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Hello from sunny Riviera Maya, Mexico.
Markets opened the week with continued volatility, as geopolitical tensions and evolving central bank dynamics weigh on investor sentiment. Monday’s live session focused on key developments in the U.S.-China trade standoff, the implications of political pressure on the Federal Reserve, and how assets like Gold and Bitcoin are responding.
Market Overview
The S&P 500 was trading down ~2%, while the NASDAQ dropped ~2.5%. Both indices have now formed a "death cross," a technical pattern typically associated with sustained downside momentum.
NVIDIA traded below the critical $100 threshold. With technical support around $93, I may begin accumulating shares in small tranches, balancing near-term volatility with a long-term outlook.
Tensions escalated on the geopolitical front, with China threatening retaliation against nations perceived to be aligning with U.S. trade policies. These developments raise the risk of economic fragmentation along political lines.
The Fed Under Pressure
Former President Trump intensified criticism of Federal Reserve Chair Jerome Powell, calling for his dismissal amid frustration over interest rate policy.
If Powell were removed, it would severely undermine confidence in the independence of U.S. monetary policy. Market reaction could include a sell-off in both equities and U.S. Treasuries, with capital flight into safe-haven assets such as gold and Bitcoin.
The Fed’s most effective remaining tool appears to be expectation management—guiding markets through carefully framed communication, rather than direct action.
Bitcoin: A Decoupling Moment?
Bitcoin rose over 3.5% during the live stream, testing a major resistance level: its 200-day moving average. Momentum indicators (MACD and RSI) turned bullish.
This may signal a break from Bitcoin's recent positive correlation with equities, reestablishing its role as an inflation and uncertainty hedge.
I am looking to add a modest position in Bitcoin as part of a broader risk-off hedge.
💸 Gold Continues to Shine
Gold surged above $3,400, with increasing signs that central banks and sovereign funds are rotating out of Treasuries and into hard assets.
I maintain exposure through GLD, the gold ETF.
📊 Treasury Yields and Market Sensitivity
The 10-year Treasury yield rose to 4.38%, a level that suggests significant selling pressure in the bond market.
Higher yields elevate mortgage rates and borrowing costs, creating additional drag on consumer demand and corporate margins.
📈 Portfolio Positioning
Core Holdings (Barbell Strategy):
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