| Swan Dive — May 8, 2025 Bit of a Deal, Then, Innit? Andrew Packer Markets are once again proving that any positive trade headline, no matter how void of substance, will be rewarded. President Trump announced overnight that the first “full” trade deal is being announced. Per Truth Social:
"Because of our long time history and allegiance together, it is a great honor to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!"
America and the U.K. boast a “special relationship.” A common people separated by a common language, as the old saying goes.
That special relationship applied to the trade war in the first place. Trump imposed a mere 10% tariff rate on the Brits, with rates of 25% on steel, aluminium (remember, it’s pronounced differently over there), and autos.
We’re watching for the specific details on this trade deal – it should provide a hint as to what kind of deals President Trump will sign off on.
Should overall tariff rates end up lower than before Liberation Day, it could be a sign that Trump is using the stick of tariffs to push, ironically, for far freer trade.
That would be a positive Grey Swan event, one that could allow financial markets to truly enjoy a Golden Age, if not a new Roaring 20’s. Stay tuned on that front, and enjoy the market trend higher for now. 📱 AI’s Quietly Killing Google’s Monopoly Business Yesterday, an executive at Apple inadvertently revealed that they were working on an AI search feature. Given Apple’s massive customer base, and the power of AI to not only search for things but provide curated answers, Google shares slid.
Google shares had their worst day since 2023, fell over 7% on Wednesday alone, marking its 7th worst trading day ever.
If any singular big tech company had a monopoly, it was the little search engine that could. Their 90% market share has lasted for decades, deeply entrenched in the tech psyche. Just ask Jeeves. Or Bing it.
We don’t know exactly how this story ends. But we do know that no matter how wide of a moat you build, digital or analogue, capitalism provides plenty of barbarians who will eventually storm the castle.
Even government-backed monopolies, such as issuing medallions to taxi drivers, can lose market share to a workaround like Uber.
If Google can pivot to AI searches, it can still be a strong company for decades. But even Jeff Bezos over at Amazon has predicted that, eventually, even if it’s more than a century away, his company will eventually falter.
We suspect Google’s belated push into AI will allow them to avoid extinction in the next few years, but it could be a rough ride for investors while they retool their brand for the AI era.
Google is the cheapest Magnificent Seven play at about 15 times earnings, and if they can hold their own in the age of AI, could have the most upside among the big tech plays.
 The man who correctly predicted the 2008 Financial Crisis two years before it unfolded...
Now says that by the end of 2025 the US dollar could lose its status as the world reserve currency.
In his new presentation, he’ll show you how you can avoid the fallout and possibly even profit from it.
Click here to watch.
The Mouse Heads to Abu Dhabi The Walt Disney Company reported that it would open its seventh theme park complex in the Middle East, specifically Abu Dhabi.
They join Six Flags, SeaWorld, and Legoland, which have already made announcements or broken ground.
Theme parks are a big business – outside of airports and concert venues, it’s one of the top venues for charging more than $3 for a bottle of water. And real estate in the desert is usually far cheaper than the orange groves of California (where they’re grown for eating) or the orange groves of Florida (where they’re grown for drinking).
Many on social media note that Disney, which went to battle with the state of Florida over legislation to keep sexual content out of elementary school classrooms, will now be building a multi-billion-dollar complex in a country where being homosexual isn’t just illegal – it can get you beheaded.
But hey, it’s a big profit margin after all.
With Disney still trading at over 30 times earnings and the brand tarnished in recent years, investors may want to look elsewhere. 💸 Another J-Pow Nothingburger Usually, Fed meeting days lead to big swings in the market. Going into yesterday’s announcement, markets saw a 97% chance of no changes in interest rates.
The market got it right again. The Fed kept interest rates steady. There was some slight change to the central bank’s statement, noting rising risks.
Currently, the Fed sees two risks. The first is higher inflationary pressure and prices as the tariff and trade war plays out. The second is a recession and slowing economy caused by those same causes. Both will lead the central bank to different outcomes.
Look, we all know the Fed’s next move will be a further rate cut. But Powell has made it clear that the next quarter point cut – less than a year after he kicked off the current rate cycle with a half point cut – will be done kicking and screaming.
Following yesterday’s meeting, traders see a 20% chance for a rate cut in June. And 3-4 rate cuts by the end of 2025.
The longer and more stubborn Powell is about cutting rates, the more awkward it will be for him when he finally does. 💵 Early Market Action Stocks closed slightly higher yesterday, but look ready for a bigger move higher today, driven by tariff news. Oil popped higher by a buck, but still trades under $60 per barrel.
Bitcoin pushed to $99,800 in early trading. We may not see $100,000 quite yet today. Gold is sliding on the positive trade news, down about $50 overnight to $3,350. $50-$100 daily swings in the metal are becoming a bit more commonplace.
The volatility index, or VIX, is set to drop under 20 today. Typically, 20 is a good level for calm markets versus elevated markets – and anything over 40 is usually a sign of something going wrong.
If you’ve stayed the course over the past few weeks, your investments should be holding up just fine.
We see the potential for a small pullback over the next few weeks, based on the strength of the recent rally and the deluge of positive headlines with little hard data behind it.
That could prove a small buying opportunity for any companies you may be proverbially kicking yourself for not buying at the market low. With bitcoin trending higher, our Grey Swan Live! event last week with Mark Jeftovic looks particularly timely.
~ Andrew P.S. Addison continues his travels this week, but just sent over a short interview he recorded with Ian King, the tech and crypto expert at our corporate affiliate Banyan Hill. The video will be up for our paid-up fraternity members later today.
Your thoughts? Please send them here: addison@greyswanfraternity.com
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
Please send your comments, reactions, opprobrium, vitriol and praise to: feedback@greyswanfraternity.com |
Post a Comment
Post a Comment