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| Could Trump's trade battles hurt American investors? |
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| Hi Traders, In Trump's first term, American businesses cut back on investment spending and industrial production stalled. Many believe the most likely check on this new wave of tariffs will be a prolonged drop in stock prices, which the administration seems to view as a crucial gauge of success. Trade policy in the United States has been on a roller-coaster ride, and it's unclear when the turbulence will subside. Recently, the administration declared 25% tariffs on aluminum and steel, while also promising reciprocal tariffs on various trade partners. This follows a series of dramatic tariff threats that have led multiple countries to negotiate under pressure, offering policy concessions in exchange for temporary reprieves. The uncertainty has reached new heights. The only certainty is that the next four years of trade policy will be arbitrary, capricious, and unpredictable. Even short-lived tariff announcements can upend the cost structure for companies reliant on imported inputs, while also jeopardizing access to foreign markets as partners retaliate. If tariffs climb high enough, borrowing costs may also rise if the Federal Reserve tightens monetary policy to counter inflationary pressures. Faced with these unknowns, many businesses will likely put investment decisions on hold until they see a clearer path forward. This is not a mere hypothetical. An index that tracks references to protectionist policies soared to unprecedented levels by late 2018 and again in mid-2019. Although average tariff rates only inched upward at that time, the constant threats took a toll: growth in real investment was cut in half by early 2019, and industrial production came to a standstill. Worries about tariffs contributed to a slowdown in global economic activity, helping trigger a steep stock market slide in 2018. Historical patterns suggest that such climbs in trade policy uncertainty can indeed lead to drops in economic output. Uncertainty briefly ebbed in the following years but surged again during the recent presidential campaign, surpassing even previous highs. After the latest tariffs and threats, speculation about future moves has become feverish. Many argue that wresting unilateral tariff authority away from the White House is the only way to bring back stability and restore confidence among investors. Yet Congress shows little appetite for reclaiming its constitutional power over tariffs, and the courts appear unlikely to block the administration’s actions. All of this leaves the stock market as a potential moderating force. If share prices were to dive and remain depressed, it might discourage additional tariff hikes. But relying on a market downturn to rein in trade policy is a risky proposition at best. For now, the outlook remains murky, and the economic fallout—from stalled investment to potential retaliatory measures—looms larger with each new twist in the ongoing trade saga. - The Team at Altos Trading
In the next article, Gold's surge toward $3,000 an ounce has outpaced stocks and bitcoin this year, driven by central bank buying and rising economic uncertainty under President Trump. |
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Gold nears $3,000—how its rally compares to bitcoin and equities |
| Gold has been on a powerful climb toward the $3,000-an-ounce mark, riding a years-long buying spree by central banks and buoyed by growing economic uncertainty tied to President Donald Trump’s policies. Since the start of 2025, gold prices have outperformed both the S&P 500 and bitcoin, with futures in New York climbing more than 11%, compared to a rise of just over 3% in the S&P 500. Gold-mining stocks are finally catching up. The VanEck Gold Miners ETF (GDX) is up nearly 24% year to date, after lagging the metal’s gains throughout much of 2024. Yet over the longer term, gold’s lofty highs have failed to match the towering returns seen in both the stock market and bitcoin since mid-2020, when gold first surpassed the $2,000 threshold in the final months of Trump’s first term. From July 31, 2020, through early February of this year, gold futures have climbed nearly 48%. That’s a sharp contrast to the roughly 18% decline in U.S. Treasury bond exchange-traded funds over the same period. However, over that stretch, bitcoin has soared by more than 700%, while the S&P 500 has advanced nearly 100%. Many market participants appear unfazed by gold’s surge to record levels, focusing instead on high-flying sectors like tech stocks or digital assets. This lack of attention may actually be typical of a maturing bull market, where it’s not until prices reach new milestones that more widespread enthusiasm begins to take hold. Despite the continued rise in U.S. equities—often taken as a sign of investor confidence—gold’s historic march toward $3,000 may also hint at concerns about the global economic landscape. If gold is viewed as a barometer of economic and political anxiety, then its recent leap could signal deepening worries over trade policies, financial instability, and geopolitical tensions in the Trump era. One perspective even holds that “gold thrives on economic uncertainty, financial risk, and geopolitical turmoil,” conditions that appear increasingly prominent under the current administration. Central banks, especially in emerging markets, have been a major driver of demand, extending a 15-year run of net gold purchases. Their interest reportedly surged after U.S. government sanctions on Russia highlighted the potential vulnerability of foreign reserves held in dollars. Investors in Europe and North America have also turned more heavily to gold amid rising macroeconomic and geopolitical pressures, while last year’s banking-sector jitters—sparked by a major U.S. bank collapse—further underscored the metal’s appeal as a safe-haven asset. Now that gold is flirting with the $3,000 level, the question becomes whether it can break through and remain there. The metal has historically struggled to stay above key psychological thresholds on its first attempts, dipping below $1,000 and $2,000 for extended periods before finally consolidating at higher ranges. As gold tests uncharted territory again, some see parallels to previous periods when stocks also traded near all-time highs—raising the possibility that this dual rally could be a precursor to broader volatility. For now, gold’s record surge offers a measure of vindication for those who have held positions in the metal. If headlines continue to highlight economic and political uncertainties—and if global central banks maintain their vigorous pace of accumulation—there’s a chance gold’s remarkable climb may still have room to run. Yet history shows that the metal’s relationship with round-number price levels can be complex, and its ability to remain comfortably above $3,000 in the months ahead is far from guaranteed. |
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| Disclaimer: The Altos Trading Alert Newsletter is published as an information service for subscribers, and it includes opinions as to buying, selling and holding various stocks and other securities. However, the publishers of the Altos Trading Alert Newsletter are not brokers or investment advisers, and do not provide investment advice or recommendations directed to any particular subscriber or in view of the particular circumstances of any particular person. Altos Trading, including its owner, does not participate in any trades issued through the alert services. Subscribers to Altos Trading or any other persons who buy, sell or hold securities should do so with caution and consult with a broker or investment adviser before doing so. Trading securities and options involves risk. Prior to buying or selling an option, an investor must receive a copy of Characteristics and Risks of Standardized Options. Investors need a broker to trade securities and options, and must meet suitability requirements. Past results are not necessarily indicative of future performance. Performance figures are based on actual recommendations. Due to the time critical nature of trading, brokerage fees, and the activity of other subscribers, there is no guarantee that subscribers will mirror the performance of the service. Performance numbers shown are based on trades subscribers could enter based on the trade alerts. Altos Trading, LLC assumes no responsibility for any losses incurred by any individual or entity as a result of trade alerts or strategies taught through courses or coaching services. 7154 W State Street
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