The Supreme Court struck down President Trump’s massive tariffs, with Chief Justice John Roberts writing the 6–3 decision. Trump was rebuked, now scrambling to find legal means to justify his actions. The Trade Act of 1974 appears to give the President the ability to “impose levies [tariffs] for up to 150 days.” Congressional approval, the next logical step would be a major test of whether or not Trump could garner democratic support. As Justice Kavanaugh pointed out, “refunding tariffs already collected could be a major mess, and have significant consequences for the treasury.’ “
Markets pretty much ‘brushed off’ the Supreme Court’s decision Friday, as buying was heavy, and all indexes turned positive, ending the session on a high note. The blue chip Dow Jones Industrial Average rebounded after a steep decline, finishing the week up 1.1%. “The Nasdaq ended its many weeks of decline,” according to Dow Jones Market Data, as heavy techs and AI issues were the focus of investors, driving prices upward with the index up 1.5%. Louis Navellier, founder of investment firm Navelliere & Associates said: “I’m not worried about it at all. I just assume they’ll work it out.” [speaking of tariffs]
A fresh report by CITRINI Research, released Monday, detailing serious concerns of what potential impact of Artificial Intelligence could have on all technology, sent the markets into selloff. “Foir the entirety of modern economic history, human intelligence has been the scarce input. We are now experiencing the unwind of that premium,” as quoted from the 7,000-word hypothetical. The effect on the market was brutal, as software stocks and many ‘named’ specific issues, by CITIRINI dived 10%-13%, “the worst one-day performance since 2000,” according to the WSJ. The Dow Jones Industrial Average slid 822 points, off 1.7%. According to Edward Jones strategist Angelo Kourkafas, “In our view, the newly announced 15% tariff rate is unlikely to have a meaningful impact on economic activity, and we advise investors not to overreact to headlines.” The bond market was, on the contrary, stronger with the 10-year Treasury note finishing Monday at 4.026 as buying was heavy, and investors were looking for ‘safer-havens.’ Gold, Silver and Platinum were all up. Gold is trading at $5,204.7, Silver is hovering near $87.45, while the forgotten precious metal Platinum is at $2,248.30, as all three metals are edging up to the pre-selloff levels.
Stocks turned around Tuesday as the blue-chip Dow Jones Industrial Average added 380 points, up 0.8% as investors and traders poured back into the market. Many ‘hard-hit’ techs and software and even AI stocks recovered some of their losses after yesterday’s release of the CITIRINI’s Research report on the damaging aspects of artificial intelligence targeting technology, and software companies. The U.S. Dollar strengthened versus the Japanese Yen as trade balances began favoring the dollar. Bitcoin dropped $1,790 to $66,855.41 on Thursday, unable to generate a sustained rally. “The market is so thirsty for a narrative to hold onto. It is so thirsty for something it can wrap its arms around and say this is the outcome of the AI boom,” said Michael Antonelli, a market strategist for Baird Private Wealth Management.
A welcome technology rally Wednesday pushed the S&P 500 up 1.8%, as investors rotated portfolios after a bruising sell-off on Monday. The Dow Jones gained 380 points, up 0.6% while the tech-heavy Nasdaq jumped 1.3%. Many U.S. investors are “continuing to rotate serious funds into international equities”. The lower stock prices and lower PE’s lure the U.S. investor…and funds. Thursday’s session was lackluster as investors were not driven by the release of record AI earnings, posted by the largest company in the world….as Nvidia fell 5.5%. Many technology and related stocks after releasing better earnings have seen their stock react negatively, as investors are wary of steep prices.
RUMBLINGS ON THE STREET
Ed Yardeni, President of Yardeni Research, WSJ – “Investors are so jittery about the implications of AI, both good and bad. Right now they’re focusing on the disruption aspects of it.”
Shairmir Mossavat Rehmanim,head of investment strategy group at Goldman Sachs, WSJ – “Bulls can see a silver lining,” and adds, “The U.S. system remains resilient with checks and balances, while slow, will protect investors.”
Itsunori Onodera, tax po;icy-chief of Japan’s ruling Liberal Democratic Party, WSJ “Frankly it’s a total mess,” [When asked about Trump’stariffs]. “As an ally, Japan is worried that countries are increasingly going to keep their distance from the U.S. when the U.S. is in such a mess.”
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