reason nobody dares to sell the market anymore. Well… we also don’t dare to buy it either, because we have no idea what’s coming in the next four days. And SURPRISE — it all starts today… The Kind of Paralysis That Feels Good Let me return to my guy falling from the 150th floor. I’m insisting on this because the similarities are just too perfect not to mention. You see, when you fall from a building, it’s not the fall that hurts — it’s the landing. While you’re falling, there’s no pain. You could even do stuff — like read a book. Not War and Peace — that might be a bit long — but you could get through the first chapter. What really hurts is going from 230 kilometers per hour to a dead stop. And, yeah, the concrete hurts too. But mostly the hitting-it-at-230 part. Well, that’s where we are: still in free fall. We’re just hoping that, by some stroke of luck, firefighters will have placed one of those giant inflatable cushions like in the movies — and that everything will be fine. We are exactly there. Global markets have bounced back since Trump — after causing panic — started playing it cool again: He stopped attacking Powell He showed a softer, more diplomatic tone with China As of yesterday, he seems more flexible on car tariffs And we know the 90-day moratorium (a bit less now, maybe 70 days left if my math’s right) is only meant to bring countries to the negotiating table and wrap things up with a Hollywood happy ending three days before the deadline… The markets have recovered, and everything should be fine. Except that now, we’re heading into a week from hell, and no one has the guts to take a single bet right before an avalanche of economic data and earnings reports. So you can understand why the Dow Jones didn’t move much yesterday — up 0.28%. The S&P 500 showed even less motivation with a 0.06% gain, and the Nasdaq did worse, dropping 0.10%. In Europe, things weren’t any better: France rose 0.5%, the DAX was sluggish at +0.13%, and our good old SMI stood out from the rest of the world with a 0.72% gain. As one “expert” said last night: “We are in a climate of cautious optimism, despite the uncertainty surrounding U.S. trade policy and its effects on the global economy.” Yeah, I know, that doesn’t mean much — but “cautious optimism” still sounds better than “panic pessimism.” So, if we take a bit of distance from what happened yesterday — which was somewhere between almost nothing and absolutely nothing — the feeling is that the market is slowly rebuilding a sense of stability and calm, trying hard to forget that volatility can still spike 85% faster than you can say: “Lehman Brothers just went bankrupt.” Would you like a summarized version of this for quick sharing or publication?   Let’s Not Get Carried Away Even though the indices were in the light green zone yesterday with a level of frustration close to the maximum – and yet nobody seemed scared – I believe we shouldn’t get too carried away and must keep our heads cool. Let’s try to take stock before the avalanche of data – consumer confidence, JOLTS, GDP, PCE, employment figures – all topped off with quarterly reports from part of the Magnificent Seven, crashes down on us. Right now, it’s a bit like trying to play Jenga without shaking and without pulling out the one block that brings the whole tower down. Here’s where we stand: the talks are dragging on and the economic bill is coming due – you can tell some Americans are starting to clench and are genuinely scared to go shopping. For now, voices like Scott Bessent’s are whispering in Trump’s ear, telling him to stay calm. The problem is, that may not last. Trump is as patient as a hungry Labrador, and it wouldn’t

