April 9, 2025 • 16 mins
In the aftermath of President Donald Trump’s April 2 “Liberation Day,” stock markets around the world plunged. Yet just 13 hours after Trump’s tariffs took effect, the president paused them for 90 days — for countries not named China, that is.
Markets soared in response to Trump’s backpedaling. The S&P 500 Index climbed almost 10% while the Nasdaq Composite Index jumped by the most since 2001. The Trump put, or the belief that the president uses the stock market as his scoreboard, appears to be alive and well after all.
On this episode of Trillions, Eric Balchunas and Joel Weber discuss what just happened, how ETFs fared and where cracks appeared. They also assess flows, volume and what to watch next.
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Episode Transcript
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Speaker 1 (00:05):
Okna trillions.
Speaker 2 (00:06):
I'm Joel Webber and I'm Eric belchernis Well, Eric, we
live in exciting times.
Speaker 1 (00:17):
I think we've recorded a couple versions of this episode,
and here we are after the market's closed on Wednesday,
April ninth. What has happened?
Speaker 3 (00:31):
I guess the Trump put is real. That's what we
found out today. So the Trump Put was this idea
that somewhere along the lines of these tariffs there was
going to be a point where.
Speaker 4 (00:44):
The president would back off.
Speaker 3 (00:47):
A little because he wants to see the stock market
do well, and he wouldn't let the whole stock market
go into the doghouse.
Speaker 4 (00:54):
And people thought, well, maybe he will.
Speaker 3 (00:56):
This is a new Trump, it's not the old one,
and people were kind of digging in, and even I was.
I had said early on, I just don't think he'll
let it get this far. I was wrong, But then
again I guess I was right eventually. But he came
in said there's a pause on the tariffs, and it's complicated.
They're not over, but just the word pause, and it
(01:19):
came from his mouth. It wasn't fake news. The markets
went absolutely bananas. The algos which were lying in wait
like salivating dogs were thrown big chunk of red meat
and basically like the QQQ went up twelve percent today, Joel,
that's the third best day ever, barely behind the second
(01:40):
best day, which was in two thousand and eight during
the Great Financial Crisis. And both of those are a
bit behind January third, two thousand and one. So this
is up there with those eras of those crazy times.
You know, there's two thousand and one, two thousand and eight,
and now this is going to be historic and memorable
for different reasons.
Speaker 4 (02:01):
That's the kind of thing we just loved through.
Speaker 1 (02:03):
So we have no guests for this episode. It's Eric
and me talking about what just happened and trying to
make sense of it and giving you some etf insights
in the process, this time on Trillions. What just happened? Eric,
welcome back to Trillions, see you and me.
Speaker 3 (02:22):
Yeah, it's been you know, it's funny there somebody was
pointing out the Goldman Sachs had basically predicted a recession
at like noon and walked two hours later said, h
recession is off. So we did the same thing except podcasts.
Speaker 1 (02:41):
So it has been a turbulent week. We saw market
go way down and and as you've u helped said
in the intro, things have come back. What are some
of the the stats that jump out at you, Well, just.
Speaker 3 (03:00):
The inter day moves in some of these ETFs. You know,
we just went over the ques. I think that is
a massive number. Twelve percent. I mean that's one day now.
It's still not back up, you know, to where it
was before all this started, but it's went a long
way towards that. And but one of the ETFs that
stood out to me was SOXEL SOXL. This is the
(03:21):
three X semiconductors ETF, which I remember looking at it
all week and it just kept taking in tons of
money and I was like, man, these degens are crazy.
This is like they were just throwing money into this
thing was going down and down and down, and honestly,
they're looking good today. It went up over fifty percent
(03:42):
in one day. Fifty five percent, right, this is the
best return it's ever had. It's like fifteen years old.
Speaker 4 (03:48):
And my god.
Speaker 3 (03:49):
So if you know, we had looked over the past
couple of weeks and we were like, there's really only
two people that seems like they're buying this market.
Speaker 4 (03:58):
The Vanguardians. They always buy the market.
Speaker 3 (04:01):
But the degens, they were really hanging tough, and I thought,
how long can they tell?
Speaker 4 (04:05):
How much can they take?
Speaker 3 (04:07):
This is going to embolden them forever. I mean, they're
never not going to buy the dip anymore. And this,
I got to be honest, is why I have a
hard time being anything other than a vanguardian investor myself personally,
because market timing is so hard, especially in a world
where the Fed or the President can control the market
with like one word.
