February 4, 2025

Markets:

S&P 500 futures moved slightly higher on Tuesday as Wall Street tries to find stable footing following the latest developments on the global trade front.

The Chinese government slapped tariffs of up to 15% on U.S. imports of coal and liquefied natural gas and 10% higher duties on crude oil, farm equipment and selected cars, effective Feb. 10.

The move comes after the U.S. agreed to pause more aggressive levies on Canada and Mexico. Canadian Prime Minister Justin Trudeau announced in a post on social media site X on Monday evening that Trump agreed to halt the implementation of tariffs against Canada for at least 30 days. Earlier on Monday, Mexican President Claudia Sheinbaum announced that duties on Mexico imports to the U.S. would also be halted for a month.

Stocks are coming off of a volatile trading session, in which the major averages made a striking turnaround after an initial global sell-off. At its session low on Monday, the 30-stock Dow fell more than 600 points, or nearly 1.5%, after Trump signed an order over the weekend to impose 25% tariffs on Mexico and Canada, plus a 10% levy on China. Investor sentiment turned around on Monday afternoon, however, after Trump said the duty on Mexican goods would be would be paused.

On the economic front, the Job Openings and Labor Turnover Survey for December is due on Tuesday, as well as durable orders. The main event this week will be Friday’s January nonfarm payrolls report, which will add further clarity to the employment picture.

Portfolio:

We enter this new trading session holding setups in SOXL, ASAN, and S.  Today it's all about GOOGL and AMD to us and look forward to their earnings tonight. Yesterday was another reminder on how any narrative they are trying to push for downside movement continues to be bought up and used as the next floor. Understand where we are with this cycle and as soon as this daily movement is cleared up with Tariff negotiations and we eliminate this headline risk – we will have months of clear runway to attack with this market. It's setting up. It's clear technically, Market breaking over 600 can see 604 and 607 above. Bears will need 595 short term. Keep it very simple right now. Do not over think this and follow the overall trend and focus on flow – which we will provide constant updates on. Be ready.