The Stable Genius Report

• New UNITED STATES TARIFF Letters and/or Deals will be delivered.
• The deliveries will commence on Monday, July 7th, at 12:00 P.M. Eastern.
• These actions concern various countries globally.

The implementation of new tariffs or trade deals can significantly affect S&P 500 companies by altering input costs, affecting demand for goods, and disrupting established supply chains, leading to uncertainty and potential re-pricing in affected sectors.

The announcement of new tariff letters or trade deals targeting various countries could prompt retaliatory measures or disputes, potentially elevating international trade tensions and impacting diplomatic relations globally.

• Commodities: Tariffs could impact demand for industrial commodities like Copper due to potential slowdowns in global manufacturing. Gold (XAU) might rise as a safe-haven asset if trade tensions escalate, while oil (WTI) could react to global growth concerns or supply chain disruptions. Short-Term Watchlist: XAU/USD price action, headlines on trade negotiations. Medium-Term Focus: Global growth projections, USD strength, supply chain resilience.
• Currencies (Forex): The US Dollar Index (DXY) could strengthen as a safe-haven asset or weaken if tariffs lead to a slowdown in US economic activity. Currencies of countries targeted by tariffs or those heavily reliant on global trade (e.g., CNY, EUR, JPY) could face depreciation pressure. Short-Term Watchlist: DXY reaction, USDCNH movements, statements from central banks. Medium-Term Focus: Trade balance shifts, capital flows, relative economic performance.
• Global Equities: S&P 500, Nasdaq, STOXX 600, Nikkei 225, and Hang Seng could experience volatility. Export-oriented sectors, technology, and manufacturing stocks might see negative impacts, while domestic-focused sectors might be less affected. Overall risk-off sentiment could prevail. Short-Term Watchlist: Futures open, VIX spike, performance of multinational companies. Medium-Term Focus: Earnings revisions for trade-exposed firms, PMI data globally, investor sentiment.
• Fixed Income (Bonds): US 10Y and 2Y yields could fall as investors seek safety in US Treasuries amidst increased trade uncertainty, leading to a flight to quality. Credit spreads for corporate bonds, especially those of companies exposed to tariffs, might widen. Short-Term Watchlist: UST 10Y yield levels, bond ETF flows. Medium-Term Focus: Central bank policy responses to economic slowdowns, inflation expectations.
• Volatility / Derivatives: The VIX is likely to spike, reflecting increased market uncertainty and fear regarding the impact of new tariffs on corporate earnings and global growth. Options positioning could reflect increased demand for downside protection. Short-Term Watchlist: VIX levels, implied volatility in equity indices. Medium-Term Focus: Structural shifts in volatility regimes, macro policy uncertainty.
• Crypto / Digital Assets: Bitcoin (BTC) could behave as a risk-off asset if traditional markets face significant downturns due to trade tensions, potentially seeing inflows as an alternative store of value. However, it could also correlate with tech stocks and decline if overall risk appetite falls. Short-Term Watchlist: BTC/USD price action, correlation with Nasdaq. Medium-Term Focus: Macro liquidity backdrop, regulatory clarity, institutional adoption trends.
• Cross-Asset Correlations and Systemic Risk: Normal correlations could be tested, with equities and bonds potentially selling off together in a 'bad' deflationary shock scenario, or equities falling while bonds rally. Liquidity stress could emerge in specific sectors or markets heavily reliant on global trade. Short-Term Watchlist: MOVE index, credit default swap spreads. Medium-Term Focus: Supply chain vulnerabilities, central bank liquidity operations.
• Retail Sentiment / Market Psychology: The announcement could trigger retail speculation in specific sectors perceived to benefit or be harmed by tariffs. General market anxiety might increase, influencing retail trading behavior toward defensive assets or short-term speculative plays. Short-Term Watchlist: Social media trends, discussions on trading forums. Medium-Term Focus: Behavioral finance implications of trade policy, sentiment-driven market movements.