Speaker 4 (04:29):
You know who? Who could have called this right?
Speaker 3 (04:31):
All the evidence and data pointed to more pain and
just reminds me of COVID a little. Remember when the
FED stepped in to say they're buying bonds and the
market did the same thing. This is why it is
just as dangerous to go to cash sometimes, even if
everything seems like it going to hell. I imagine this
(04:53):
is just going to live with people for a while.
If anything, it could make people better disciplined. They might
just never mess with their portfolio again.
Speaker 4 (05:01):
We why bother.
Speaker 1 (05:03):
So some cracks were forming earlier in the week. Where
were some of those cracks and are they still there
or have they you know, been just kind of covered up?
Up for the time being.
Speaker 3 (05:18):
The cracks are gone, basically. So one of the stories
that Bloomberg News wrote was about the COLO ETF and
how it traded at a one percent discount.
Speaker 1 (05:27):
And this was what's the ticket for this one?
Speaker 4 (05:29):
Jaws Yeah, jaaa yeah.
Speaker 3 (05:32):
So it's not a big discount. You know, we saw
discounts up to twenty nine percent during COVID in some ETFs.
But it was the first sign that there was maybe
some illiquidity forming in bonds. And some people even said
that the bond market was what pushed Trump to change.
I don't know if that's true or not, but the
bond market was starting to be.
Speaker 1 (05:51):
He said as much too, like he has said that now.
Speaker 3 (05:54):
Yeah, so to confirm then, So the bond market was
starting to show some ill liquidity. Treasuries were doing what
we didn't think they would do. They were going down
even though the stocks were going down. That's a bad
sign anyway. There was just the very hint of cracks
or illiquidity forming in bonds, and a Jaw was one
(06:14):
of the early ones to show that. But it were
really light. I mean we're talking like a swell way
out yonder you know, not even close to being anything
big yet, But these cracks are going to be gone.
If anything, what we might see is the opposite role.
Instead of seeing discounts, you could see some premiums because
so much a wall of money just probably bought the
(06:37):
market all day that the you know, arbitragers are just
trying to keep up.
Speaker 4 (06:41):
Probably you could see some premiums.
Speaker 1 (06:43):
Okay, So what about flows? What how crazy did they
look before? And what happened in the afternoon.
Speaker 4 (06:53):
I gotta be honest.
Speaker 3 (06:54):
I've always said ETF holders are more diamond hands than
people give them credit for. But this year they really
showed diamond hands. ETF took in three hundred and three
billion through the year, and the last couple of weeks
were really good. They were averaging like four or five
billion a day. Mostly vous you know again, it was
the vanguardians and the degens, and there were some people
(07:16):
doing opportunistic buying like there were definitely a lot of
flows into cash like ETFs. But the equity ETFs did fine.
They had their best quarter in Q one, and you
know again, they're reaping the benefits today, at least for today.
We'll see where it plays out from here, but they
look good. I'd imagine we'll see another pickup and flows,
(07:37):
you know, even another little boost. A lot of times
you have the trading crowd and the retail crowd. The
retail crowd had been buying the whole time. The traders
were kind of coming in and out. Normally they're just
running for the hills during something like this, but they
were kind of in and out. They weren't totally committed
to being in or out. And the neutralness let the
vanguard flows really power through.
Speaker 1 (08:04):
So there's flows. What about volume volume?
Speaker 4 (08:09):
It was fascinating.
Speaker 3 (08:12):
I always bring up those two scientists in Silence of
the Lambs troll who they brought the butterfly thing to
the bugs. Those guys are the thick glasses who are like, oh,
this is so interesting. This is what the last three
days were like for us. The volume was crazy. On Monday,
the spy tradered one hundred and twenty seven billion. That
(08:33):
was the biggest day ever on record. A lot of
times there's volume explosions in around a capitulation moment, so
we were wondering, okay, is this it now? We thought
that even before the news, But the volume today was
almost as much. And I think a lot of the
volume today was buying volume. So I think we're going
to see when you look at the month of April,
(08:57):
it is going to blow away other month on record
for ETFs, most likely at least this week. So a
lot of people leaned on ETFs who are traders and
everything you know, worked fine, but the volume showed a
lot of fear and just craziness in the market.
Speaker 1 (09:14):
And I know that Athanasios Sera Fegas on your team
at Bloomberg Intelligence did a little study. What did he
find in that study?
