Beijing Braces for US Trade Deals That Aim to Shut Out China - Bloomberg
The US-Vietnam trade deal is aimed at isolating China primarily by targeting the use of Chinese components in goods exported from Vietnam to the US. The deal imposes a tiered tariff system where Vietnamese exports containing Chinese inputs face higher tariffs—20% generally, and up to 40% on goods suspected of being transshipped from China through Vietnam with minimal processing. This is designed to prevent Chinese products from bypassing US tariffs by routing them through Vietnam, a practice that increased after earlier US-China trade tensions led companies to relocate production to Vietnam. The US strategy behind this deal is part of a broader effort to reshape global supply chains into "trusted" networks that exclude Chinese firms and reduce China's role in international trade. The Trump administration has pushed trading partners like Vietnam to cut back on imports from China and control their supply chains more tightly to avoid facilitating Chinese goods entering the US market indirectly.
‼️ The IBM revival. The stock has doubled over the past 18 months, breaking through its historic ~$250bn market cap ceiling from 1999 and 2012.
So how can we explain such a comeback for this iconic company? It is primarily due to its successful transformation into a leader in enterprise artificial intelligence (AI) and hybrid cloud solutions, which has driven strong financial performance and investor confidence. Key factors behind this surge include: ▶️ Strong AI and Cloud Growth: IBM's AI business bookings have surged to over $5 billion, growing nearly $2 billion quarter-over-quarter, and its Red Hat subsidiary, a major hybrid cloud platform, grew 17% in a recent quarter and is expected to contribute $3 billion in revenue this year. This software-led strategy and expanding AI capabilities have been pivotal. ▶️Robust Financial Results: IBM reported solid earnings beats and a bullish 2025 forecast with expected revenue growth exceeding 5% and free cash flow growing even faster, targeting about $13 billion in free cash flow.
In case you missed it... Copper is up +29% year-to-date.
Better than gold.
BlackRock's Bitcoin ETF drives more revenue than its S&P 500 fund.
Blackrock makes 0.25% fees on their IBIT ETF. That currently translates to $184 million in annual revenue (just for custody) and it's based on AUM (assets under management.) Source: Bloomberg
A golden cross for the S&P 500 (the S&P 500's 50d moving average has crossed above its 200d moving average).
Source: Bloomberg, Kevin Gordon
UK 30yr gilt yields soaaaaaaaaring
Source: Bloomberg, Mike Bird @Birdyword
Another Liz Truss Moment in the UK? 10y Gilt yields jump 16bps on doubts over Chancellor Reeves’s future.
The yield on 30y gilts rose >20bps past 5.4%. Source: Bloomberg, HolgerZ
Vietnam is to pay 20% tariffs on all goods sent to the US. Meanwhile, the US will get total access to the Vietnamese markets - they can sell US products there for 0% tariffs.
Moreover, the US will charge Vietnam a 40% tariff on 'any transhipping', a steep levy that could rattle countries still hoping to secure significant relief from Trump’s 'liberation day' tariffs. Source: FT
