In today’s episode, Kip breaks down a high energy start to the week in the markets, as retail and millennial investors continue to outmaneuver institutional titans. Kip dives into the ongoing saga of Trump’s China tariffs, dissecting the latest 90 day pause, fresh tariff reductions, and what this chaotic negotiation style means for U.S. companies and market momentum.

Don’t look back because the market is closed. Good Monday afternoon everyone. Kip Herriage here with the daily VRA Investing Podcast. Hope you had a good day today. Welcome back. I think you probably did have a good day today, unless you’re an institutional investor because this is really, this is the story of this, not just this move, it’s a story of the entirety of the recovery from tariff mania is the distinction between retail investors, as we’ve been saying, modern era, Mrs. Watanabe’s retail investors, millennial investors specifically leading the way because they are. It’s millennial investors versus institutional investors because this is the story.

There is no other story besides, you know, the surface story of Trump tariffs, China, etc. Of course, we’ll talk about that more in a moment. But what’s really driving this market is the fact that institutional investors are on the wrong side. Not just on the wrong side, they’re short and on the wrong side. That means they’ve got to buy twice. They’ve cut over the shorts, these hedge funds. You got to cover the short positions and then go long. Tyler said it in our pre podcast meeting.

[00:01:04]:
This, this is when big moves happen now and we saw a bit of that today. But I think maybe just the beginning, this is when this is the kind of environment where a melt up can really take place. But let’s, we’ll come back to that more in just a moment. Get a lot to talk about. We’ll do pretty quickly. Good day in the markets today. Funny because this morning when I was putting the letter out, I just came back and looked at it. You know, the futures market, the Dow Jones is up 1100 points.

That’s where we closed. Nasdaq futures were 810 points. That’s essentially where we closed. Both were then just a few points of where we closed. So it was just one of those days. It also had the feel of a day. This market did not want to go lower. We had a little bit of a dip just after the open.

I think at one point NASDAQ was up like 500 points. But again, NASDAQ finished up 779. Okay, but we never had a big dip. There was never any serious attempt to take this market down. And if you remember Trump’s first term, this happened in Trump’s first term. We had a terrible battle, right? The same kind, not maybe not the same scale, but the same kind of thing happened. And when they finally announced that deals had been reached, again, this is, again, this is only temporary. Again, it’s just a 90 day pause.

[00:02:15]:
But back in Trump’s first term, when they announced the deal had been reached, the market sold off hard. That was a very hard sell off. And that Monday when they made the announcement, the market finished sharply lower on that day. I think some people felt that could have happened today and it just didn’t. So I think this today, this feel where we closed at essentially the highs of the day with not having a really serious attempt at a sell off. If I was short or out of the market today, I would be very concerned here because now you’re saying, okay, this market’s not going to give me a chance to get in. I have to pay up. And that’s when you get the train leaving the station kind of a vibe, right? And we saw it again.

This was textbook today, folks. This was textbook bull market action that says we’re going higher. The semis today finishing up 6.33%. Nasdaq up 4.35. That’s it. That’s the formula. NAS semis, lean, Nasdaq, Nasdaq leads the broad market. Again, everything about today was textbook saying that we’re going higher.

And I think that is what’s going to happen here. Now specifically, if you’re, if you’re curious about the specifics of this trade deal, first of all, who knows who can, unless you’re in, unless you’re, you know, unless you’re in D.C. and you work in the tariff arena, who the hell knows what’s going on here? I could not begin to why would you try to figure it out? Because it could change tomorrow. And that’s really what’s happened here. It’s a chaos theory that Trump really thrives by. I think that’s probably what’s happening more than anything else. But as on paper as it looks now, China has reduced their tariffs from 120 again, nine day coordinated tariff pause. They, they’ve reduced their tariffs from 125% to 10%.

[00:03:56]:
That’s China. The US is reduced from 145 to 30%. That’s the, that’s, those are the broad strokes, right? And so that’s what had the market going. But it’s really, there’s a lot more behind this that has again, we don’t have any of those, you know, details yet. Those are still forthcoming. But we’re getting, we’re getting hints that this could really be an inroad for US Companies into China because this is really what the administration wants. It’s what every administration is wanting to For Chinese markets to open up their markets to non Chinese companies. This has always been the problem.

