To Tariff or Not to Tariff! Trump's Trade War Sends Markets Into a Frenzy!

GET OVER HERE! The Market's Initial Reaction

Foolish mortals! I Scorpion have witnessed market turmoil that rivals the Netherrealm itself. Last Wednesday the news of paused tariffs brought a rally so glorious it was almost...pleasant. But don't be fooled! Like a deceptive Shang Tsung the market quickly shifted leaving investors more confused than Raiden trying to understand human emotions. The S&P 500 and Nasdaq saw gains but the underlying damage from Trump's trade war is still evident. The S&P 500 is down 4.4% for the month. This weakness following a dismal March has me yearning for the simplicity of a fight to the death!

The Art of Economic Suffering!

Trump's announcement of 'reciprocal' tariffs was like a spear to the gut of Wall Street. Economists and CEOs are now muttering about recession like frightened children in the face of Shao Kahn. Investors bless their simple hearts are struggling to understand how to value stocks when the rules change faster than Quan Chi switches allegiances. It seems Trump 2.0 has forgotten the stock market as a barometer of his success. Has he forgotten the feeling of victory?!

FINISH HIM! Trump Pauses Markets Rally (Briefly)

Then a glimmer of hope! Trump in a move that shocked even me paused tariffs. The S&P 500 rocketed higher a desperate attempt to survive. But China never one to back down from a fight retaliated with increased tariffs. The air crackled with tension thicker than the stench of the Dead Pool. Was this capitulation? Or a cunning trap? Only the Elder Gods know for sure.

TEST YOUR MIGHT! Bond Market Mayhem!

The real reason for the pause may not have been the stock market but the bond market where foreign bondholders like Japan and China dumping Treasurys en masse sent yields soaring. A bridge too far indeed for the man who once built a wall to keep others out. The mere thought of a depression terrified him. Apparently death is preferable to bad press. The 10 year Treasury yield influencing everything from mortgage rates to consumer loans jumped higher again proving that economic forces can be as unpredictable as a Shokan warrior.

GET OVER HERE... Apple's Exemption and the Semiconductor Sector's Fate

In a twist worthy of a Mortal Kombat plot the Trump administration issued guidance exempting smartphones and computers from the reciprocal tariffs. A major win for Apple who's products are mostly produced in China. 145% duty rates are a little absurd for one company to overcome. Though perhaps the coast is not clear for Apple because there are questions on whether phones and other electronics will eventually be subject to the 'sectoral' tariffs on semiconductors that Trump has been saying will be announced soon. As Commerce Secretary Howard Lutnick said on ABC's 'This Week' that the exemption was not 'permanent.' The uncertainty of these tariffs is enough to make one contemplate one's life.

FLAWLESS VICTORY? Earnings and Economic Indicators

Looking ahead earnings reports from Goldman Sachs Abbott Laboratories and others will be crucial. Jim Cramer that wise old sage says management's real time insights are more valuable than backward looking economic data. And how right he is the best way to figure out where the market is going is to gather information from the source. Let us see how many companies cut their full year guidance due to the economic uncertainties. The week ahead is filled with potential for both triumph and disaster. Just like Mortal Kombat itself.