Speaker 3 (09:24):
He looked at times where the spy volume is over
sixty billion. You know, I've always called sixty billion. The
freak out zone spy average is twenty five billion.
Speaker 1 (09:32):
So anything beyond that.
Speaker 4 (09:34):
Yeah, anything beyond sixty to me.
Speaker 3 (09:36):
Here's why, because spy is used by so many people
on the outskirts of their portfolio, almost like a liquidity sleeve.
So if they're like especially bigger investors, if they want
to tweak their investments for something bad, they might add
a put option from their spy account, which would end
up creating volume for spy, or they might just short spy,
(09:57):
or they might buy extra spy.
Speaker 4 (09:59):
The spy is where they move.
Speaker 3 (10:00):
The knobs on the outside of their portfolio to get
the system just right, because they don't want to mess
with their picks in the middle. People like to keep
the rest, you know, as it is. So spy is
an adjustment mechanism. So when people are adjusting, the volume
goes up. And he looked at those days over sixty
billion and found that in the next month there's a
two thirds chance that the market will be positive and
(10:22):
the medium return was about one point two percent, so
not gangbusters, but positive. And so again this is because
a lot of times there's these freakouts where spy volume
goes up, VIX goes up, and it is in a
way an explosion of negativity, almost like a real explosion,
and then the dust kind of settles and people that
(10:44):
start looking for some opportunity in the rubble. And I
think that's sort of what happened here. It's just that
seemingly that rebound got sped up, you know, eight hundred
times it was put condensed into about an hour instead
of a month.
Speaker 1 (10:58):
What are you, as an ETF vanalyist watching out for next?
Speaker 3 (11:02):
Yeah, So one thing we're looking at David Cohne, who
covers active funds.
Speaker 4 (11:08):
Is how active managers dealt with this?
Speaker 3 (11:10):
You know, did they go to conservative Well, we found
but this is before the bounce back. We did find
that active equity managers normally only beat the market, like
only thirty three percent of them typically beat the market
in any given year. Over half were beating the market
in the past week. In other words, they had done
they were tilted a little more towards value stocks and
(11:33):
fundamental less mag seven, they were positioned pretty well. But
this rebound, how will this affect that? On the flip side,
bond managers did very poorly. They are a benchmark against
the AG, and the AAG is full of treasuries and
a lot of them they take extra risk, so a
lot of them when there's a huge sell off in bonds,
they get caught a little naked, and so a very small.
Speaker 4 (11:55):
Amount of them outperformed during the sell off.
Speaker 3 (11:59):
The you know, when the tariff was the worst. They're
probably happy because risk is back on. So it's interesting, how,
you know, what are you supposed to do as an
active manager? I mean, this is something we'll be exploring
for the next couple of days. We felt that people
had the same dilemma for the past two years. You're
an active manager, these mag seven stocks are like extremely
high valuations. What do you do do you do you
(12:21):
underweight them and miss out on the next leg up,
or do you overweight them or neutral weight them. It's
it's really hard right now to be an active manager,
and especially on the macro side, because these macro winds
can just decimate anything it had going. If anything, it
probably bodes well to just be a classic stockpicker because
(12:43):
these macrowinds come and go, but at the end of
the day, over time, the good companies rise to the top.
Speaker 1 (12:49):
Okay, last question, Eric Trump paused many tariffs, but he's
holding firm on China. So what does the prospect look
for world X China and ETFs.
Speaker 3 (13:04):
That had been a very popular trade for a little while.
And it's interesting since you know the TEARFF pause was announced,
China had a good day. I kind of thought it
would be a little worse for them. But right now,
like if you look at.
Speaker 1 (13:18):
Year to date returns, what's the ticket for this.
Speaker 3 (13:21):
Emx C is Emerging markets X China and FXI is China.
So EMXC was down nine percent year to date, FXI
only down two percent, So China had been outperforming its
emerging market peers, and if anything, this.
Speaker 4 (13:36):
May reverse that a little.
Speaker 3 (13:38):
Right, if China is sort of put into a special
place and trade is full of friction with the US,
it's possible that that goes the other way. So I
would look for EMXC to maybe have a good couple
days in lieu of you know, after this that said,
what we found in China, and Rebecca and Jack on
(13:59):
my team covered this is the national team bought ETFs
uh for the past couple of days. So just like
the FED bought bond ETFs in twenty twenty, China's national
team went in and bought equity ETFs and helped prop
the market up.
