Intraday Market Thoughts Archives

🚨 Friday's ruling by the Supreme Court on the legality of US tariffs could have a sharp but short-lived impact on stocks, bonds and even gold. I've read several simplified scenario analysis to the consequences of the ruling, but if you're day trading then you must be aware of the legal nuances the Trump administration can adopt. A ruling against the tariffs likely boost stocks by removing the burden on companies to "eat" the tariffs or to "absorb" any increase to the retail price. Consumers stocks will also likely gain. But there are other points worth noting. See below the image for more details.

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✅ Stocks of companies largely dependent on imported goods may benefit from a ruling against the tariffs. 

✅ US govt bond prices may decline (yields rise) because any tariffs removal is considered stimulatory to consumers and the economy. This may weaken the case for Fed rate cuts, while exacerbating the Federal deficit via restricting tariffs revenues. 

✅ A rise in bond yields may cause a sharp but shortlived decline in gold. 

🚨 If the Supreme Court rules against the legality of the tariffs, the ruling could be neutralised by the Trump Administration under Section 232 of the Trade Expansion Act of 1962 and other articles granting the US President the authority to impose taxes and duties.

Imagine the market's reaction to the initial ruling and to the follow-up reply from the Oval Office. Do you really think the ruling will take part during market hours?

Careful.

The odds of a Fed rate cut in January fell from 17% earlier in the day to 11% after the release of better than expected Services ISM and somewhat disappointing JOLTS survey on jobs openings. The chart below shows the graphs for expectations of a Fed rate cut for January (Green) and March (White). Focusing on the green graph, see how the probability of a January rate cut fell from 27% in mid December to 11% today, during which the DXY rose while gold also rose. Here is what I think: Even if the Fed ends up holding rates unchanged, expect gold and equities to be propped by an upcoming announcement from Donald Trump revealing his pick for the Fed chairmanship. Looking ahead. Keep an eye on $4400 and $70 as support for gold and silver respectively, with 1.1645 foundation for EURUSD. For equity indices, expect more gains into mid January for now.  Take a look at AAOI here 

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In 2025, EURUSD and DXY were closely correlated to 2017.If 2026 repeats 2018, then USD will do this: Watch the 2 mins video.