The gift of a Bear rally

President Trump has underscored his mercurial nature with a "pause" on the tariff War on Everybody, with the exception of China. I will be a seller of this Bear market rally.

The Great Trump Bear Market is apparently over now.

The Great Trump Bear Market was way too short to fool this crusty old crustacean.

With one whimsical tweet on Truth Social, all that is broken in international trade relations is now mended, and we are back on track for a Great America!

The “issue” seems to be a “lack of respect” from China.

The Rest of the World has a temporary reprieve, it would seem. China has none and is looking at higher tariffs due to their lack of respect, in the eyes of President Trump.

None of this looks like Peace in our Time, to me.

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Last night, Apple XNAS: AAPL bounced a huge 15% and stalled right on cost basis.

The market rallied hugely, and I will sell into this bear market rally.

Earlier, I said that I do not like selling into weak markets.

That remains true, but bear rallies represent welcome periods of strength into which one can sell without chasing the bid down. This rally may go on for a day or so, but my plan is simply to sell into it. Cash is extremely valuable at this time.

President Trump went wild setting tariffs on everybody. Then the US Treasury bond market made a huge move upwards in yield going into a bond auction.

I will not say Trump “panicked” but he did decide to step back from Armageddon.

Knowing Trump, this is a temporary respite on most of the world, and a ratchet up on tariffs applied to Chinese imports. That rate now sits as 125%. The question to ask is what markup US distributors and marketers apply to Chinese made products.

The regular retail markup is around 30%, but I think that from the start of the Chinese supply chain, at the factory gate in Guangzhou, to Main Street USA, I suspect it looks more like 900% beginning to end. Nike sneakers retail for $200 USD but likely earn the factory owner $20 USD. The rest is margin that goes to Nike USA, and others.

It may look like the worst is over, but I think that the loser is fat profit margins in US multinationals. The rhetoric of President Trump singles out foreign manufacturers as rapacious profiteers from the US market. The profit goes to Americans.

Once S&P 500 multinationals own up to the margin damage this market will fall.

There will be time enough for this market to find a bottom.

I do not need to be there on the way down.