Weak dollar, higher gold, higher yields, lower stock trade is on again/Covid 2.0 with global trade flows/Interesting earnings and tariff comments

Another day of a weaker dollar, higher gold prices, higher bond yields and lower stocks. While some might say that a weaker US dollar could be a lift to US exporters, the problem with that is about 40% of goods imports are intermediate goods that end up in the finished product. That is now getting more expensive instead on top of the 10% global tariff and other tariffs like autos, steel, and aluminum. Will this quicken reshoring? Unlikely as the cost of construction has now jumped again and where do you think much of the equipment needed to build out a facility comes from? China. And, the weaker the dollar gets, the more expensive these tariffs also become for the US consumer.

DXY

With respect to trade, from everything I'm hearing and reading, we are experiencing a Covid 19 type shutdown of global supply chains in response to the tariffs, particularly on China, except we don't have to wear masks nor social distance. Lori Ann LaRocco wrote on CNBC.com last Wednesday that "Cancellations of Chinese freight ships begin as bookings plummet." In the piece, "A total of 80 blank, or canceled, sailings out of China have been recorded by freight company HLS Group. It wrote in a recent note to clients that with the trade war between China and the US leading to a demand plummet, carriers have started to suspend or adjust transpacific services."

More, "Major ocean freight alliance ONE has 'suspended until further notice' a route it had previously been planning to bring back in May, which would have included ports of Qingdao, Ningbo, Shanghai, Pusan, Vancouver, and Tacoma. Meanwhile, an existing route is planning to cancel its port call at Wilmington, North Carolina."

"If each sailing was carrying 8,000 to 10,000 TEUs (twenty-foot equivalent units), that would equal a decline in freight traffic of between 640,000-800,000 containers, and lead to decreased crane operations at the ports, lower fees that could be collected, and declines in container pick-ups and transports by trucks, rails, and to warehouses for storage." Thus, the impact is broad and deep. https://www.cnbc.com/2025/04/16/trade-war-fallout-china-freight-ship-decline-begins-orders-plummet.html

A real mess I say and I fear the large number of small businesses that are not going to make it through this. I'd argue that the extreme tariffs on China, and those on us, are going to hurt the US more than China. And I'll say again, expect empty shelves of certain things in the next 30-60 days.

I saw a story today on Bloomberg News, "China slashes US commodities purchases as trade tensions worsen." In it, "China's imports of many US commodities decreased sharply last month, with some falling to zero." There were NO purchases of US LNG and wheat in March.

In an early sign of the collapse in global trade, South Korea's exports in the first 20 days of April fell 5.2% y/o/y while imports dropped by 11.8%.

With the shakiness in the stock market, I'm looking for any clues on whether it's impacting upper income spending as we know without them, we can guarantee ourselves a recession. If you didn't see this article last week in the WSJ, "Wealthy Buyers are Backing Out of Multimillion Dollar Home Deals." It said, "market gyrations and tariffs, both current and pending, are casting a shadow on high-end property as buyers pull out of deals or tap the brakes amid global economic uncertainty." The article reminded us that the top 10% of wealth holders have 36% of their total assets in stocks and mutual funds citing new data from Realtor.com. https://www.wsj.com/real-estate/luxury-homes/luxury-home-buyers-cancel-deals-dd588ad5?mod=itp_wsj

On to some earnings calls.