Just a quick update in a day with a fast moving market. Trump’s tariffs are eliciting a reaction among key supporters and the real economy. Pittsburgh based Howmet Aerospace, a key supplier to Airbus and Boeing, declared force majeure on its contracts owing to the new tariff regime. Force majeure is a legal practice allows enabling contracted parties to avoid obligations due to unavoidable or unpredictable external circumstances.
This measure is likely just the tip of the iceberg. We will undoubtedly see other signs of economic slowdown in the coming days.
In addition, formerly staunch Trump supporter and billionaire hedge fund manager Bill Ackman has turned on Trump. In a
long post on Twitter/X, he wrote:
Business is a confidence game. The president is losing the confidence of business leaders around the globe. The consequences for our country and the millions of our citizens who have supported the president — in particular low-income consumers who are already under a huge amount of economic stress — are going to be severely negative. This is not what we voted for.
Ackman’s reaction stands in contrast to a recent WSJ poll taken before the tariff news: “Republican skepticism of free trade surfaced when voters were asked whether tariffs help or hurt the U.S. economy. Some 77% of Republicans said tariffs help create U.S. jobs and are beneficial, while 93% of Democrats said they raise prices and are mostly a negative force.”
Stabilization = Seller Exhaustion?
As I write these words, the S&P 500 seems to be trying to make a bottom. The weekly chart shows strong support at about the 4800 level, which coincides with the previous resistance turned support level and the 50% retracement level of the move from the October 2022 low to the 2025 high. While the index didn’t reach 4800 today, it did near those levels in the pre-opening hours in futures trading. The 14-week RSI is oversold, consistent with bottoms seen at the COVID Crash of 2020 and tactical lows in 2022. Weekly MACD is as oversold as the height of the COVID Crash.
The news backdrop continues to be negative. The Trump Administration shows no signs of backing down on tariffs, but market stabilization in the face of bad news is a sign of seller exhaustion, as I outlined yesterday.
Good luck to all the traders today.
Addendum and clarification: The market did stage a brief and sudden rally on a headline that Kevin Hassatt had announced a 90-day pause in tariffs. The announcement was denied and the market retreated. The move was not on the lack of news.
You bet on the war with Iran, it’s not tarifs only, BIG trouble are coming whithout NATO