Hold My Beer, Wall Street

The week ahead is likely to be spectacular once again. And even if it turns out to be less volatile than usual — if by any chance it’s less volatile than usual — there will still be an avalanche of events for us to digest. As always, we’ll be talking about “trade deals” based on whatever information the White House decides to give us. But on top of that, we’ll have to deal with a mountain of quarterly earnings reports from major names like Apple, Microsoft, Amazon, and Meta leading the charge. Not to mention the perfect combo of PCE, GDP, ISM numbers, and even employment data. By next Monday, we might even be looking at the Fed with a whole new perspective. A Very Quiet Trump I’ll admit, I don’t keep official statistics, but it feels like this Monday morning is the first calm Monday since Trump returned to power. A very relative calm, since futures are still down 0.6% because everyone’s “stressed” about the week ahead and it’s tempting to reduce risk with so many deadlines looming.However, it’s worth noting one thing: Trump didn’t drop any bombshells over the weekend, and the main topic on his side remains tariffs with China. The President hinted that he had been in contact with Xi Jinping, but Scott Bessent stated that he “didn’t know” whether Trump had actually spoken with his Chinese counterpart. Basically, we’re being fed little treats to make us believe crazy things are happening in the tariff negotiations, but at the same time, since neither Trump nor China confirms any talks, you get the feeling they’re just stringing us along. In any case, Trump was quieter than usual this weekend, even if plenty must have been discussed during the Pope’s funeral in Rome. One thing’s certain — according to Bessent again — several countries are in talks with the U.S. to find a way out of the tariff situation, and several announcements could be made this week.That’s just perfect, because we really didn’t have much to deal with these next few days, and if, on top of Apple, Microsoft, and friends’ earnings, we also get a few signed agreements between the U.S. and Vietnam or New Zealand, it’ll spice things up a bit.And who knows — maybe Trump will pull off a miracle with China using his left hand while solving the Ukraine war with his right. The Fed and Supply Chains Besides everything we need to analyze this week, there are two more things we should keep an eye on.First, the supply chain issue. Over the past few hours, we’ve started hearing from some U.S. business leaders who are getting worried about what’s coming. As long as no agreement is reached with China, goods can no longer be imported from there, and some experts estimate that if no deal is struck by mid-May, we could face massive stock shortages on certain Chinese products.Just last week, several container ships didn’t set sail because of prohibitive tariffs (Chinese cargo shipments to the U.S. have plunged 60%).For now, there’s no immediate fire, but this could become an obsessive topic in the days ahead. Not to be underestimated. Because if we end up with a “COVID, season 2” kind of vibe in stores — with shortages, layoffs in transportation, logistics, and retail — it’s going to look like Black Friday… without anything to sell.And we’re already almost in May, so there’s no time to waste. Also, if you remember last week, there was talk of Powell possibly getting ousted from the Fed. Things settled at the last minute, but in that political-fiction scenario, Kevin Warsh was imagined as the new Caliph in place of the Caliph.Well, guess what — Warsh spoke this weekend, and he seems very angry with Powell.We don’t know if it’s frustration from not getting the job or if he’s keeping pressure on the Fed at Trump’s request, but his speech was relatively “violent.”According to Warsh, the Fed talks way too much, meddles in everything, and is far too cozy with politicians who are draining the U.S. Treasury. In short, Warsh wants to bring the Fed back to the old-school style: “Shut up, do your job, protect the dollar’s value, and stop acting like a superhero.” Back in the day, Fed bosses (Paul Volcker, Alan Blinder, & Co.) used to smoke cigars to avoid answering questions and refused to talk economics with journalists. Today, between press conferences, 2% inflation targets, and detailed economic forecasts, it’s become Disneyland in the Fed’s hallways and on CNBC.For Warsh, that’s unacceptable.He thinks Bernanke, Yellen, and Powell turned the Fed into a public debate club, and that this overexposure is partly why inflation spun out of control like a runaway barbecue after COVID.He also blames Powell for letting public deficits run wild: “Okay to help during the pandemic, but afterwards, the tap should have been turned off — not organize a budgetary rave party.”Warsh’s conclusion: the Fed shot itself in the foot, and it’s time for a strategic reset — no frills, no standing ovations, and no telling life stories on TV every two weeks.He didn’t even give his opinion on rates or inflation — because, true to his philosophy, he believes the Fed shouldn’t be announcing its plans at all. The Week Ahead As I mentioned at the beginning of this column, beyond Trump’s antics around the world, we’re facing a very busy week in terms of economic data.Nothing surprising for a typical earnings season.But since we’re not in typical times, we’re going to have to ask ourselves a few questions because depending on what comes out, we might quickly have to revise our expectations about “what the Fed will do” — especially since the Fed meets next week. Anyway, just looking at the economic calendar and using a little imagination, we could easily spin up a political-economic fiction scenario. Let’s just take things step by step.It all starts Tuesday.We’ll get the JOLTS report and Consumer Confidence numbers.It wouldn’t be surprising

Free Entrance

On April 30, Donald Trump will celebrate his 100th day in the White House. The first assessments are starting to come out, and there’s a lot of talk about the number of Executive Orders he has signed — currently sitting at 137 — and that’s clearly better than his predecessors. However, what really matters to us as investors is that the President has created an unprecedented mess in the global stock markets. Things seem to be settling a bit in the last few days, and the rebound is, for now, SPECTACULAR. But confidence has been replaced by doubt, and we’re still walking on eggshells. Even if markets are regaining some color, caution is still the order of the day. Surgical precisionIt’s never easy to know “why the market goes up or why the market goes down.” Sometimes it’s due to minor things, sometimes it’s very clear and obvious — but right now, since nothing has been the same since January 26, it’s a mix of many factors that drive the extremely violent movements of global markets, especially the U.S. ones. And yet, amid the avalanche of news flooding us daily for the past three months, there is one common denominator: Donald Trump.Donald Trump, who could also be described as a “multiplier of volatility,” or a “stress emancipator,” or even a “mass producer of tariffs.” But we wouldn’t be fully accurate in our analysis if we didn’t also acknowledge Trump’s HUGE contribution to green energy — since by flipping his position every 24 hours, he’s generating enough electricity to power Washington for the next 12 years. Yesterday again, it was nearly impossible to find a SINGLE news story where Trump’s “brand” wasn’t stamped in capital letters.Sure, one of the main reasons for the recent rally is still the Champions League-level backpedaling on Chinese tariffs and the whole Jerome Powell situation, but beyond that, it seems like every company releasing earnings right now is mentioning the issue of tariffs — both in their current results and in their hesitant forecasts for the months to come. So let’s try to unpack yesterday’s session. I say “try,” because right now it feels like unless I keep it simple and go straight to the point, we’re going to need 18 pages and a one-hour podcast to cover it all.So let’s start from the beginning. The guy says “let’s start from the beginning” after a whole page of verbal diatribe about Trump. We’re not out of the woods yet. Markets are happy, and so are the Americans (well, maybe)First, the numbers. Yesterday, European markets were pleased by Powell’s comeback and the “easing” announced by Scott Bessent regarding China — not to mention Trump’s comments saying they were going to “be nice” to the Chinese.If we dig a little deeper, some economists are starting to say that in this trade war, the Americans actually have more to lose. It’s not by much — maybe two cargo ships of soybeans and a load of semiconductors — but still.Yesterday, Europeans were relieved and could FINALLY focus on their quarterly earnings. In the “quarterly results buffet” category, Dassault Systèmes kicked things off in depressed mode: net profit down 8.8%, 2025 margin revised downward, and BAM! -5%.Thales followed with weak order intake, resulting in a 4% drop after flirting with -5% at the open — surprising, as it was one of the darlings of European rearmament, now seemingly fizzling out.Kering continues to slide, with sales plummeting 14% and the tone becoming as upbeat as a rainy November day in Brest. We talked about it yesterday.Worldline got a real smackdown: -11.43% after losing a major contract and reporting gloomy revenue figures.Luckily, Renault came to the rescue with a +4.4% boost thanks to strong EV sales — I almost bought an electric Alpine yesterday.And Orange did its job quietly with international growth and a gentle +0.36%. In Switzerland, there was joy over Roche’s results, cautious optimism at Nestlé, solid happiness at Kühne + Nagel, and a boom for Belimo and Galderma.Vontobel posted a positive performance for Q1 despite political uncertainty and rising volatility. Assets under management increased, but the stock wasn’t rewarded — it dropped 3.3%. At the end of this crazy day where the word “uncertainty” was used an incalculable number of times (thank you Mr. Trump), the DAX was up 0.47%, France advanced 0.27%, and our good old Swiss SMI gained almost 1%, nearing the 12,000 mark.But you could still feel a sort of uneasy sensation in the European markets — that stomach-churning feeling. Not the one you get after eating six dozen bad oysters that hitchhiked from Arcachon, no! More like the one where, deep down, you just know that as soon as you turn your back, Donald Trump is going to mess things up again. But no!Well, for once, we were wrong.Europe ended slightly higher, wondering whether the China/Powell dynamic would be enough to keep the U.S. afloat through the close and whether Trump would unleash one of his trademark statements. And he didn’t. Or rather, he did — but not in the way we feared. Basically, just minutes after the European close, the S&P 500 started rising a little faster, despite a complete lack of news.Absolutely nothing was happening.Everyone was watching the S&P rise and thinking, “Hmm, why is this going up???”And then suddenly, Trump announced that “discussions had begun with the Chinese.”After weeks of mutual attacks via random percentages, the two giants finally agreed to talk it out in front of a therapist.The indices skyrocketed, ending the day with a bang, and the Philadelphia Semiconductor Index went nuts, soaring 5.63%.It has rebounded 24% from its lows but still needs to climb another 40% to reach all-time highs. That’s how badly it got battered these past eight months.But now, if “talks begin” and they all end up being best friends forever, it’s going to be a party. But the story doesn’t stop at the close — that would be way too simple — no, because we love

