The Day After “Liberation Day”

The Day After “Liberation Day”

Feeling liberated yet?

The president’s “Liberation Day” tariff announcement has come and gone.

We won’t dwell on who and what are being taxed and by how much. You can read that anywhere.

Our task today is to do a damage assessment in the markets — and find a “why” beyond the caterwauling you hear from the mainstream about how Donald Trump “just dropped a nuclear bomb on the global trading system,” as Harvard economist Ken Rogoff wailed to the BBC.

Today is on track to be the U.S. stock market’s worst day of 2025 — and a closer look at the second-worst day offers some insight.

Up to now, the S&P 500’s biggest one-day loss this year came on Monday, March 10 — a 3.2% drop. That was the day after the president did an interview with Maria Bartiromo on Fox News.

The headline nearly everyone took away from that interview was that the president would not rule out the prospect of a recession early in his term. His policies, he said, might require a “period of transition.”

But the prospect of a recession was always in the cards. The president saying so was anticlimactic.

Instead, there was another part of the interview that seems to have touched off the “whoosh” on March 10.

It went like this…

Bartiromo: And yet then you come back and you change it up with these tariffs, and you said to me at that time, I did it because I can. I put an amendment in there, and I said, in six years, I can change it. But I think CEOs want to see predictability. They say, look, I have to speak with shareholders. I have got to make plans for capex spending. I can't if it's 20% one day and then it's off for a month and it's 25%.

Trump: Yes.

Bartiromo: So can you give us a sense of whether or not we are going to get clarity for the business community?

Trump: Well, I think so. But the tariffs could go up as time goes by, and they may go up. And I don't know if it's predictability. I think –

Bartiromo: So that's not clarity.

Trump: No, I think that they say that. You know, it sounds good to say. But for years, the globalists, the big globalists, have been ripping off the United States. They have been taking money away from the United States. And all we're doing is getting some of it back.

It was a frustrating exchange to watch. Bartiromo kept harping about clarity, clarity, clarity and not getting to the crux of the matter.

A better line of questioning would have been: “Mr. President, somewhere in Pennsylvania there’s a small manufacturer employing 75 people who relies on one imported part to make his product. He doesn’t know from one day to the next whether the tariff is going to be 10%, 50% or nothing at all. He doesn’t know whether to follow through with plans to expand or if he should be letting people go instead. What can you tell him to put his mind at ease?”

But no, Bartiromo framed it in terms of the mega-corp CEOs with whom she’s been much too cozy over the course of her journalism career — and Trump grabbed the opening to fall back on his comfortable talking point about “the globalists.”

In any event, mega-corp CEOs had no more “clarity” after that interview than the small-business owner in Pennsylvania. The S&P 500 fell 3.2% on that Monday.

As I said earlier this week, it comes back to that old market truism about how companies can adjust to bad news — but they can’t handle uncertainty.

Something similar seems to be in play today. Read on…

OK, Is This Permanent?

Right or wrong, the sense in corporate America is that despite the sweeping announcement, this tariff regime might not be permanent. So more uncertainty.

Carlos Gutierrez — a former CEO at Kellogg’s and Commerce Secretary during George W. Bush’s second term — gave voice to that sense last night on CNBC.

"I would assume that this will not be in place in a month, two months. Definitely not in the back half of the year. So I'm in the camp that this is at the beginning of a big negotiation."

Gutierrez is hardly alone: “Eye-watering tariffs on a country-by-country basis scream ‘negotiation tactic,’ which will keep markets on edge for the foreseeable future,” says Adam Hetts, a portfolio manager at Janus Henderson.

“Fortunately, this means there’s substantial room for lower tariffs from here, albeit with a 10% baseline in place,” he tells InvestmentNews.

Trump’s own people are helping to reinforce this impression…

“Certainly the president is always up to take a phone call, always up for a good negotiation,” said White House spokeswoman Karoline Leavitt on Tuesday, even as she allowed that “he is very much focused on fixing the wrongs of the past.”

Amid that uncertain backdrop, Liberation Day has given way to Liquidation Day.

As we write, the S&P 500 is down 4.2%. At 5,433, the index is back to levels last seen in September (and first seen in June). The Dow’s losses on the day are narrower, the Nasdaq’s steeper.

Gold is all over the place today — back under $3,100 at one point but $3,128 at last check. As it turns out, gold is not subject to the tariffs. Tariff worries were one reason that earlier this year gold was flowing out of vaults in London and into vaults in New York.

Alas, silver’s getting clobbered — down $1.63 or 4.8% to $32.22.

Crude’s getting smashed even worse — down $5.46 or 7.6% to $66.25. Several of the OPEC+ nations announced they’re raising production, but that announcement seems unrelated to tariffs.

