WTF is happening now?

A quick recap of what happened overnight.

> Trade war:  The US reportedly rejected a trade deal offer from Japan that included “full exemption from reciprocal tariffs” [link]. India reported offered a “zero-for-zero” tariff deal on steel and auto parts [link]. No official word from the White House on either point, except the US Secretary of Commerce teased the possibility of deals this week but confirmed that the US is not in contact with China [link]. Trump met with Mark Carney, the newly elected Prime Minister of Canada, and came out of the meeting referring to the border between the countries as an “artificially-drawn line” and that the US annexation of Canada was the “way it was meant to be” [link].

> Oil:  The price of oil has been in freefall, with talk of oil producers ramping up production at a time when the perception that we may be in the midst of a global economic slowdown has lowered forward-looking expectations of demand. Falling oil prices sound good to those who own gas-powered cars, but the implication is a lot darker for global prosperity. Traders were “buying the dip” as of this writing, but the downward trend is still in place.

> Gold:  Continues to demonstrate unusual levels of demand.

> Bitcoin:  Microstrategy (MSTR) completed another stock offer fundraising, this time bringing in over $21 billion to buy more Bitcoin. MSTR was the primary volume driver the last time it did one of these transactions, so let’s watch what happens. They’ve already bought $180 million worth, but they have a ton of dry powder burning a hole in their pockets.

  MB BOTTOM-LINE:  It feels like we’ve all become so comfortable with gold living at/near ATHs, and with many of the other critical commodities (like oil) behaving in an ominously chaotic manner. If you could take this data and show it to a trader in mid-2024, they’d probably assume the Russian invasion of Ukraine had exploded into a ferocious regional conflict with aspirations for evolving into a global conflict. What is happening is not normal, and it’s important to remember that. It’s easy to get comfy. Don’t get comfy.
 

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