April 8 2025

Global Markets Rise Amid Tariff Talks and Trade Tensions

U.S. Students at Bottom See Scores Plummet Since 2013

China Moves to Dominate Biotech as U.S. Lags

Apple Shifts iPhone Production to India to Dodge Tariffs

Trump Escalates Economic War With China Over Tariffs

Florida Gators Clinch NCAA Title in Dramatic Finish

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FLASH…Split US Supreme Court (5-4) supports Trump on deportations under 1798 “Alien Enemies Act”….

1. Global Markets Rise Amid Tariff Talks and Trade Tensions

A. In spite of the spiraling tensions, global markets broadly rose early Tuesday, paring some losses after a bruising three-day selloff. U.S. stock futures pointed higher, after market whiplash Monday ultimately left major indexes largely unchanged. Giving investors some hope, the Trump administration signaled it was open to discussing lower tariffs with Japan, Israel and some other countries. Japanese stocks jumped after Tokyo named a chief tariff negotiator and Treasury Secretary Scott Bessent said the country would be prioritized in trade talks. In recent trading: U.S. stock futures rose. Contracts for the S&P 500, Nasdaq-100 and Dow industrials all gained well over 1%. Treasury yields were little changed. Ten-year yields settled Monday at 4.164%, after their sharpest one-day rise in a year.

B. The S&P 500 has fallen 18 per cent from its February peak. That ain’t that bad. Remember the bear market in the fourth quarter of 2018? No? Many won’t. It doesn’t even have a name. But the market was down 20 per cent. Meanwhile, the decline of 2022 (inflation panic), 2020 (Covid-19) and 2008 (great financial crisis) weighed in at 25 per cent, 33 per cent and 57 per cent, respectively.

C. The market has swung away from a position that looked extreme. A 60/40 index (the classic 60% equities 40% bonds allocation) is the lowest in six months, but no worse than that. Similarly, stocks relative to bonds, as proxied by the popular SPY and TLT exchange-traded funds, have lost a lot of ground, but have held on to most of their post-pandemic gains. Retirement funds haven’t been wiped out. Keep this in proportion; while remembering that there’s also plenty of room below for this to go much further:
Source: WSJ, Unhedged Newsletter, Bloomberg

2. U.S. Students at Bottom See Scores Plummet Since 2013

There was once a time when America’s lowest-performing students were improving just as much as the country’s top students. Despite their low scores, these students at the bottom made slow but steady gains on national tests for much of the 2000s. It was one sign that the U.S. education system was working, perhaps not spectacularly, but at least enough to help struggling students keep pace with the gains of the most privileged and successful. Today, the country’s lowest-scoring students are in free fall. The reason is not just the pandemic. For at least a decade, starting around 2013, students in the bottom quartile have been losing ground on the National Assessment of Educational Progress, a key exam that tests a national sample of fourth and eighth grade students in math and reading.

Source: NYT

3. China Moves to Dominate Biotech as U.S. Lags

China is moving fast to dominate biotechnology, and the U.S. risks falling behind permanently unless it takes action over the next three years, a congressional commission said. Congress should invest at least $15 billion to support biotech research over the next five years and take other steps to bolster manufacturing in the U.S., while barring companies from working with Chinese biotech suppliers, the National Security Commission on Emerging Biotechnology said in a report Tuesday. To achieve its goals, the federal government and U.S.-based researchers will also need to work with allies and partners around the world.
Source: WSJ

4. Apple Shifts iPhone Production to India to Dodge Tariffs

Apple is ramping up iPhone shipments from India to the US as it scrambles to avoid steep new tariffs on Chinese imports under Donald Trump’s latest trade crackdown. The move is a temporary fix while Apple seeks an exemption from the new duties — something CEO Tim Cook successfully secured during Trump’s first term. Trump’s new tariffs slap a 54 percent levy on Chinese goods, while India faces a lower 26 percent rate. Analysts estimate the China tariffs could add $300 to the cost of producing an iPhone 16 Pro, which already costs Apple around $550 to make. Apple now plans to produce 25 million iPhones in India this year, with up to 10 million originally meant for local sale. Redirecting those units could cover about half of US demand, according to Bank of America. The tech giant has been expanding Indian production since 2017 — not just to dodge tariffs, but also to reduce its reliance on China and tap into India’s fast-growing smartphone market. Despite growing investment in India and some US manufacturing, most iPhones are still built in China, where Apple’s supply chain is deeply entrenched. Apple shares have plunged 20 percent over three days — their worst streak in nearly 25 years — as investors fear fallout from the escalating trade war. The president claims his tariffs will encourage domestic manufacturing by increasing the price of foreign products. But since Apple would still need to import the raw materials used to make its devices, experts say there is not an economical way to make iPhones on US soil. Moving iPhone production to America would be a, 'massive, mammoth undertaking,' senior research analyst at brokerage firm Rosenblatt Securities Barton Crockett told the WSJ. 'It’s not clear you can make a competitively priced smartphone here,' he told the outlet. Currently the cost of assembly is around $30 in China, but this would soar by ten times if production moved to the US, Lam explained.
Source: Daily Mail

