(Justin Vaughn, Editor, Options Trading Report)
The shortened week finished in disarray…as the Dow Jones Industrial Average lost 527 points or 1.3% at Thursday’s close. The Nasdaq Composite was off 0.1% while the S&P 500 eked out a small gain of 0.1%. It was a turbulent 4 day week as investors continued to parse President Trump’s tariff policies, specifically his ‘90 day assessment period and the institution of ‘new restrictions’ on China. The Trump-Powell debacle is now heating up after the President’s comment; “termination cannot be fast enough.” Mr. Powell has reiterated many times that his term is up in 2026 and will serve its entirety. He has suggested, if necessary he would ‘take it to the courts.’ Mr. Powell added; “Our independence is a matter of law.”
Over 70 countries have and are willing to buy more U.S. products and commence negotiations to “come together’ on President Trump’s initial tariff stance. He said on Thursday he would welcome negotiations and is “sure the situation could be resolved.” He is anxious to meet with the European Union representatives to “make deals.”
Gold opened Monday heading to a new high of $3,351.00 a troy ounce, up an amazing 40% the past year. The gold buying demand by Central Banks, individuals and collectors shows no sign of relenting, with Goldman-Sachs suggesting gold is “at an attractive entry point.” Goldman is calling for a rise to the $3,700 range by year’s end. Large buyers in the Asian markets, especially China, have been very active. If recession signs continue to surface, gold will accelerate in price, as the street sets its sights higher.
Monday’s session was a bloodbath as the Dow Jones Industrial Average sank more than 950 points, with President Trump’s latest quip, “TOO LATE AND WRONG,” stung the exchanges. Both the S&P 500 and Nasdaq were off significantly 2.36% and 2.35% respectively. Mortgage rates were steady at near 7% as the real estate market struggles with adequate supply and buyer anxiety. The 10-year Treasury note yield was at 4.42% on Monday up from Thursday’s 4.33%. Crude oil finished Monday at $63.99, up .51 cents, steady as OPEC+ members continue to ponder production quotes to counter the weakening market. The stock market roared back with a vengeance on Tuesday after the sell-off the day before. After talks with Secretary of State Robio and the Treasury Secretary Bessent, President Trump put the Trump-Powwell Feud to bed….for now stating he will not fire Mr.Powell and added that many of his ‘off-hand comments were misconstrued by his people and elected officials.’ He also reiterated again that Chinese tariffs were to be adjusted downward. Investors and traders were appeased and ‘jumped in the market.’ Stocks surged, over a 1,000 points as many investors were again comfortable and satisfied that government events were cooling and falling into lesser concerning events. Both the S&P 500 and the Nasdaq Composite were significantly up, 2.5% and 2.7% respectively. Positive discussions between JD Vance and Indian Prime Minster Norendra Modi on trade policies progressed well, as lower tariffs gave much optimism for increased trade between the two countries. Gold was in the spotlight again as it has now appreciated over 29% for the year, setting at a high of $3,392.00, after cresting $3,400.00 earlier in the session. JPMorgan Chase adjusted their projections upward, saying a target of $4,000.00 a troy ounce is possible in the next 6 months. Silver is ‘catching-fire’ also, as the neglected metal often over-shadowed by gold is beginning to build steam, now priced at $33.50 an ounce. Many analysts and economists see silver pushing near $40.00 an ounce by year’s end.
RUMBLINGS ON THE STREET
Mike Johnson, U.S. House Speaker, Barron’s – “The No. 1 threat to our nation right now is our debt. We take that very seriously. Congress has kicked the can down the road for decades, and we’re out of road. I think it depends on whether we’re measuring can-miles-kicked under road law or road policy, but I’m not an accountant or asphalt-layer.”
Rebecca Ungarino Staff Writer, Barron’s – “This market doesn’t bring guarantees. There is one certainty though: Traders will find a way to profit from the wreckage, and shareholders are rewarding that.”
Judy Ganes, Founder and President of JGanes, Barron’s – “A 46% tariff on coffee from Vietnam would add an extra 76 cents per dollar to the consumer’s cost.”
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