Bitcoin is losing ground, back to $81,503.

Beyond today, the tariff regime will create winners and losers. Colleague Sean Ring breaks them down as follows…

Winners: Domestic manufacturers, commodity producers, select financials (benefiting from lower long-term rates)

Losers: Multinationals with complex global supply chains, consumer-facing importers, foreign exporters reliant on the U.S. market

Sean’s entire Rude Awakening today is worth a look — to supplement our own musings here.

Let’s move on to other matters, and for that I turn it over to Emily…

Your Access to a Private Paradigm Call

Proving there are still profitable, investable ideas out there, we convened for our internal Paradigm editorial meeting on Wednesday morning — where, for example, hedge fund veteran Enrique Abeyta put the Magnificent 7 stocks under the microscope.

The so-called “Mag 7” — Google (Alphabet), Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — were market (and financial media) darlings last year, propelling stock indexes to new highs.

“All they did was go up,” Enrique notes. And who wants to buy at the top? Recently, however, with their collective pullback, these stocks have become far more intriguing.

Instead of betting on a synchronized rebound for the Mag 7, he predicts divergence: Some will recover faster and higher than others. Google, he says, stands out as the biggest bargain among this group of stocks.

“I think we’re having that moment in Google right now,” Enrique says, emphasizing Google’s valuation at 15x next year’s projected earnings — a stark contrast, for instance, to Microsoft’s 26x earnings.

As for the rocket ship Nvidia, Enrique remains skeptical about its sustainability. “I still think Nvidia goes to $80 a share,” he adds — this from the man who, in October 2024, predicted NVDA would lose $1 trillion in market cap in 2025. (Yes… and then some!)

[If you have any money in the markets — especially in AI stocks — please click here.

Because, according to Paradigm’s Enrique Abeyta, Elon Musk’s latest invention is about to trigger a $2.2 trillion disruption in the AI market over the next 12 months, sending many popular AI stocks crashing. Yes, including Nvidia.

And we could be witnessing market events unwinding now. Learn how to prep your portfolio here, and get all the details from Enrique himself.]

The conversation then shifted to Tesla…

Wall Street was abuzz yesterday after Politico reported Elon Musk would step down from his role at DOGE (Department of Government Efficiency), but Paradigm analysts were more measured — and, frankly, unconvinced.

“Name one time when Musk has thrown up his hands and walked away from a potentially profitable situation,” says our vice president of research, Aaron Gentzler.

In fact, Aaron put Commerce Secretary Howard Lutnick in the frame as Trump’s most likely scapegoat — and there might have been a gentleman’s wager placed on that probability.

Meanwhile, CBOE options-trading veteran Alan Knuckman notes Tesla’s unique position as the only American car company unaffected by tariffs due to its lack of imported parts.

But Jim Rickards’ chief analyst Dan Amoss cautions against overestimating Tesla’s near-term potential, pointing to worse-than-expected delivery numbers and looming cash flow challenges.

“I don’t think there’s economic justification for [Tesla’s] current numbers,” says Dan, “even factoring in [Optimus] robots.”

But it wasn’t all skepticism. Enrique shared his personal enthusiasm for Tesla vehicles: “Everyone I know [who owns one] absolutely loves them… They’re an incredible value.”

Still, he suggests a potential bull-versus-bear debate on Tesla might be worth exploring. (Stay tuned.)

From tech giants to gold miners, the meeting also touched on Newmont Corp., a company that’s had its share of ups and downs despite gold’s strong performance.

Alan notes that Newmont is 20% off its highs and could see accelerated earnings growth if North American fund managers take notice.

However, Dan highlights investor hesitancy stemming from Newmont’s acquisition of Newcrest Mining Ltd., which required unexpected cash injections to keep mines operational.

Despite these challenges, Paradigm’s mining expert — and self-described “rock kicker” — Byron King reassures that the broader gold bull market remains intact: “The price could retreat to $3,100 or even $2,900,” he says, “but it’s not going to stay there for long.”

As for key takeaways, Paradigm’s team left us with much to consider: undervalued tech stocks like Google, Tesla’s — and Musk’s — uncertain path forward and opportunities in gold mining despite sector-specific challenges.

As always, their insights remind us to look beyond the noise and focus on fundamentals.

“Less Cowboy, More Wall Street”

“Crypto might be the only thing that Democrats and Republicans both like right now,” says Paradigm’s longtime crypto advocate Chris Campbell. “The reason is simple: They realize the U.S. blew it.

“Over the past four years, while Washington was busy throttling the crypto industry with lawsuits and vague regulations, places like Singapore, Dubai and the Emirates ran circles around us.