Weak But Stable

Second consecutive session of optimism on global stock markets, all thanks to the methods of Trumponomics. Slap on tariffs left and right, terrify the market, pick fights with everyone—and three days later, it’s all “raw potato, raw tactics.” And the markets bounce back because they’re SO, SO happy that there’s talk of de-escalation with China and that, in the end, Powell isn’t being fired. The word most often heard this morning is: RELIEF. Now we just need Trump not to pull another stunt in the next 24 hours, and we might actually end the week not too badly—for once. VolatilityThe question is how much longer this circus is going to last. Let’s not kid ourselves—volatility might be fun if you’re trading, but it’s pretty annoying when you don’t know how you’re going to get eaten tomorrow. Not just tomorrow, but especially MID-TERM. You don’t need to be a rocket scientist to realize that the companies publishing results right now are totally lost and incapable of making the slightest forecast about the future—and that inevitably affects investor behavior. No vision: no money. Trump has been going on about his MAGA—Make America Great Again—for over a year now, and the only thing he’s actually achieved is more of an MVGA: Make Volatility Great Again. We’ve been tossed around non-stop since January, and to be honest, I think we preferred the good old days when artificial intelligence was “so awesome” and gained 12% a day, every day, and no one gave a damn about the macroeconomy—because, you know, Nvidia. Rather than the current period, where we’re forced to live at the mercy of statements from a BIPOLAR President with a terrible haircut. Anyway, for now, we have no choice but to go along with Donald Trump’s three-step waltz, which always follows the same pattern: He threatens He imposes more tariffs – The market crashes He announces “progress” or pauses the tariffs – The market rebounds Since there’s still no real progress or trade deal: he threatens again… He imposes more tariffs – The market crashes You know the drill… That’s what we might call the “virtuous circle” of Trump’s policy. Though I’m not sure “virtuous” is quite the right word here, since according to Wikipedia, in economics, a virtuous cycle is a chain of positive events. In this case, it’s more a sequence of press releases that make no sense, sow doubt everywhere, and have us spinning in circles. But hey, yesterday the markets went back up because Trump’s words were “reassuring.” Reassuring in the sense that he’s making a gesture toward the Chinese, and reassuring in the sense that he’s not firing Powell or undermining the Fed’s independence. For now. Referring back to the cycle above, we’re currently at step 3. The weekend is 36 hours away, and I’m willing to bet he’s going to pull some crap before Monday morning!!! Europe Gone WildThe good news announced overnight from Tuesday to Wednesday allowed European markets to rise again and forget about Monday’s session. Let’s not say there was euphoria, but relief could definitely be felt. Relief, along with some decent quarterly numbers. In Germany, SAP carried the entire index on its back—their excellent results and out-of-this-world guidance pushed the rest of the tech sector upward, even though the PMI figures showed a fresh contraction in the German economy (but who cares, there’s loads of money pouring in). And despite the fact that Germany’s export-driven growth model is facing serious challenges. The good news: Trump’s mess hasn’t yet caused a major slowdown in the manufacturing sector. For now. The DAX closed up over 3%. Worth noting: since the lows of April 7, the German index has gained 19%. That figure alone—and the speed of the rise—speaks volumes about the mental state of the markets. In Paris, it was total madness with a big sigh of relief (there too). Between Trump relaxing and China declaring that their doors were “wide open,” you couldn’t ask for more. For now. Yesterday’s figures were a mixed bag: on one hand, Eurofins confirmed its annual targets, saying U.S. tariffs shouldn’t affect costs, while also expressing caution in this “uncertain economic climate.” Understandably so. But the market didn’t care about the caution—the stock soared 12%. On the flip side, Kering’s figures weren’t great. They repeated the same story from previous quarters: Gucci’s not doing well, traffic in their stores is down—especially Gucci. Well, when you see how ugly some of it is, you don’t really want to walk into the store—even from the window. Still, the stock ended up nearly 3% higher because “you know, Trump relaxed.” He didn’t buy Gucci sneakers, but he relaxed. In Switzerland and in CourtroomsSwitzerland followed the trend, with Logitech trying to rebound amid better U.S. sentiment. UBS gained 4.4% because of new partnerships with India. Today, we’ll keep an eye on the quarterly results of Roche, Nestlé, and Kühne + Nagel.Another topic, which didn’t really matter to the markets: the European Commission fined Apple €500 million and Meta €200 million for violating the DMA—the Digital Markets Act, for those familiar. This legislation aims to curb the power of big digital platforms and protect European consumers. Ah yes, regulation: Europe’s specialty. While the Americans and the rest of the world charge ahead with innovation, Europe focuses on regulation. So yesterday, the European Commission had a bit of a tantrum and slapped Apple and Meta with fines. Apple was punished for restricting app developers from promoting alternatives to the App Store—a practice that limits competition. Meta was called out for its “consent or pay” model, which forces users to choose between sharing their personal data for targeted ads or paying for an ad-free version. The Commission considers that this binary choice violates consumer rights. Apple and Meta now have 60 days to comply with the DMA or face further penalties. In conclusion: a €500 million fine for Apple is a drop in the ocean. However, it will be interesting to see whether the White