Speaker 1 (14:11):
So almost like they knew the Trump was coming.
Speaker 3 (14:15):
I know, right, it was a it was a good bet. Well,
let's say they are ostracized and they take a hit
from like the trade of the US. Just it's hard
to bet against a country where the government's going to.
Speaker 4 (14:28):
Buy you know, ETFs or stocks.
Speaker 3 (14:30):
I mean that's like again, don't fight the Fed, don't
fight the Central Bank. So the China versus em is
going to be tricky. There's I guess you could say
there's reasons to do or don't boo, do both. But
you know, I will say this, I think so many
people are just very happy that it's paused. I think
most investors really believe in the US. They wanted a
(14:51):
reason to believe. They didn't want to think it was
over a lot of investors here, I'll be honest. They
have a hard time buying European stocks. They have a
hard time buying China, like they don't think China numbers
are real. They think Europe isn't that motivated, the not
much innovation. They'd rather have their money put to work here.
So this past couple of weeks was just really painful
for most average investors, and so I think most people
(15:15):
are just so relieved.
Speaker 4 (15:16):
What does the.
Speaker 3 (15:17):
Future hold, I don't know, But what we do know
now is that if the tariffs kick in, or if
there's more tariff talk, we know they can be undone
with literally one word. And I'd imagine this makes other assets.
It makes it harder to attract assets because people know
that at some point, you know, the president might capitulate
(15:40):
if the market's that bad. So it's interesting spot we're
in now. It does feel like the Trump played the
role of the Fed in a way done Eric.
Speaker 4 (15:50):
Always a pleasure, Always a pleasure.
Speaker 1 (15:51):
Drop.
Speaker 5 (15:59):
Thanks for listening to Trillions until next time. You can
find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify.
Speaker 1 (16:07):
Or wherever else you'd like to listen. We'd love to
hear from you. We're on Twitter.
Speaker 5 (16:12):
I'm at Joel Webber Show. He's at Eric Valcunos. This
episode of Trillions was produced by Magnus Hendrickson.
Speaker 1 (16:20):
Bye,
Okna trillions.
Speaker 2 (00:06):
I'm Joel Webber and I'm Eric belchernis Well, Eric, we
live in exciting times.
Speaker 1 (00:17):
I think we've recorded a couple versions of this episode,
and here we are after the market's closed on Wednesday,
April ninth. What has happened?
Speaker 3 (00:31):
I guess the Trump put is real. That's what we
found out today. So the Trump Put was this idea
that somewhere along the lines of these tariffs there was
going to be a point where.
Speaker 4 (00:44):
The president would back off.
Speaker 3 (00:47):
A little because he wants to see the stock market
do well, and he wouldn't let the whole stock market
go into the doghouse.
Speaker 4 (00:54):
And people thought, well, maybe he will.
Speaker 3 (00:56):
This is a new Trump, it's not the old one,
and people were kind of digging in, and even I was.
I had said early on, I just don't think he'll
let it get this far. I was wrong, But then
again I guess I was right eventually. But he came
in said there's a pause on the tariffs, and it's complicated.
They're not over, but just the word pause, and it
(01:19):
came from his mouth. It wasn't fake news. The markets
went absolutely bananas. The algos which were lying in wait
like salivating dogs were thrown big chunk of red meat
and basically like the QQQ went up twelve percent today, Joel,
that's the third best day ever, barely behind the second
(01:40):
best day, which was in two thousand and eight during
the Great Financial Crisis. And both of those are a
bit behind January third, two thousand and one. So this
is up there with those eras of those crazy times.
You know, there's two thousand and one, two thousand and eight,
and now this is going to be historic and memorable
for different reasons.
Speaker 4 (02:01):
That's the kind of thing we just loved through.
Speaker 1 (02:03):
So we have no guests for this episode. It's Eric
and me talking about what just happened and trying to
make sense of it and giving you some etf insights
in the process, this time on Trillions. What just happened? Eric,
welcome back to Trillions, see you and me.
Speaker 3 (02:22):
Yeah, it's been you know, it's funny there somebody was
pointing out the Goldman Sachs had basically predicted a recession
at like noon and walked two hours later said, h
recession is off. So we did the same thing except podcasts.
Speaker 1 (02:41):
So it has been a turbulent week. We saw market
go way down and and as you've u helped said
in the intro, things have come back. What are some
of the the stats that jump out at you, Well, just.