Trump made some progress here in his first term. Frankly, a lot of presidents have made incremental progress here, but there’s been nothing big. And so when they talk about non tariff trade barriers, these are the kind of things that really matter, right? Like, you know what, Chinese entrepreneurs come to the United States, open a business, go for it, you’ll be our competition. That, that’s not the way it works in China. Right. You have to have a Chinese partner, and even then you can’t own a 51% stake in a company there. So they, they, they, they really do. This is what Trump and I wish Trump had made this more the focus so people understood exactly what he’s talking about.

But at the end of the day, look, we’re not going to question it. This looks to be a victory. We’re certainly headed in the right direction, but the market’s been telling us for some time this is going to get resolved. Right? This is classic Trump. You know, we’ve had this conversation with you on these podcasts very often in the last couple of months. This is the way Trump does it. This is, this is art of the classic art of the deals, how he negotiates. It’s messy, it’s ugly, but this is, this is where he’s most comfortable making people feel uncomfortable.

[00:05:35]:
And so, but in just to be in full disclosure, yeah, this was messy. It was a very messy rollout. There was no coordination to it. And that’s what kind of told you from the beginning that this was all a negotiating ploy because there was no backup support for any of these programs. Right. To tell Americans, you’re going to have to now become manufacturers. Oh, we’re going to shut off all trade from China. And millions of entrepreneurs are going that depend on those imports from China going and other countries, Vietnam, etcetera, are going, well, you just screwed me.

What am I supposed to do? How am I going to get my product right? And by the way, we’ve gotten a lot of those emails and phone calls. And if we’re getting them at the number we’re getting them, then you can just imagine how big the problem is nationally. So again, all of this, you know, works into the reason Trump has flipped or whatever you want to call it, but he has, but again, they got concessions from China. And by the way, Scott Besson, you say what you will about want him, okay, this guy is the perfect guy for Trump. He’s a perfect treasury secretary for Trump. Because you can tell they are in sync. And Scott Besant has his back all the time. He’s always.

And no one’s. I think he’s the best messenger that I’ve seen for Trump, especially on the economic side. And so I think these guys work well together. He’s clearly on Team Trump. That’s, by the way, the common thread. If you look at Trump’s cabinet, they’re all on Team Trump. You don’t find them. There are no turncoats in this group, unlike Trump’s first term.

[00:07:06]:
So he’s really got the group that he needs around him to implement some of his goals. But again, in full disclosure, as I said this morning, our letter and when I tweet these things out, you know, I get, I get a lot of hate because people that, people that are really pro Trump simply don’t want to hear anything that’s not pro Trump. And I understand that to a degree and I respect it. The guy is trying to accomplish big things, but at the same time, you know, rose colored glasses that we don’t give. I don’t get along very well with rose colored glasses. So the point I’m making here is that can you really get credit for putting out a fire if you’re the arsonist and the firefighter at the same time? And that is the role that Trump has played here. But again, that’s where he’s most comfortable in blowing stuff up. And then, and then, of course, he wanted, he’ll wind up finding a way to take credit for it.

I have no problem with that. Let Trump be Trump. Okay? That’s what Steve Bannon said in his first term when he became his campaign manager. He put it on the, on the big board in Trump Tower. You see, they had all these points about how we’re going to control Trump, how are we going to get him to stop. Stale message, et cetera. Street band and went up, you probably heard the story and just erase it all from the whiteboard and just wrote, let Trump be Trump. And that was the way that they ran his campaign, which of course is why Trump won, because they let it be himself.

And so that’s what’s happening now in this administration. I think we just have to get used to it. And I also think that there’s going to be much brighter days ahead of us because again, there’s really nothing stopping this market now. There are a couple of canaries in the coal mine, bond yields. Look, let’s talk about this now, because this is an issue the 10 year year now is back to 4.45%. Well, at the tariff calamity highs, we’re at 4.51%. We’re almost there now. I don’t think it’s a reason to be concerned, but the bond market vigilantes think they’ve got some leverage here, and they do, because again, this is another reason that Trump wound up pivoting, if you will, is because the bond market vigilante said, you know what? This ain’t going to work.

[00:09:09]:
And we’re going to show you it’s not going to work by selling off all your debt. And you’ll see yields skyrocket, and there’s no way Jay Powell is going to cut and fight it, because we’re on the same team here. And so this is something Trump has to deal with. It’s something every president’s had to deal with. And I think it’s good. It’s a carburetor, if you will. It controls government spending to a degree. But just know this, the reason that bond yields went up today is probably a story we should get comfortable with, because right now you got a pro growth message, right? If we’re not going to have a trade war with China and potentially other countries, and of course China’s the only one that really mattered, then guess what? Growth is going to be stronger.