ETFs Reshape Investor Criteria

  Active ETFs are redefining asset management by combining the benefits of ETFs with a more dynamic investment approach. However, the diversity of strategies available requires investors to refine their selection criteria in order to fully capitalize on these innovative tools. Transparency, Flexibility, and Low Cost The trend has accelerated over the past two years, but Europe still lags far behind the levels seen in the United States. Across the Atlantic, these instruments captured 30% of all ETF flows last year. The U.S. market has historically led the ETF space, aided by a favorable tax framework and the conversion of many traditional mutual funds into active ETFs. While these mechanisms don’t apply in Europe, active ETFs still offer significant advantages—starting with their low cost. This reputation stems from passive investing, but investors are now demanding similar cost-efficiency in active approaches. As a result, the average management fees in the European active ETF space have steadily declined over the past decade, now falling below 30 basis points (0.30%) per year.“This is very positive for investors because our research shows a strong link between current fees and future performance,” notes Mara Dobrescu. Active ETFs also offer great transparency, with daily portfolio disclosures allowing investors to see the manager’s bets to outperform a benchmark index. Finally, being traded on stock exchanges, they are highly flexible and accessible. However, they face challenges related to capacity and liquidity. Since inflows can’t be capped, active ETFs are less suitable for niche strategies such as small caps or certain segments of the high-yield market. The Quest for Controlled Alpha For investors, many questions remain about how to select these instruments and how to integrate them into portfolios.“We emphasize the importance of due diligence for ETFs, whether active or passive,” says Sophie Bigeard, multi-asset head at Quaero Capital and president of the French Fund Selectors’ Society. “It’s crucial to know what you’re buying when investing in an ETF—whether it’s about liquidity, bid/ask spreads, jurisdiction, or the listing venue.” The main difficulty in selecting active ETFs is the wide variety of products available, ranging from tilted index management to fundamental active strategies. Currently, the market is mostly composed of the former. These can be used in a portfolio as a form of beta exposure, but with a more controlled alpha objective compared to traditional actively managed funds. That is the core challenge for these products. Selection criteria are therefore quite similar to those used for actively managed funds.“It involves validating a portfolio construction, allocation, and arbitrage process,” adds Sophie Bigeard. “On top of that, we pay particular attention to liquidity considerations.” Research at the Core For an active asset manager like Fidelity, the ETF approach involves offering differentiated solutions. Fidelity Investments has been in the U.S. ETF market since 2003, and Fidelity International has been active in Europe since 2017, now managing $9 billion across about 20 products. The first step was launching a range of optimized index ETFs, passively managed but based on proprietary indices developed by their U.S.-based research teams. In 2020, aiming for continuous innovation, they introduced a second range of active ETFs incorporating systematic active management. “With these two ranges, we aim to leverage our strengths and active DNA, which is why research is at the heart of constructing all these ETFs. They also incorporate sustainability considerations,” says Roxane Philibert, ETF product specialist at Fidelity International. The first approach (optimized index) includes two series: Quality Value Equity and Quality Income Equity.“Smart beta isn’t new in the market, but thanks to our quantitative teams at Fidelity Investments, we provide more refined and sophisticated solutions,” says Roxane Philibert. The focus is on quality, whereas value and income factors can naturally degrade portfolio quality. Another differentiating factor is Fidelity’s factor expertise.“We have no less than 90 proprietary factor indices built with our own definitions,” she adds. This allows for a more nuanced factor approach. For instance, in the value factor, traditional metrics (like price-to-earnings or price-to-book) are adjusted to include intangible elements such as R&D expenditures. Moreover, portfolios are constructed to maintain a core allocation, thus limiting sector or geographic skews that certain factors might cause. Top Ratings in the Portfolio The second approach (active ETFs) aims to generate alpha while maximizing the ESG profile of the portfolio and minimizing risk. These three objectives are central to product design across both equities and fixed income. The equity range (Equity Research Enhanced), consisting of six regional building blocks for global allocation, represents $3.7 billion. It is driven by research from over 130 analysts worldwide. Through systematic management, these ETFs maximize exposure to highly rated companies while maintaining an ex-ante tracking error below 2%. The investment universe is first screened for ESG and liquidity criteria. Then companies are assessed based on analyst ratings, data freshness, trend, and analyst conviction—both financial and non-financial. “All these signals allow us to build an ‘alpha score’ with a numerical value,” explains Roxane Philibert. “The optimization process then seeks to maximize exposure to this score while minimizing risk relative to the benchmark.” To achieve this, several constraints are applied: over- or underweighting cannot exceed 1% per stock and 2% per sector or country, ensuring the portfolio remains aligned with the benchmark. The objectives are similar on the fixed income side, which now totals nearly $3 billion. This range is AMF Category 1 and SFDR 9, allowing investors to integrate ESG criteria in a controlled way. These ETFs use stratified sampling, a method traditionally used in ETFs to reduce the number of holdings. “With this approach, we aim to generate alpha by selecting the best issuers and bonds,” says Roxane Philibert. This marketing document is intended exclusively for investment professionals and must not be distributed to retail investors. Investors should note that the views expressed may no longer be current and may have already been acted upon. Past performance is not a reliable indicator of future performance. The value of investments and the income from them may rise or fall, and investors may not recover

