Trump will retaliate to VAT. This is potentially catastrophic for EU exporters
*TRUMP: VAT TAX WILL BE VIEWED AS A TARIFF *TRUMP: WILL CONSIDER COUNTRIES THAT USE VAT *TRUMP: PROVISIONS WILL BE MADE FOR NON-MONETARY TARIFFS The VAT response is notable because the tariff differential for the EU, for example, with and without VAT is massive and rises from just 2% (without VAT) to a whopping 18% with! And judging by Trump's comments, which said that the EU is "absolutely brutal" on trade, the inclusion of VAT is precisely meant to punish Europe. The chart below shows the amount that each country's VAT exceeds the US sales tax. And so, if indeed Trump imposes a reciprocal tariff policy also accounted for foreign VATs, it could add another 10% to the average US effective tariff rate. That could be catastrophic to exporters, and Deutsche Bank's George Saravelos agrees writing that if reciprocal tariffs are applied on a VAT basis, "European countries would be much higher on the list of impacted countries given high consumption taxes." Like Goldman, the DB strategist notes that the overall US tariff rate would increase by more than 10% Source: zerohedge
EGGS-ORBITANT! PRICES CRACK NEW RECORDS AS BIRD FLU STRIKES
A dozen eggs now costs $4.95 - up a shell-shocking 238% since 2021. U.S. farms forced to eliminate 34M hens in recent months as bird flu decimates supply chains. USDA Report: "The timing and scope of HPAI outbreaks has created an imbalance in the nation's supply of table shell eggs" While Americans aren't exactly walking on eggshells about cheese (1%) and bananas (4%), other staples like coffee (53%) and beef (40%) continue to burn holes in wallets. Source: Statista
2025 US earnings estimates are tracking above the typical path.
Source: Goldman Sachs via @MikeZaccardi
US inflation decline has slowed but is NOT re-surging:
US inflation metrics which exclude outliers and one-time bumps as still declining but at a slower rate. January is also the seasonally worst month as firms tend to announce price raises at the start of the calendar year. Source: Global Markets Investor
Goldman's basket of Ukraine reconstruction beneficiaries has dramatically outperformed defence stocks since Trump's election.
It's composed of industrials/infrastructure stocks. Source: www.zerohedge.com, Goldman
GameStop surged +20% on news it is considering buying Bitcoin with its $4.6 BILLION cash balance.
Source: Radar 𝘸 Archie
The success of Chinese artificial intelligence (AI) start-up DeepSeek is prompting investors to reassess the nation’s technology companies.
The Hang Seng Tech Index, whose biggest members include Tencent Holdings, Alibaba Group Holding and Xiaomi, approached a four-month high on Thursday, after rallying more than 10 per cent over the past two weeks, while the broader Hang Seng Index climbed about 6 per cent. As shown on the chart below, the valuation gap between Chinese stocks and the Mag7 remains massive. Source: Compounding Quality @finvibe
We don't necessarily see many China cars in so-called "developed countries".
But in the rest of the world, the number of Chinese cars we can see on the road is shocking. No surprise to see the numbers of Chinese cars exports skyrocketting as shown on this chart courtesy of Lyn Alden.