“Back then, it looked like most of the innovation would happen outside of the U.S.,” Chris says. “Now there’s a massive reversal… and the U.S. is quickly gaining the upper hand…

• “A new Crypto Task Force led by Commissioner Hester Peirce has been formed within the SEC to create a regulatory framework for digital assets,” Chris notes

[For what it’s worth, Ms. Peirce seems like a good egg. In 2020, for instance, she opposed the SEC’s Consolidated Audit Trail (CAT), warning against the dangers of “untargeted government surveillance programs.” Sadly, her dissent was a minority opinion.]

• “The House of Representatives passed H.J. Res. 25 with strong bipartisan support (216 Republicans and 76 Democrats) to repeal the IRS rule applying broker tax reporting requirements to certain DeFi providers

• “Finally, the Senate Banking Committee passed the GENIUS Act, a bipartisan bill to create a regulatory framework for stablecoins.

“And this last bullet point,” says Chris, “is what we’re paying close attention to…

“Stablecoins were once considered crypto’s least sexy product. Dollar IOUs on the blockchain. Digital duct tape. The rails nobody sees but everyone uses.”

However? “They might just be the backbone of global finance,” Chris asserts. About stablecoins: They’re pegged to traditional fiat currencies, including the U.S. dollar.

“The U.S. government loves stablecoins,” Chris adds. “But institutions and retail love them, too.

“In April 2022, stablecoin supply peaked at $187 billion right before Bitcoin topped,” he continues.

“Now? We’re a little over $200 billion. On Ethereum [blockchain infrastructure] alone, it’s $132 billion… and climbing.

“A rising stablecoin supply indicates that capital is staying within the crypto ecosystem, ready to be deployed for purchases.

“Stablecoins act as ‘dry powder’ for traders, providing liquidity to buy assets like Bitcoin and other cryptocurrencies.

“I’m going out on a limb and making a bold prediction: We’re going to see stablecoin supply hit $1 trillion by the end of 2025,” says Chris. “If I’m right, it has huge implications for crypto…

“For starters, more stablecoins mean deeper liquidity. Tighter spreads. Fewer headaches for whales. Institutional traders stop slipping on banana peels.

“Markets get smoother, more professional,” he says. “Less cowboy, more Wall Street.

“When the stablecoin tide rises, crypto tends to rise with it. And when regulatory clarity hits (by August this year), that will be what kicks crypto into overdrive.

“What will benefit most?” he questions. His answer: DeFi.

“Stablecoins are the lifeblood of decentralized finance,” says Chris. “Without them, yield farming is impossible. Lending becomes roulette. Borrowing is Russian roulette.

“At $1 trillion, DeFi doesn’t just grow. It matures. Institutional-grade products, real rates, real collateral, real risk management. That’s where we’re putting our attention,” Chris concludes.

“Our portfolio at Early-Stage Crypto Investor is already positioned for this windfall,” Chris notes. Whether you’re a seasoned crypto investor — or completely new to digital assets — check out this 2025 thesis right here.

A Begrudging “Hawk Tuah” Update

Haliey Welch — widely known as “Hawk Tuah Girl” — has resurfaced after several months of social media silence. When we last caught up with her in December, Welch was endorsing the aptly named HAWK memecoin.

We said at the time: “We sincerely hope this is the last time we have occasion to mention this story.” Nevertheless, we had a niggling suspicion we’d be revisiting this famous-for-going-viral phenom.

And here we are to report the SEC has concluded its investigation into Welch without filing charges or imposing sanctions… Well, that escalated quickly!

As just about anyone could have predicted, the HAWK token, launched on the Solana blockchain and marketed as a community reward for Welch’s fanbase, would take off on a meteoric ride. And suffer a catastrophic crash.

At its peak, the token reached a market capitalization of $490 million before plunging over 90%, leaving investors with ouchy losses.

Allegations quickly emerged that insiders manipulated the token supply (shocker), profiting from HAWK’s collapse. In fact, reports indicate the team behind HAWK earned $3.3 million in profits and $2 million in exchange fees.

Aside from the SEC’s investigation, the fallout led to a class-action lawsuit filed by investors, targeting HAWK’s architects, including overHere Ltd., its founder Clinton So and influencer Alex Larson Schultz (aka “Doc Hollywood”).

Notably, Welch was not named as a defendant in the case.

After her social media blackout, Welch addressed her fans on Instagram a few days ago, expressing relief at the SEC’s decision.

While she plans to step away from cryptocurrency endeavors — although, remarkably, her attorney didn’t rule out future crypto plans — rumors suggest Welch may document her journey in an upcoming film project.

Our promise to you, reader? We will not review a “Hawk Tuah” documentary.

Well, the odds are 50/50…

You have a great day! We’ll catch up with you Friday.

Best regards,

Emily Clancy
Associate editor, Paradigm Pressroom's 5 Bullets