Well, that, that augurs for higher interest rates. That’s number one. Number two, it probably means that, no, the Fed’s not willing to cut or not in a hurry to cut the odds, I think, of a June cut now down to something like 15, 20%. So that’s probably not going to happen now unless we get some negative economic surprises. And Trump’s deal today probably took, took, took anything major, any major damage to the economy probably took that off the table. We’re at that point, we’re talking about this. A month ago, it was like, okay, we get to mid May and if the ships aren’t coming in, we’re going to have empty shells while we’re there. So this is when these.

And by the way, the Chinese ship started loading back up again a week ago. We talked about that then as well. So I think the market, again, everyone knew that this was coming. I think it wasn’t surprise, maybe the success of it, the fact that China seemed to just kind of acquiesce. But look, it doesn’t matter, right? We got the deal done. But again, as far as rates go, the Fed is not going to be in a hurry to cut now. So there’s two reasons Pro growth. The Fed’s not going to cut.

[00:10:54]:
And then there’s a third. And that is the same reason, folks, that we’ve been pounding the table on gold in the miners. And by the way, they were down big today. I’ll cover that more in a moment. These are dips that must be bought. I’m not saying today is a final low. Okay, you understand that? But again, goals up 81% in the last 18 months. So it’s outperformed everything.

Gold has outperformed this 500 since 2020. Excuse me, since 2000, gold is up more than the SB 500 over the last 25 years. All right, that’s kind of hard to believe, but it’s true. And so look, gold’s going to keep going up. And this is the real reason, because this, this debt, this increased debt we’re going to have ain’t going nowhere. They’re not going to have any. They’re just. Can’t you.

Unless you cut entitlements, unless you start talking about the serious money. And they’re not going to go there. They’re not going to go there with health care, they’re not going to go with Medicaid, unless you start talking about the real money, the real spinic expenditures. There’s just, you’re cutting around the edges and there’s just, as Elon found, there’s just not much you can do there, especially when the Republican Party won’t back you up and put these things, codify these into law, which they haven’t done. So I think the die is cast, folks. The die is cast that we’re going to have exploding debt levels. It’s just, it’s what’s going to happen until somebody has the political capital. And Trump doesn’t have that.

[00:12:12]:
He just does not have that. You’re going to need a much stronger Congress with much higher ratios of Republicans to Democrats serious about making changes. And I gotta tell you the truth, this has kind of been our theme for a long time. Very little is going to stop this, These exploding debt levels. It’s probably going to take some kind of a economic problem before this gets handled. But if you remember, we’ve always told you this is not something to worry about. It’s really not something to worry about. And now here’s the reason.

The United States, we have the world’s sovereign reserve currency, right? The US Dollar is king shit. And when you have the world’s reserve currency, guess what? You can always print yourself out of it. That’s just the way it is no one can make you default. That’s never going to happen. And by the way, why is it that we’re worried about United States debt levels and our interest rates when China’s are so much further than ours? I mean it really is. I don’t hear this talked about in the media at all. But here you have China with about and this is if you believe their numbers and believe their math in their accounting, which you should not. China’s debt to GDP is 300%.

They say it’s officially 280 to 300%. It’s higher. There’s no question it’s higher. Right. Japan’s is 250 to 275% debt to GDP. What’s ours? 1, not a 2, 123% to debt to GDP. So we’re half their levels. In a worst case scenario we’re half their levels.

[00:13:45]:
So if the world’s going to have a blow up and it’s not going to happen here, especially with the world’s currency, it’s not going to happen here. And this is one of the reasons we’ve always said look, no one’s got the courage to do this. It’s not going to happen at this point. Something’s going to have to happen. I think that something is going to be a global conference where they get together and work all this out and they exchange other guarantees and maybe gold. Maybe that’s one of the reasons there’s such a push to buy gold. Now I think that you’re going to see a coordinated deal in the next 10 years, nothing soon because again the world’s not pushing for that. The 10 year yields in Japan, in China, again remember their debt to GDP is more than twice ours and the 10 year yield in China is 1.5%.

Ours is 4.45%. Again this makes no sense. Right? But I think that that’s telling you the world is not alarmed about US debt levels. This is about something very different again especially with the European debt levels being again European tenure yields being so much lower than ours are. This really doesn’t make sense but it is what it is. I think some of this is being used as leverage against the President. It is a get Trump attempt. I think again central banks, when they’re all aligned against you, that’s the number one cartel on the planet.

