MARKET WRAP

Another extremely volatile day for equities with a near 6.5% intraday range. An early rally attempt failed and stocks spent most of the day heading lower before stopping shy of yesterday morning’s lows. The main headline today is over 100% cumulative tariffs on China going into effect tonight.

For the day SPX -1.6%, QQQ -2.0 and IWM hit particularly hard -3.9%. Outside of equities some very stagflationary action, with Gold higher, Oil sharply lower and treasury yields ticking higher. Oil is now below 60 and at its lowest levels in the past 2 years. (more on current equity volatility at the bottom of this email)

• MRKT Call: Guy and Dan discuss this morning’s failed rally attempt, how real yesterday’s lows are as potential support, and how high any rally/bounce could go.

• RiskReversal Pod: Gene Munster on Apple, Microsoft, Meta, Google, Tesla, and Nvidia, and insights into stock valuations and the potential for further declines.

MRKT MATRIX: April 8, 2025

Today’s Top Stories:

• Dow drops 300 points as tariff market sell-off resumes (CNBC)

• Goldman Warns of Bear Market, BlackRock Downgrades US Stocks (Bloomberg)

• UBS cuts S&P 500 target and GDP forecast for 2025 (CNBC)

• The World Suddenly Has a Plausible Alternative to US Treasuries (Bloomberg)

• Covid-Era Similarities Signal More Pain Ahead for Global Stocks (Bloomberg)

• ‘Big Short’ investor Steve Eisman on tariff turmoil: Don’t be a hero (CNBC)

• Apple Users Rush to Upgrade iPhones Ahead of Potential Tariffs-Related Price Hikes (WSJ)

• Walmart is facing tariffs and recession fears. It may have a secret weapon to keep growing (CNBC)

• Tariffs Rattle VC Funding, Startups and Software Spending (The Information)

• Alibaba Chases International AI Users With New Qwen Upgrades (Bloomberg)

Today’s MRKT Call is Presented by FactSet

Stocks Volatile on Hopes of Tariff Deals

The show discusses today’s failed bounce, how far any bounce could carry through to the upside, perhaps to the 5400-5500 level, and how real was yesterday’s lows if those are retested on today’s failed rally attempt? Discussions on the battle going on in treasury yields and more:

• Analysis: SPX, VIX, TLT, AAPL, JPM, GLD, TGT, XLE

• Call of the Day - Tom Lee’s note to investors on Liberation Day surprise

• Your Questions

  • The post close email has mentioned being careful trading in this environment, is that still true?

  • Can you talk to the impact if China/others dump US Treasuries.

  • Gold’s lack of movement the past few trading days, has it lost its luster?

Click here to access all of the charts mentioned in today’s MRKT Call.

Sign up below to receive daily MRKT Call reminders and early access to the charts featured in the show.

Today’s RiskReversal Podcast is Presented by Current and RBC

Tech Crash or Buying Opportunity with Gene Munster

Dan Nathan welcomes Gene Munster of Deepwater Asset Management to the RiskReversal Podcast. They discuss the recent significant market drops in the S&P and Nasdaq, considering if these drops could be termed a 'market crash'. Gene shares his views on the volatile market, especially in light of increasing tariffs between the U.S. and China. They analyze the performance and future of several major stocks, including Apple, Microsoft, Meta, Google, Tesla, and Nvidia, touching on AI's influence and the broader economic impacts of the trade war. Gene offers insights into stock valuations and the potential for further declines, highlighting the importance of investor psychology and market reactions to ongoing geopolitical developments.

Timecodes 

• 0:00 - Tech Sell-Off

• 7:45 - AAPL & MSFT

• 12:50 - META

• 16:45 - GOOGL

• 20:05 - TSLA

• 26:30 - NVDA

What’s Next?

Yesterday, we highlighted the historic levels of intraday volatility currently priced into the market. To recap: the expected move for the SPX today was approximately 3.3%, implying a range between roughly 4850 and 5250. Shortly after the open, the index hit the top end of that range, peaking around 5265, before trending steadily lower throughout the session, hitting a low of 4915 and closing at 4983.

If you're keeping score at home, that's a 6.5% intraday range — and that comes right on the heels of yesterday’s nearly 8% range. These are the kinds of swings that would typically unfold over the course of several months, not back-to-back trading days.

What does this tell us? Simply put, current market structure — driven by liquidity dynamics and heightened options volatility/gamma — is amplifying price moves in a way we haven’t seen on a multi-day basis since the COVID-era sell-off. And for now, that environment appears to be sticking around. With SPX implied volatility holding at 40 or higher well into May, traders are pricing in sustained volatility expectations, and those expectations become self-fulfilling by thin liquidity and a short gamma backdrop.

As we noted yesterday, a significant number of large players — market makers, hedge funds, etc. — are currently short volatility. To manage risk, they're being forced to aggressively trade intraday swings, further fueling the volatility. But as an investor, you're not obligated to play that game.

Instead, having a pre-defined game plan — knowing your ideal entry and exit points — pays off in a market like this. When the SPX is moving 6% a day, there’s a good chance your levels actually get hit. Other have to chase, you do not.

For the rest of the week, expected move, [implied range] and (implied vol)

SPX 5.3% / 4700 - 5265  / 71 !

Again, that’s a range, and an implied vol you rarely see. Be careful, be patient. One other note, yesterday’s lows were SPX 4835, very near important technical support levels. It’s highly likely we see a retest of that area and how equities react on a second run will be crucial for what’s next.

Subscribe to the RiskReversal YouTube Channel and drop a comment/like to show your support

Want to check out past episodes? Search for “On The Tape,” “MRKT Call,” or “Okay, Computer.” wherever you listen to podcasts

We want to hear your feedback! Reply to this email with any comments or questions