Speaker 3 (03:00):
The inter day moves in some of these ETFs. You know,
we just went over the ques. I think that is
a massive number. Twelve percent. I mean that's one day now.
It's still not back up, you know, to where it
was before all this started, but it's went a long
way towards that. And but one of the ETFs that
stood out to me was SOXEL SOXL. This is the
(03:21):
three X semiconductors ETF, which I remember looking at it
all week and it just kept taking in tons of
money and I was like, man, these degens are crazy.
This is like they were just throwing money into this
thing was going down and down and down, and honestly,
they're looking good today. It went up over fifty percent
(03:42):
in one day. Fifty five percent, right, this is the
best return it's ever had. It's like fifteen years old.
Speaker 4 (03:48):
And my god.
Speaker 3 (03:49):
So if you know, we had looked over the past
couple of weeks and we were like, there's really only
two people that seems like they're buying this market.
Speaker 4 (03:58):
The Vanguardians. They always buy the market.
Speaker 3 (04:01):
But the degens, they were really hanging tough, and I thought,
how long can they tell?
Speaker 4 (04:05):
How much can they take?
Speaker 3 (04:07):
This is going to embolden them forever. I mean, they're
never not going to buy the dip anymore. And this,
I got to be honest, is why I have a
hard time being anything other than a vanguardian investor myself personally,
because market timing is so hard, especially in a world
where the Fed or the President can control the market
with like one word.
Speaker 4 (04:29):
You know who? Who could have called this right?
Speaker 3 (04:31):
All the evidence and data pointed to more pain and
just reminds me of COVID a little. Remember when the
FED stepped in to say they're buying bonds and the
market did the same thing. This is why it is
just as dangerous to go to cash sometimes, even if
everything seems like it going to hell. I imagine this
(04:53):
is just going to live with people for a while.
If anything, it could make people better disciplined. They might
just never mess with their portfolio again.
Speaker 4 (05:01):
We why bother.
Speaker 1 (05:03):
So some cracks were forming earlier in the week. Where
were some of those cracks and are they still there
or have they you know, been just kind of covered up?
Up for the time being.
Speaker 3 (05:18):
The cracks are gone, basically. So one of the stories
that Bloomberg News wrote was about the COLO ETF and
how it traded at a one percent discount.
Speaker 1 (05:27):
And this was what's the ticket for this one?
Speaker 4 (05:29):
Jaws Yeah, jaaa yeah.
Speaker 3 (05:32):
So it's not a big discount. You know, we saw
discounts up to twenty nine percent during COVID in some ETFs.
But it was the first sign that there was maybe
some illiquidity forming in bonds. And some people even said
that the bond market was what pushed Trump to change.
I don't know if that's true or not, but the
bond market was starting to be.
Speaker 1 (05:51):
He said as much too, like he has said that now.
Speaker 3 (05:54):
Yeah, so to confirm then, So the bond market was
starting to show some ill liquidity. Treasuries were doing what
we didn't think they would do. They were going down
even though the stocks were going down. That's a bad
sign anyway. There was just the very hint of cracks
or illiquidity forming in bonds, and a Jaw was one
(06:14):
of the early ones to show that. But it were
really light. I mean we're talking like a swell way
out yonder you know, not even close to being anything
big yet, But these cracks are going to be gone.
If anything, what we might see is the opposite role.
Instead of seeing discounts, you could see some premiums because
so much a wall of money just probably bought the
(06:37):
market all day that the you know, arbitragers are just
trying to keep up.
Speaker 4 (06:41):
Probably you could see some premiums.
Speaker 1 (06:43):
Okay, So what about flows? What how crazy did they
look before? And what happened in the afternoon.
Speaker 4 (06:53):
I gotta be honest.
Speaker 3 (06:54):
I've always said ETF holders are more diamond hands than
people give them credit for. But this year they really
showed diamond hands. ETF took in three hundred and three
billion through the year, and the last couple of weeks
were really good. They were averaging like four or five
billion a day. Mostly vous you know again, it was
the vanguardians and the degens, and there were some people
(07:16):
doing opportunistic buying like there were definitely a lot of
flows into cash like ETFs. But the equity ETFs did fine.
They had their best quarter in Q one, and you
know again, they're reaping the benefits today, at least for today.