Good luck beating them. You’re not going to beat them. You’re just not going to beat them. They’re going to beat you every time. So it is what it is. This is where we are. This is why we’ve never been worried about, about our debt levels. We just haven’t.

[00:15:20]:
That’s just the reality of it. We’re not worried about debt levels. We’re not worried. It’s not that we’re not worried. Okay. I’m saying it’s not a current cause for concern because it’s just not anyone that says it is, I’m sorry, they don’t know what they’re talking about. All right? So debt levels will continue to go up. I do believe rates are still going to come down.

And I think there’s no question that US Rates are going to fall lower. We think we’ll have within the next couple of years, two to three years, what pure deflation in this country. Because that’s where we’re headed, right? We’re also probably headed back to negative real interest rates. Remember, we were just there a few years ago until Covid happened. Okay. So, you know, it’s, I don’t think it’s, it’s, it’s a, it’s an out there statement to say we’re going back there again. I think that this is where we’re going. Central banks love negative rates.

They love quantitative easing. They want to get back into rate cutting and they will. And the other point is that again, I think that if you think back again, we’ve said this is most similar to the dot com Bull Market 1995-2000. And we’ve said this often over the years. You know, the average 10 year yield then was 6.1% and the market melted up like it’s never melted up before. So we’re at 4.45% now. All right? So again, we are not concerned about the, I’m just saying there are. The bond market vigilantes are exerting their influence.

[00:16:38]:
I think at the end of the day, this is all, I think it’s all going to work out. And I think that the real story here, as I said a minute ago, is the Mrs. Watanabes of today, right? The Japanese Mrs. Watanabes that controlled the Japanese markets in the late 90s and 2000s. Okay. They did a lot of it. Of course, the, the yen carry trade. It was retail investors, folks, they had power and they moved markets.

They absolutely moved markets. And that’s what’s happening right now with millennial retail investors. They are moving. They’re the reason we didn’t have more of a crash than we already did. We had a little bit of a flash crash there. And they’re the Reason markets didn’t go lower, of course, then Trump put a pause in the tariffs. That was the final bottom. But retail investors never backed away.

Millennial retail investors, one of our big broad megatrends. They showed up every day to buy while institutional investors have sold record levels of stock and gone short. And they’ve been wrong. That’s what we said at the beginning of this podcast. I think that this move, this move today looked rock solid to me. This looked like a market that is just beginning its move. And I think that’s the theme here and that’s, that’s the way we’re invested. That’s what we believe is going to happen here.

[00:17:53]:
And I think everything else is going to, frankly, I think everything else is noise. I really do. It’ll never be straight up. It’ll never be just parabolic straight up. But this market wants to go a lot higher again. If the playbook is what would happen during, during COVID the pandemic, then we’ll, you know that market was back to all time highs in August, right? And that was a brutal 30 sell off. This wasn’t even that bad. So this is a, this, this, you know, we could be back at all time highs long before then, before August.

We’re only like, you know, after today’s gains we’re at 5% from all time highs. S P100 and in NASDAQ we’re at roughly 8, 8 and a half percent from all time highs. I mean after today’s case, you know that could happen this week. Today again NASDAQ up 4.3% led the way. Semis led them up 6.3 again textbook Dow Jones today up 2.8%. SBF 100 up 3.2%. And the small caps again. There is no group more hated more under love than small caps.

Iwm today the Rust 2000 ETF was up. Final print here 3.6%. So again, very good day all around. Take a look under the hood today. Excellent internals. They did not disappoint. Again this is a confirmation all around confirmation today of a textbook move higher and it does auger for more gains. Textbook internals today we had NYSE 3 to 1 positive against decline.

[00:19:22]:
Same thing. Nasdaq better than 3 to 1 positive up volume for NYSE was 77.8%. That’s very good. Not great. NASDAQ will put it in the great category. Up volume 82.3%. We also had about 200 more stocks at 50 high than 52 week low. That will begin to Expand now.

Well, we should now get back, I would think, you know, by midweek or so, we’ll get back to going. Okay, we had 500 more stocks at a new high than the new low. All right. That’s the trend that we’re looking for. And our second watch today, also outstanding. 10 of 11 sectors finished higher. Consumer discretionary, again, this is tech. This is textbook consumer discretionary, up 5.6%.

Right. People are buying things they don’t need. That’s what you want to see. You’re back in a pro growth environment. Technology up 4.6% today. Communication services at 3.3%. Again, we had six actors up better than 6% today. Again, this is rock solid today in our commodity watch today.