Bipolar Markets

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… HighlightsIf 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-turnsIn 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.” InterpretationMaybe 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

Donald Trump is a genius

We’ve been waiting for it — the new week. And it kicks off with yet another classic Trump “show,” the kind only he can pull off. The hot topic right now? The potential firing of Jerome Powell — and that’s what sent the market spiraling this Monday, April 21. No, it’s not the Pope’s death — it’s just another mess carefully crafted by Trump. It’s not every day you can compare a trading session to the Great Depression, but the Dow Jones is on track for its worst April since 1932. And the S&P 500 isn’t exactly laughing either, after having its sixth day this month with losses greater than 1.5%. That hasn’t happened in three years. Powell under pressure This story isn’t new, but clearly it’s been stewing all weekend. Last Thursday, Trump went after Powell and gave him some lovely nicknames. He now calls him “Mr. Too Late” and also used the term “major loser.” Amid all this, he suggested — or maybe his press team did — that he’s exploring legal ways to fire the Fed Chair. Because, in conventional wisdom, the head of the Federal Reserve is independent and cannot be fired by the President. But that’s not entirely true. Technically, there are legal gray areas — even if it’s far from straightforward. The only problem is that even attempting to fire Powell, whether legal or not, would be enough to damage the Fed’s credibility. And that’s what’s got the markets spooked. Investors are not thrilled about the idea of Powell being ousted, fearing his successor might bend over backward to please Trump — who might be great at manipulating crowds but is far less impressive when it comes to economics. If there were any doubts about how markets feel — besides the S&P 500 dropping 2.36% and the Nasdaq plunging 2.55% — just take a look at the bond market. As Trump played cowboy geopolitics, long-term yields shot up. The 10-year Treasury hit 4.41% and the 30-year climbed to 4.91%. In other words, the credit market’s starting to look pretty nervous. Some of the old-school “Bond Vigilantes” even fired a warning shot, with one expert basically saying: “Lay off the Fed and focus on your tariffs and Ukraine.” In other words: “Powell isn’t your punching bag. Go play somewhere else.” Honestly, Trump doesn’t seem too bothered by the criticism — he might as well have quoted Jacques Chirac’s legendary line: “It touches me one without moving the other.” But meanwhile, the market keeps moving. The Dollar Index dropped to its lowest level since 2022. And anyone who thought volatility would ease up this week might want to rethink that bet. Back to our sheep So yes, yesterday’s market crash was triggered by the Trump/Powell feud, but also by the ongoing tariff war. China and the U.S. are no longer talking, and their standoff is starting to scare everyone. The American President is doing everything he can to isolate China and push it into a corner. But everyone knows that attacking a wounded animal is dangerous — you never know how it will respond. And if that animal’s a dragon? Well, that’s even worse. I mean, I assume so. Not that I’ve run into a dragon recently, but still. Anyway, this tariff war is quickly morphing into a full-blown global trade war, reshuffling the deck on a massive scale. According to Trump’s latest announcements, around 70 countries — not exactly minor players — are being offered reduced tariffs… on one condition: cut ties with China completely. No trade, no shipping, nothing. I mean, maybe eating “hungry tiger noodles” at the Happy Panda Buffet could still fly, but that’s about it. Of course, China isn’t just going to sit there and take it. And Trump isn’t trying to starve them out — he wants them to come to the negotiating table on one knee. Maybe two. The only issue — and it’s a big one, creating even more uncertainty in the markets — is that China has zero intention of being pushed around. The arm-wrestling match is officially on, and until we know the winner — AND THE CONSEQUENCES — don’t expect peace and quiet on the trade war front. I actually made a video on this too, called “Trump’s Ultimatum to China: Beginning of Global Chaos?” — feel free to click the link if you want the full breakdown. Yeah, sorry, I made a lot of videos this weekend. But it was the best way to exorcise the chaos we’re stuck in. A chaos that took solid form on Wall Street this Easter Monday. Once again, geopolitics has taken over, and no one cared about economic data or quarterly reports. Not that there was much worth making a fuss over, anyway. So yeah, U.S. markets closed the day “almost” in the gutter, and the all-time highs are now 19% away. The road back is going to be long — especially as everyone starts admitting that Trump’s tariffs are likely to bring rising inflation, collapsing growth, and a potential recession. In short, Wall Street “experts” are bracing for the worst — whether it’s just a mild recession with easing inflation or the dreaded stagflation. Opinions are all over the place, and right now it’s hard to find anyone still practicing the good old “positive thinking” method. Meanwhile — as Asian markets this morning digest Wall Street’s plunge by doing absolutely nothing — maybe there’s hope. Hope that since Trump hasn’t said anything in 24 hours, he might just stay quiet forever. Or maybe it’s just because U.S. futures are already up 0.32% and people are hoping — ipso facto — that the Powell/China-driven sell-off is behind us and we can finally move on. Personally, I have no idea. What I do know, however, is that in this environment, it’s easier to have a 10-year vision than a 10-minute one. At least in 10 years, Trump will be gone. But the more we go forward, the more

