Market Chaos & Trading Opportunities: Tariffs, Ukraine, and Stock Picks with Mark Sebastian & Frank Gregory

Hey Traders,

Mark Sebastian here, recapping a lively discussion with Frank Gregory about the market's reaction to current events and the trading opportunities they present. Frank joined me to break down the impact of DC's policies, the ongoing Ukraine situation, and how these factors are shaping the market.

Key Takeaways from Frank Gregory:

• Uncertainty & Volatility:
  • The rhetoric from DC, including tariffs and foreign policy, is causing market uncertainty and increased volatility.
  • While this is challenging for buy-and-hold strategies, it creates significant opportunities for traders.
  • One of those strategies being Andrew's Two-Way Trades.  Watch our director of education and head of product development talk about how they work right here.
• Tariff Impacts:
  • Tariffs on steel and aluminum, and retaliatory tariffs from Canada and the EU, are causing short-term volatility.
  • Long-term, tariffs on China are expected to have a more significant impact.
  • Domestic steel and aluminum producers could benefit from reduced foreign competition, while companies relying on foreign imports (like Alcoa) may be negatively affected.
  • The automotive industry (Ford, GM) and the nuclear industry may also see increased costs.
• Ukraine & Defense:
  • The US reengaging in military support for Ukraine is expected to benefit US-based defense companies.
  • A proposed $500 billion deal for critical mineral production in Ukraine, while potentially beneficial long-term, is likely to take many years to materialize.
  • This highlights the importance of domestic critical mineral supplies and could boost US manufacturers.
• Semiconductors:
  • The US government is supporting domestic chip production, with Taiwan Semiconductor receiving significant attention and investment.
  • Intel, while receiving government funds, is not favored by Frank.
• General Market Thoughts:
  • Frank believes that the current administration uses chaos as leverage.
  • He belives that many short term volatile events will be transitory.

My Trading Trading Ideas:

Building on Frank's insights, here are the trades we discussed:

• Nucor (NUE):
  • Nucor is a strong domestic steel producer that could benefit from reduced foreign competition.
• Alcoa (AA):
  • Alcoa, with its international production, could be negatively impacted by tariffs.
• General Motors (GM):
  • GM could face increased costs due to tariffs and is lagging behind in the EV market.
• NextEra Energy (NEE):
  • NEE is a diversified renewable energy leader that could benefit from increased demand.
• Taiwan Semiconductor (TSM) Calls:
  • TSM is receiving strong government support and investing heavily in US production.
• Alibaba (BABA):
  • We are shorting the Chinese market.
• Chinese EV Companies:
  • We are also shorting the chinese EV market, due to overbought conditions.

Additional Notes:

• We discussed the overbought conditions of Chinese EV companies and the potential for a pullback.
• We also touched on the volatility of UVIX and its potential for a sharp decline if volatility subsides.
• We gave an update on our Nvidia trade.

Catch my morning breakdown here.

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