[00:20:15]:
This is really, you know, for a lot of us that, I mean, we look, we, you’re not going to find anyone that loves a gold, silver in the miners more than we do, specifically gold in the miners. Right. This is something we’ve been very passionate about since I started the VRA in 2003. And we’ve always just recommended, you know, saving gold. This, we, we, we, that’s what we’ve done. We’ve saved in gold and that’s what I recommend people do now. You always got to keep some money in the bank and fiat in the bank, right? And you know, but, but your serious money that you want to save, that you want to have really safe. We’ve always recommended doing that in gold.

And it’s paid not, not big dividends, has paid enormous dividends. So we’re not going to change our tune about what we, what we think is going to happen here with gold. Even though gold today was down just close to 3% today, and the miners are down like 7% today. But again, they, they’ve led the market all year. The gold miners have been the top performing sector of the year. And of course, gold has outperformed everything pretty much, you know, certainly over the next last six months to a year, even back, as I said earlier, back to 2000. So this is going to be a buying opportunity because the debt, the fiat currency printing is not going away, US or globally. Debt issuance just is unrelenting.

It’s not going to go away. These are the real reasons. Plus what is apparently a serious effort at de dollarization for global economies like the BRIC countries, of course, about China, Russia, India. That is what they, this is what they’re building. They want, they don’t want to be reliant on the US dollar because that gives the US control over their economies. That is happening. Trump may not like it, but unless something changes, that’s underway. And again, that’s more competition for the US Dollar and that likely means the US Dollar will continue lower and that means gold and the miners will continue higher.

[00:22:07]:
We’re going to be joined tomorrow night on our VRA member Zoom by Fred Earnest, who’s the CEO of Vista Gold, which of course is one of our 10 baggers and one of our key buy lists in the mining space. It’s been a pretty good run here. We’re up a couple hundred percent. But I think this move is in its infancy. Matter of fact, I say it very confidently. Fred can elucidate his views on that. Tomorrow night. I’ll go back with Fred to like I think 2007, I think is when he got the job at Vista.

I knew the company before he got the job. But look, they, the company has changed a lot over the years. We’ve traded this stock and we’re in for the third time. This will be the final time. I think the company will be sold here. I think that’s, that’s, that’s clearly what’s about to happen here. I don’t think there’s any doubt about it now. They may keep an interest in this mine and they may have other things they want to do after.

I actually think they’ll sell the whole thing and I think we’ll get, we had a chance to ask Fred some of those questions tomorrow night. So I look forward to joining us, having you join us on that for one of the more interesting mining plays that exist, period. 7 million ounces of gold in the ground, no debt, market cap of only like $105 million. Is the thing is tiny with like 10 billion plus of gold in the ground. So, you know, the market has not been very kind to developers. Producers, you know, they’re getting much higher multiples now, but the developers, you know, they, they, they still don’t believe it. They, people still don’t believe that gold is going to stay at these levels. That’s why the miners continue to trade at record low levels based on cash flow and price to earnings multiples, which is a little astounding.

[00:23:45]:
But that bull market is beginning and we’ll get a chance to ask Fred some really good questions tomorrow about the future of Vista Gold. And Thursday night, Vista will be joined by Lost Soldier Oil and Gas and their team. A lot of exciting things happens there. So Both calls at 8pm Eastern. If you’re with us at the VRA, you’ll get an email with zoom link sent to you tomorrow morning and Thursday morning before the open again, Commodity watch today. Gold today was down as I said earlier, down. What was it down close to 3%. Silver today was down just a little bit, not much.

It was down sharply at the open but managed. Coming back, crude oil today was, was up about 1% on the day. Right now last trade and crude oil is 61.94 a barrel and finally they bitcoin again. It’s breakout. The breakout took place at like 100, 100, 1000 and now we’re coming back a little bit of a test on that last trade, 1025 but it’s had a good run. It’s broken through its trading range and now of course the all time high is like 1092. We’re not far from that now. We think that’s, that’s, we think this bitcoin is ready to go considerably higher.

All the pieces are in place for that and we are once again long and strong. And there are a couple of really interesting crypto, cryptocurrency ideas out there that we’re involved with as well. Come and join us@discertainanceider.com or veryletter.com and get a, get a full list of everything we’re involved with on the buy side. All right folks, that’s it for today. Hey, hope you had a great day, an even better night. We’ll see you back here again tomorrow after the close.