Tariffs:A Cover for Inflation?

The day that just passed was another “two rooms, two vibes” session. On one side, Europe is hoping that the upcoming rate cut will save their world, so no one wants to sell. On the other side, the US keeps picking fights with everyone—especially China. Semiconductors are getting crushed from all sides, and Powell shows up calmly with his gas can and lighter, doing just what Johnny once sang: “Light the fire.” At the close, the Europeans managed to hold on, but over in New York, fatigue is clearly setting in, and the expression that comes to mind is: “we’re fed up.” Big Fatigue If you started reading or listening to this piece hoping to discover something new or fresh—or better yet, something original and different—let me warn you right now: you’re going to be disappointed! Disappointed, because at this point we’re just reheating yesterday’s leftovers. It’s becoming clear that there’s a full-blown war between China and Donald Trump, and honestly, sometimes you have to wonder how we’ll ever get back to a halfway normal situation. But let’s start from the beginning… While Europe was clinging to the railings trying not to panic—desperately SHOUTING ABOUT THE ECB CUTTING RATES TO DROWN OUT EVERYTHING ELSE—the US session kicked off with a general panic in the semiconductor sector. Nvidia, AMD, and ASML were getting slaughtered for nothing. Or rather, for a lot—because Nvidia lost about $200 billion in market cap in one day. That’s like wiping out UBS and ABB combined. But that’s not even the point. The AI kings got demolished for the same reasons we discussed yesterday morning: AMD and Nvidia can’t sell anything to China that even remotely relates to artificial intelligence. Trump’s comments yesterday didn’t help at all either. Add to that ASML’s earnings report showing slowing sales and a very, very, very cautious outlook for the rest of the year. This morning, we should get Taiwan Semiconductor (TSMC)’s earnings, but I’m not at all sure it’s going to reassure anyone. Because if their guidance is good, it means they’re living in an alternate universe… Bloodbath Day The day started with a bloodbath thanks to the semis. Then we tuned in to White House Radio for the latest, and again: nothing new, but nothing good either. Trump talked about an embargo on chips headed to China—which doesn’t change much for Nvidia and AMD since they’re already banned—but it killed any remaining hope of a deal with the White House. And, as usual, Trump had to one-up himself: he announced a 100% increase in tariffs on Chinese goods. We’re now at 245% import taxes on everything from China. Which makes no sense at all—he might as well have said 1,000% since trade has basically been frozen since the 50% level was reached. Hong Kong Post has even stopped shipping parcels to the US. Total War But never mind the numbers—what really matters is that the US is cranking up the pressure on China from every angle. Team Trump even said they’re negotiating with other countries to prevent China from exporting to them and then re-exporting to the US. Basically, Uncle Donald is doing everything he can to isolate China and block their exports. Over in China, they’re also gearing up for a fight: they’re refusing delivery of their Boeings and demanding “respect” from the US before they’ll even consider negotiating. And right now, you can’t exactly say Trump is showing the slightest atom of respect—to China or to anyone else, for that matter. Even though these tensions aren’t new, the markets are having a hard time putting a positive spin on it—especially since it’s nearly impossible to gauge the long-term impact of these policies. The numbers change every half hour. Even AI is losing its mind. So just to be safe, Wall Street traders removed the “BUY” key from their keyboards yesterday. And as if that weren’t enough chaos, Powell flew to Chicago and decided to stir the pot a bit more. Not that he gave us any clarity or helpful info—in fact, quite the opposite. Powell Spoke To sum up Powell’s speech in one sentence: the Fed needs to be ready to fight a resurgence in inflation caused by the tariffs. Powell believes those tariffs will hit hard—it’s not just a negotiating tactic—and inflation might spike again. On top of that, Powell emphasized how worried he is about slowing growth. COULDN’T ASK FOR BETTER NEWS! The head of the Fed himself talking about weak growth and rising inflation. Thankfully, he didn’t actually say the word stagflation, but we’re all definitely thinking it. Hard. Since 2021, the Fed has been obsessed with inflation. But now, the picture is getting more complicated as slowing growth is added to the mix. Powell hinted that the job market is still okay, but we should stay alert. Economists are already revising growth forecasts downward—but they’re not predicting a full-blown recession just yet. We’re talking slowdown, not crash. Still, the message is clear: risks are rising. And rates? Nothing. Nada. Not even a postcard. Powell played the classic “wait and see” card. He even repeated it with emphasis: “For now, we’re well-positioned to wait until we get more clarity.” The word “wait” was like a mantra. The zen of monetary policy. New York Not Happy So the session ended deep in the red. The Nasdaq dropped another 3%, and the SOX index lost 4.1%. Translation: the markets hated it. As soon as Powell said there was “no urgency” to cut rates, the Dow dropped 2,000 points—as if to really drive the point home. Yet the market prophets are already betting on four rate cuts before the end of 2025. In other words, the market and the Fed aren’t reading from the same script—and they don’t seem to be listening to each other either. Meanwhile, other Fed members are sending mixed signals. Kashkari and Collins said they want hard proof before cutting anything—like, say, a surge in unemployment. Chris Waller is playing the dove,

