MARKET WRAP

We kicked off the week with broadly negative sentiment. Contributing factors included stalled trade negotiations, intensifying concerns over the Fed’s independence, and growing unease around the strength of the U.S. economy. The result: a broad selloff across equities, the dollar, and treasuries. Investors sought safety in gold—and possibly even bitcoin—while equities managed to avoid a complete rout thanks to a modest late-day bounce that lifted markets off the lows.

On the day: SPX -2.4%, QQQ - 2.5%, IWM -2.1%. Dollar (DXY) -1% (now at multi yr lows). Gold +3% (to new highs), and Oil -2%. Equity vol picked up and the VIX is now 34.

• MRKT Call - Guy and Dan look at the latest threats made to Chair Powell’s independence, what stories the action in risk assets are implying and as always, your questions answered.

• RiskReversal Pod - The investor confidence crisis with coverage of the action in gold, treasuries & the dollar and discussion of upcoming economic indicators and their potential market implications.

MRKT MATRIX: April 21, 2025

Today’s Top Stories:

• Dow drops 950 points as Trump again attacks Powell and sows investor doubt (CNBC)

• Trump ramps up attacks on Powell, demands ‘loser’ Fed chair lower rates ‘NOW’ (CNBC)

• Expect a ‘severe’ market reaction if Trump tries to fire Powell, says Evercore ISI’s Krishna Guha (CNBC)

• First Shockwaves of Trump’s Tariffs Are About to Hit the World Economy (Bloomberg)

• The U.S. will ‘absolutely’ have a recession in 2025 if high tariffs stay, Apollo’s Slok says (CNBC)

• China vows retaliation against countries that follow U.S. calls to isolate Beijing (CNBC)

• Tesla Bull Ives Warns of ‘Code Red’ If Musk Sticks With DOGE (Bloomberg)

• Huawei readies new AI chip for mass shipment as China seeks Nvidia alternatives, sources say (Reuters)

Today’s MRKT Call is Presented by MoneyLion

Stocks Sink As Trump Threatens To Fire Fed Chair Powell

Threats to fire Powell, a dollar decline, gold spiking, selling in treasuries, oh my. Dan and Guy dive into the latest news, analyze the charts and take your questions.

• Analysis: SPX, TLT, DHI, GS, JPM, BKX, KRE, SOXX, IWM, TSM, Gold

• Your Questions Answered:

  • Thoughts on AMZN, chart and fundamentals?

  • Are the 10 year log chart on SOXX and the 25 year IWM predicting a deep bear market?

  • Do you think its weird we haven’t had a circuit breaker amidst all this volatility?

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Today’s RiskReversal Podcast is Presented by CME Group and SoFi

Confidence Crisis: Gold, Rates & Powell Under Pressure

Dan and Guy highlight significant market movements, including declines in the S&P 500 and NASDAQ, a volatile VIX, the crashing U.S. dollar, surging Bitcoin prices, and record-breaking gold values. A central theme of the conversation is the potential ramifications if President Trump were to fire Fed Chair Jerome Powell, including effects on the dollar, bond yields, and stock markets. They also explore the broader impacts of trade wars, tariffs, and geopolitical tensions, emphasizing the role of confidence in economic stability. The episode wraps up with insights into upcoming economic indicators and their potential market implications.

Timecodes

• 0:00 - Macro Meltdown

• 11:00 - Gold

• 17:45 - Tariffs & China

• 21:40 - Powell Pressure

• 24:45 - Sentiment Shift

What’s Next?

As mentioned in this weekend’s note, it made sense for implied volatility to pick up following the extended three-day weekend. Part of last week’s muted volatility likely stemmed from the compression of monthly options into expiration, which temporarily suppressed movement.

Now, as we head into a stretch of key earnings announcements and economic data releases, keep an eye on short-term volatility—both at the index level and within specific sectors and stocks reporting results.

Looking at the rest of the week, expected moves are essentially unchanged from Friday’s close. With the weekend effect now behind us, today’s increase in implied volatility is offsetting the time decay from the past four days.

Expected Move into Friday’s Close:

• SPX/SPY: 3%

• QQQ: 3.5%

• IWM: 3.2%

• TLT: 1.9%

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