Here's the Deal - April 22, 2025

Economy: In early Recessionary Phase (Not necessarily a recession, yet.)

Market Cycle: In Correction. Confirmed Bear Market, but showing signs of life.

_{Week 16 of 52 for 2025: 30.77% of the way through 2025}

Table of Contents

• Last suggestion continues to win in Trump’s world.

• Where are the signed trade deals?

• Expect trade deficits to continue. Regardless of t …

• Increasing corruption.

• Uncertainty Rising

• Earnings Season

• Significant Economic Data from the previous week:

• Economic Data to watch this week:

• Quote of the Week:

Weekly Note:

A mid-week edition of Here’s the Deal, and it’s a good thing it’s late as Trump just caved on both China rhetoric and tariff size as well as trying to fir Jerome Powell.

Thankfully, sanity won the day as Trump’s trade war was still dragging on, and the new twist was ramping up in Trump’s effort to take control of the Federal Reserve and bring it under the authority of the Executive Branch. That would mean future presidents could also influence interest rates to serve their own political agendas.

What could possibly go wrong?

At the same time, there’s a growing sentiment among Americans that the country would be better off with more manufacturing jobs… Just as long as they don’t have to do them.

Or, to put it another way…

Meanwhile, tariffs are being sold as a win for American manufacturing, but the reality on the ground tells a different story. As more U.S. manufacturer’s announce layoffs of assembly workers, citing the impact of tariffs.

Even with the Trump capitulation today, expect layoffs to accelerate in the coming months as the current credit cycle continues to wind down.

Last suggestion continues to win in Trump’s world.

We got more confirmation last week that President Trump tends to lead by impulse rather than strategy as he has been known for sometime now to often side with whoever spoke to him last. This type of management style is consistent with the wild swings in his policy direction. Thankfully, it appears that Scott Bessent and Howard Lutnick are now joining forces behind the scenes to rein in the influence of pseudo-expert in trade policies, Peter Navarro.

Where are the signed trade deals?

The Trump Administration has been stating that it is now negotiating trade with a broad group of countries. Specifically, President Trump and others in his administration have stated that more than 75 countries have reached out to the United States to negotiate trade deals following the imposition and subsequent 90-day suspension of country-specific reciprocal tariffs (excluding China).

Several countries have reportedly made explicit offers to negotiate trade with the United States under the Trump Administration's recent tariff regime. According to official statements and reporting, the following countries have been publicly identified as having made direct offers or initiated formal negotiation requests:

• Israel: Prime Minister Netanyahu has visited the U.S. and expressed a desire to quickly negotiate a trade deal to eliminate Israel's trade deficit with the U.S.

• European Union: The EU, represented by President Ursula von der Leyen, has proposed "zero-for-zero" tariffs on industrial goods in response to U.S. tariffs.

• Japan: Japan is sending a top delegation to negotiate after discussions between President Trump and Prime Minister Shigeru Ishiba, with a focus on removing tariffs and offering concessions on LNG and automobiles.

• Bangladesh: The Bangladeshi government has requested a three-month suspension of tariffs and pledged to increase imports of American goods.

• Cambodia: Cambodia’s commerce ministry has offered to reduce tariffs on U.S. goods in exchange for lower U.S. tariffs.

• United Kingdom: British officials are negotiating to eliminate or reduce U.S. tariffs on U.K. goods, with talks already underway.

• Vietnam: Vietnam has proposed eliminating all tariffs on U.S. goods in exchange for a temporary pause on tariffs imposed on its exports.

• India: Indian officials have indicated a preference for dialogue and negotiation rather than retaliation.

• Taiwan: Taiwan has announced it will not impose retaliatory tariffs and aims for zero tariffs with the U.S., along with increased investments.

• Indonesia: Indonesia plans to send a delegation to negotiate, seeking a diplomatic resolution to the tariffs.

• South Korea: Scheduled to meet with U.S. officials to discuss tariff relief.

• Malaysia, Thailand: Both have been identified as countries the U.S. is seeking deals with, and are likely engaged in discussions

The administration says they are prioritizing negotiations with these countries, and has stated that the best deals will be reserved for those first in-line to negotiate.

Vice President JD Vance also announced this morning the the US and India have “officially finalized the terms of reference for the trade negotiation.”

However after this afternoons announcement by Trump, it now seems as though China is taking center stage in trade negotiations as it has also now been reported that Trump and Xi are going to meet in early May.

Expect trade deficits to continue. Regardless of trade negotiation outcomes.