Good Morning Sir

The further we move forward, the harder it is for me to remember “what it was like when Trump was President the first time.” It seems we were quite attached to his “tweets,” but we weren’t nearly as dependent as we are today. Observing the markets over the past 24 hours, I can only note the drop in volume and the sudden disappearance of that deep interest we once had in the markets. Either people have stepped to the sidelines, waiting for the next tariff-related story, or last week’s frenzy is over and we’re slipping back into our macro routine until the next crisis comes along. Lying in Wait But to be honest, it feels more like we’re lying in wait, ready to either sell and short everything or to buy it all back and make FOMO our motto again. It seems unlikely that Trump will just stop and let time pass — he needs to be in the spotlight, and he desperately needs a concrete result so he can tell the press: “See, I told you so!”Still, yesterday’s session was sad and dreadfully boring, with volumes so low it felt like the weekend had already begun. Then again, technically, tomorrow is Friday since the week ends early in the U.S. But just because it was quiet and Trump didn’t say or do anything major doesn’t mean nothing happened. We still had to deal with the car sector, as the President had shown a desire to ease restrictions there. The sector reacted well, especially in Europe, where most automakers gained 2%, although there was still a sense of caution — investors know Trump can change his mind in a heartbeat.So, the European markets had a fairly positive session, but with pathetic volumes that suggested everyone was on the defensive. In the end, if we remove Trump from the equation, only two topics remained: LVMH’s disappointment, losing its spot as the largest market cap in France, overtaken by Hermès, which apparently isn’t feeling the same industry stress as its rival. Experts explained yesterday that while LVMH is luxury, Hermès is “more luxury than LVMH.” So since Hermès is more exclusive, people with more money haven’t yet cut back on their lifestyle.Bottom line: LVMH fell 7%, and to think that just a year ago people would’ve killed to buy it at €880… It’s yet another reminder of how little we actually understand in finance and in valuing a company. The second issue that rattled European investors was the ECB.To put it simply, while Madame Christine was still considering not cutting rates a few weeks ago — right after the March meeting — yesterday it became clear the ECB will cut rates again this week. The Trump method is weighing too heavily on European growth, which is already teetering on the edge, and the ECB can’t afford not to act — especially since inflationary pressures are no longer a concern. France even reported a CPI drop to 2.2% yesterday.If even Bayrou — with the blood pressure of a sloth — can bring inflation down, anyone can, and inflation clearly isn’t a problem anymore.So yes, the ECB will cut rates, but its messaging will remain “less dovish” while still keeping every option on the table — economic visibility in the Trump era is about as clear as a foggy London morning in October. Trump and the Metals While Europe mourned Bernard Arnault’s decline, welcomed rate cuts, and wondered if Trump could be trusted on the auto front, the U.S. President had already moved on.Since yesterday — and into this morning’s open — his main focus has been tariffs on rare earth metals. Trump just launched a new offensive: an investigation into potential tariffs on all critical minerals imports. The goal? Reduce U.S. dependence on China, which remains the dominant force in strategic metals (rare earths, cobalt, nickel, uranium…). In case you’re wondering: what’s a critical metal? It’s a metal the modern economy can’t live without but that no one really produces domestically.We need them for smartphones, EVs, fighter jets to defend against Putin, and for charging Teslas… but we usually have to get them from someone else — and often, that someone is China. A metal is considered “critical” if it meets two conditions: It’s essential to strategic sectors (defense, energy, electronics, green transition, etc.). It’s high-risk: either because very little is produced, or supply depends on unstable or uncooperative countries (like Russia or China). Washington is finally waking up to the fact that its economy runs on materials it doesn’t control. The causes? Massive industrial lag, fragile supply chains, and just one rare earth mine on U.S. soil. Meanwhile, Beijing controls most of the world’s refining and is already retaliating by restricting exports.America’s realizing — a bit late — that it let vital resources slip away… and now Trump wants to impose tariffs to claw back lost ground. This marks another stage in his war with China. Trump also offered China the chance to “step up” with proposals to resolve the conflict. Suddenly, he seems eager to extend an olive branch — but the problem? Xi doesn’t seem interested… for now.This new move on critical metals did move mining stocks a bit, and they’re still active in Australia this morning. But truthfully, it hasn’t had much impact on the overall market.U.S. indices closed slightly down yesterday, as if we wanted to push higher, but something was holding us back. Fear, most likely — fear of another Trump tariff misstep. Nvidia’s Backlash Right now, nothing moves in the U.S. without being filtered through the lens of potential Trump impact. Want proof? Just look at what happened to semiconductors after the market closed yesterday.NVIDIA announced a $5.5 billion impairment charge. Why?Because they had recently developed chips called H20 — specifically designed to circumvent Biden’s restrictions on China. But now, those chips require an export license… and OF COURSE, Washington has no intention of granting it.Result: unsold inventory, canceled orders, and obsolete stock. China still