5. Trump Escalates Economic War With China Over Tariffs

A. Yesterday, China issued Retaliatory Tariffs of 34%, on top of their already record setting Tariffs, Non-Monetary Tariffs, Illegal Subsidization of companies, and massive long term Currency Manipulation, despite my warning that any country that Retaliates against the U.S. by issuing additional Tariffs, above and beyond their already existing long term Tariff abuse of our Nation, will be immediately met with new and substantially higher Tariffs, over and above those initially set. Therefore, if China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th. Additionally, all talks with China concerning their requested meetings with us will be terminated! Negotiations with other countries, which have also requested meetings, will begin taking place immediately

B. Beijing lashed back at President Trump’s threat of even higher tariffs on China, raising the specter of an all-out trade war between the world’s two biggest economies. “If the U.S. insists on its own way, China will fight to the end,” the country's Commerce Ministry said Tuesday. Trump had said he would slap an extra 50% tariff on China if Beijing didn’t drop plans to retaliate against extra levies he announced last week. In a sign Beijing is digging in for a protracted battle, the government threw its weight behind the stock market and devalued the yuan against the dollar, pulling a reference rate below a key threshold for the first time since the fall of 2023.
Source: @realDonaldTrump, WSJ

6. Florida Gators Clinch NCAA Title in Dramatic Finish

With four seconds on the clock, the entire Alamodome stood still. Both Florida and Houston paused. Cougars guard Emanuel Sharp had gone up to shoot a potential winning 3 with 4.9 seconds left but was forced to adjust when Walter Clayton Jr. came flying out to contest. Sharp dropped the ball with 4.2 seconds left, hoping a teammate would pick it up and bail him out. But nobody moved, not a Houston player nor a Florida player. Gators forward Alex Condon finally dove on the ball with 2.0 seconds left, securing it and tossing it toward Clayton. The buzzer sounded, Clayton slammed the ball on the ground, and Houston coach Kelvin Sampson looked on in stunned silence. The Florida Gators were national champions, erasing a 12-point second-half deficit before holding on for a 65-63 win over Houston.

Editors note: I hesitate to bring this up but as mentioned yesterday, I correctly picked all Final Four teams and the champion, Florida. This resulted in a 99.9% bracket and winning all my pools.

Source: ESPN

April 8, 1935: Works Progress Administration established by Congress as part of FDR’s “New Deal”

In November 1932, at the height of the Great Depression, Governor Roosevelt of New York was elected the 32nd president of the United States. In his inaugural address on March 4, 1933, Roosevelt promised Americans that “the only thing we have to fear is fear itself” and outlined his New Deal—an expansion of the federal government as an instrument of employment opportunity and welfare. In April 1935, the WPA was established under the Emergency Relief Appropriation Act, as a means of creating government jobs for some of the nation’s many unemployed. Under the direction of Harry L. Hopkins, the WPA employed more than 8.5 million persons on 1.4 million public projects before it was disbanded in 1943. The program chose work that would not interfere with private enterprise, especially vast public building projects like the construction of highways, bridges and dams. However, the WPA also provided federal funding for students, who were given work under the National Youth Administration. The careers of several important American artists, including Jackson Pollack and Willem de Kooning, were also launched thanks to WPA endowments. Its programs were extremely popular, though, and contributed significantly to Roosevelt’s landslide reelection in 1936.

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Sources

1. https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-08-25?mod=WSJ_home_supertoppertop_pos_1, Unhedged newsletter, https://www.bloomberg.com/opinion/newsletters/2025-04-07/there-s-no-sign-that-markets-have-had-enough-yet
2. https://www.nytimes.com/2025/04/07/us/low-performing-students-reasons.html
3. https://www.wsj.com/tech/biotech/china-biotech-industry-research-threat-e91dddd6?mod=hp_lead_pos10
4. https://mol.im/a/14581015
5. https://truthsocial.com/@realDonaldTrump/114297331052690348, https://www.wsj.com/livecoverage/stock-market-trump-tariffs-trade-war-04-08-25?mod=WSJ_home_supertoppertop_pos_1
6. https://www.espn.com/mens-college-basketball/story/_/id/44580884/florida-rallies-once-again-beat-houston-ncaa-title