Worth a Watch - Investing

Week of March 3, 2025

https://www.youtube.com/watch?v=Qv4qPPj5wI4&t=346s

*The White House has a higher tolerance for a selloff in stocks than market participants may think. That's according to

Market Reaction to Trump 2.0: The Dow is flirting with negative, S&P 500 is down 2.5%, and Nasdaq is down over 6%. Market activity has been volatile due to frenetic policy moves from Washington.
Treasury Secretary's Market Savviness: Scott Bessant, former Soros CIO, is regarded as one of the most market-literate Treasury Secretaries, closely monitoring macro indicators and the 10-year Treasury yield.
Trump Administration’s Market Sensitivity: Trump and Bessant are highly sensitive to market fluctuations but are more tolerant of broader asset class pain, implying strategic interventions when necessary.

Rate Cut Predictions: The market is pricing in three rate cuts in 2025, but Soros' CIO disagrees, expecting a higher pain tolerance from policymakers before interventions occur.
Regulatory Adjustments to Boost Treasury Demand: The administration is expected to modify bank regulations (Supplementary Leverage Ratio) to encourage banks to buy Treasuries, reducing reliance on hedge funds.
Treasury Trading Strategy: Soros Fund has been buying Treasuries during volatility, especially when yields spiked, but is taking profits as yields fall. They plan to continue trading volatility in the bond market.

Hong Kong Equities Tactical Trade: Soros Fund bought call spreads on Hong Kong equities, anticipating a tactical U.S.-China deal that could drive capital back into Chinese markets.
Mag 7 Tech Stocks (e.g., Tesla, Nvidia): The CIO sees the recent 13-40% selloff as a buying opportunity due to the strong earnings power of these companies.

Oil & Russia: A potential Trump-brokered peace deal with Russia-Ukraine could impact oil markets by increasing Russian oil supply, pushing prices lower.
European Bond Market Risk: Higher EU defense spending (2.5-3% of GDP) will significantly increase bond issuance, potentially leading to failed auctions within 12-24 months. UK and France are the most vulnerable.