Luxury Lives Matter

After the week we just lived through, it’s understandable that we need to take a breather and not get too excited. Yet the problems remain the same, and the doubts regarding tariffs are still ever-present. The temporary gift Trump gave to all electronics and their components was the session’s “driver,” but to be honest, while Europe benefitted, it was less striking in the US. You can tell that no one “really” believes in it, and Apple, which was supposed to be the “big winner” from the weekend’s news, only ended up 2.2% higher after opening with a +7%. No one’s buying into it, and we’re expecting a backlash. Two days in a rowBut hey, we’re not going to complain — it can’t go up 10% every day, and the US indices still posted their second consecutive day of gains. That hadn’t happened in a while. So let’s not get carried away and start saying a trend is forming, but let’s just say that “for now,” it’s A BIT CALMER than what we experienced last week. At the same time, it would’ve been hard to imagine worse — especially on a Monday — but the week’s not over yet, even if it will be shortened by Good Friday. In any case, we’re still living in the same world, and even if there are a few more corporate updates—ones that manage to break through the flood of statements from Trump and his team—the overall obsession remains tariffs. Let’s not kid ourselves. Yesterday, the American President again expressed his intention to find a solution to “relieve” the tariffs imposed on car manufacturers. And even if his objective wasn’t very clear in substance or form, it at least gave some breathing room to companies like GM or Stellantis — even if, again, the new moratorium Trump wants to announce for the sector is very unclear. It feels like we’re so desperate for good news or even just a little clarity in this shitty geopolitical environment (sorry, couldn’t find a synonym) that we’re willing to believe or get excited over anything. The mood was good, but nothing moreTo put it simply, the markets ended higher because of the electronics announcement that came over the weekend, but right after the announcement, Trump and Lutnick were quick to say we shouldn’t celebrate too soon. So the market found it hard to get fully motivated, knowing that a 180-degree reversal could come in the next few days. Hence, the performance was average at best, and overall, lacked enthusiasm. As the title said: it was too quiet. Europeans, on the other hand, were more motivated than the Americans — as if they were enjoying a quiet Monday with no major breaking news to catch up on last week’s performance. So, while we wait for the next batch of announcements from the “Trump Team” — which will surely hit us in the face before the Easter egg hunt — market players are acting “as if” none of it concerns them and, for now, trying to get back to normal life. Focus then shifted to Goldman Sachs’ figures. And yes, I know — we usually don’t care much about bank earnings. Even though they’re kind of the “barometer” for the beginning of earnings season, we generally know they don’t mean much. That’s because, if we’re being honest about analyst expectations, there’s no worse scenario than one banker analyzing another banker’s performance. Usually, they’re off the mark in many sectors, but when it comes to banks, it’s often completely out of touch. It’s like no one’s ever managed to read a bank balance sheet without having a seizure by page eight, and since then, after so many ER visits, the analysts covering the banking sector just throw darts at the wall to set expectations. It’s statistically safer. So Goldman Sachs ? The good news is that the sector’s been so beaten down since people began to realize that Trumponomics would bring back inflation, a recession, locusts, and a zombie apocalypse, that expectations were low. As a result, the queen of investment banks — nicknamed “the vampire squid” for years thanks to a Rolling Stone article — reported numbers well above expectations. Of course, when you expect nothing based on almost nothing, it’s hard to miss the quarter. The “BANK BALANCE SHEET ANALYSIS EXPERTS” were expecting $12.35 per share, and it came out at $14.12. The quarterly profit hit $4.74 billion, well above expectations. Last year, during the same period, profit was $4.13 billion. The bank also announced a share buyback program of up to $40 billion, and during the press conference, the CEO said recession risks are increasing due to tariffs and that the US economy is at risk, but that THEY are confident in themselves. It must be said that trading revenues for the first three months of the year were over $4.2 billion. So when people talk about volatility, at Goldman they say: Long may it last!!! Numbers, numbers and more numbersIt wasn’t just Goldman reporting yesterday – LVMH also had something to say. And the result? Not exactly mind-blowing, although there’s still plenty of hope for the future. Bernard Arnault had a bit of a rough patch in Q1 – but let’s be clear, he can still afford a €100 million townhouse in central Paris (and not in the sticks), with enough cash left to pick up one or two Ektorp sofas from Ikea. Now that we’re all reassured about Bernard’s standard of living, let’s note that sales were down 2%, at €20.3 billion. Nothing dramatic, but the real issue is in the US – a key market for them – AND OBVIOUSLY it’s due to Uncle Donald’s lovely tariffs. The group says it’s staying calm, confident… but also on guard, because the whole thing kind of smells like a highway rest stop toilet in July. CFO Cécile Cabanis is hoping the 90-day truce will allow for some negotiation, but the real message is: “we’re crossing our fingers,