Even with new trade deals, the U.S. is still likely to run trade deficits. Why? Because Americans spend far more on services than goods. And that’s a trend that’s been growing since the 1970s. In other words, our trade deficit has more to do with the structure of our own economy and consumer habits than with “bad trade partners” trying to take advantage of us.

But acknowledging that would require Americans to look inward and take some accountability. But let’s be honest, it’s a lot easier to blame the ghosts of trade deal’s past than it is to take accountability.

As Charlie Bilello accurately pointed out, “As the U.S. has gotten significantly wealthier over the last 85 years, we’ve transitioned to a service-driven economy. This is a good thing.”

Unfortunately, truth doesn’t go viral as easily as outrage and it rarely wins elections like fear and revisionist history do.

Increasing corruption.

Trump’s recent moves of backing down on extreme tariff rates and trying to fire the Federal Reserve Chair (a power he’s currently asking the Supreme Court to approve) reveal more than just erratic policy. They show weakness as a negotiator and raise serious concerns about executive overreach and corruption.

Any decent salesperson and/or negotiator knows: you don’t negotiate with yourself. Yet that’s exactly what Trump did by setting aggressive trade terms, then walking them back just two weeks later when talks stalled. It undermines credibility and shows a lack of strategy.

To make matters worse, we learned that Scott Bessent told a very small group of investors to expect a de-escalation in Trump’s trade war yesterday, before Trump made the announcement to the public today after markets closed. That closed-door comment was made at a JPMorgan investor summit in D.C., giving those in attendance a chance to front-run today’s announcement which was made after the markets closed.

Combine that with recent pardons of individuals convicted of defrauding investors, and the memecoin pump-and-dumps tied to Trump and Melania the week of the inauguration, the scaling back on enforcement of white-collar crimes, and it’s becoming harder to ignore how sleazy this administration is beginning to look, even to some of its most loyal supporters.

If this administration genuinely cares about the long-term future of the U.S., it will take swift action to clean this up. If not, expect the slide to continue and for this to devolve into a full-on grift.

Uncertainty Rising

All of this is fueling a growing sense of uncertainty, driven by the extreme tariff rates being proposed and the ongoing chaos in how those policies are communicated.

Earnings Season

Earnings season is here again, and this one matters. Pay close attention to how many companies are either lowering their guidance or scrapping it entirely. That’s often a signal of deeper concerns, and in this case, it’s largely due to the uncertainty caused by tariffs and the constant confusion surrounding their implementation.

Markets:

Stocks gapped up as expected last Monday morning, and proceeded to get sold from the get go and continued to perform weak in the shortened week of action.

However, markets still look ripe for a sharp move higher as the massive move from April 9th’s tariff reprieve announcement continues to consolidate.

Now, with the pivot from Trump on both China tariffs and attempting to fire Fed Chairman Jerome Powell, markets could get the boost they need to once again begin trending up.

$SPY ( ▼ 0.08% ) S&P 500:

Bullish above $530ish. Bearish below $518.50ish.

Getting back above $550 - $565 is going to be the key. Expect some resistance there initially, which may turn into a new opportunity to once again increase risk.

$DIA ( ▼ 0.29% ) Dow Jones Industrial Average:

Bullish above $400ish. Bearish below $390ish.

Resistance at $420ish. Expect some resistance there initially, which may turn into a new opportunity to once again increase risk.

$QQQ ( ▲ 0.33% ) Nasdaq:

Bullish above $452ish. Bearish below $435.50ish.

Resistance between $470 - $485. Expect some resistance there initially, which may turn into a new opportunity to once again increase risk.

$IWM ( ▼ 0.52% ) Russell 2000 (Small Caps):

If above $187ish, then looking for $200ish. If it can hold $200ish, then looking for $210ish.

Resistance between $190 - $197. Expect some resistance there initially, which may turn into a new opportunity to once again increase risk.

At this point, I still believe the next significant move in markets is higher in the short term. But I’m not convinced that the real low for this period has been achieved.

Significant Economic Data from the previous week:

Economic Data to watch this week:

Quote of the Week:

Click the Leave a comment button if you have any questions or comments, or need something clarified. Don’t be shy. The main point here is to improve constantly. Questions and comments help us both and tells me what you are interested in learning/hearing more about.

If you enjoyed this post or found it useful, do me a favor and hit the like (heart button all the way back to the top of the post and to the left) and share it with others.

Learn. Improve. Pass on.