We'll see where it plays out from here, but they
look good. I'd imagine we'll see another pickup and flows,
(07:37):
you know, even another little boost. A lot of times
you have the trading crowd and the retail crowd. The
retail crowd had been buying the whole time. The traders
were kind of coming in and out. Normally they're just
running for the hills during something like this, but they
were kind of in and out. They weren't totally committed
to being in or out. And the neutralness let the
vanguard flows really power through.
Speaker 1 (08:04):
So there's flows. What about volume volume?
Speaker 4 (08:09):
It was fascinating.
Speaker 3 (08:12):
I always bring up those two scientists in Silence of
the Lambs troll who they brought the butterfly thing to
the bugs. Those guys are the thick glasses who are like, oh,
this is so interesting. This is what the last three
days were like for us. The volume was crazy. On Monday,
the spy tradered one hundred and twenty seven billion. That
(08:33):
was the biggest day ever on record. A lot of
times there's volume explosions in around a capitulation moment, so
we were wondering, okay, is this it now? We thought
that even before the news, But the volume today was
almost as much. And I think a lot of the
volume today was buying volume. So I think we're going
to see when you look at the month of April,
(08:57):
it is going to blow away other month on record
for ETFs, most likely at least this week. So a
lot of people leaned on ETFs who are traders and
everything you know, worked fine, but the volume showed a
lot of fear and just craziness in the market.
Speaker 1 (09:14):
And I know that Athanasios Sera Fegas on your team
at Bloomberg Intelligence did a little study. What did he
find in that study?
Speaker 3 (09:24):
He looked at times where the spy volume is over
sixty billion. You know, I've always called sixty billion. The
freak out zone spy average is twenty five billion.
Speaker 1 (09:32):
So anything beyond that.
Speaker 4 (09:34):
Yeah, anything beyond sixty to me.
Speaker 3 (09:36):
Here's why, because spy is used by so many people
on the outskirts of their portfolio, almost like a liquidity sleeve.
So if they're like especially bigger investors, if they want
to tweak their investments for something bad, they might add
a put option from their spy account, which would end
up creating volume for spy, or they might just short spy,
(09:57):
or they might buy extra spy.
Speaker 4 (09:59):
The spy is where they move.
Speaker 3 (10:00):
The knobs on the outside of their portfolio to get
the system just right, because they don't want to mess
with their picks in the middle. People like to keep
the rest, you know, as it is. So spy is
an adjustment mechanism. So when people are adjusting, the volume
goes up. And he looked at those days over sixty
billion and found that in the next month there's a
two thirds chance that the market will be positive and
(10:22):
the medium return was about one point two percent, so
not gangbusters, but positive. And so again this is because
a lot of times there's these freakouts where spy volume
goes up, VIX goes up, and it is in a
way an explosion of negativity, almost like a real explosion,
and then the dust kind of settles and people that
(10:44):
start looking for some opportunity in the rubble. And I
think that's sort of what happened here. It's just that
seemingly that rebound got sped up, you know, eight hundred
times it was put condensed into about an hour instead
of a month.
Speaker 1 (10:58):
What are you, as an ETF vanalyist watching out for next?
Speaker 3 (11:02):
Yeah, So one thing we're looking at David Cohne, who
covers active funds.
Speaker 4 (11:08):
Is how active managers dealt with this?
Speaker 3 (11:10):
You know, did they go to conservative Well, we found
but this is before the bounce back. We did find
that active equity managers normally only beat the market, like
only thirty three percent of them typically beat the market
in any given year. Over half were beating the market
in the past week. In other words, they had done
they were tilted a little more towards value stocks and
(11:33):
fundamental less mag seven, they were positioned pretty well. But
this rebound, how will this affect that? On the flip side,
bond managers did very poorly. They are a benchmark against
the AG, and the AAG is full of treasuries and
a lot of them they take extra risk, so a
lot of them when there's a huge sell off in bonds,
they get caught a little naked, and so a very small.
Speaker 4 (11:55):
Amount of them outperformed during the sell off.
Speaker 3 (11:59):
The you know, when the tariff was the worst. They're
probably happy because risk is back on. So it's interesting, how,
you know, what are you supposed to do as an
active manager? I mean, this is something we'll be exploring
for the next couple of days. We felt that people
had the same dilemma for the past two years. You're
an active manager, these mag seven stocks are like extremely
high valuations. What do you do do you do you
(12:21):
underweight them and miss out on the next leg up,
or do you overweight them or neutral weight them. It's
it's really hard right now to be an active manager,
and especially on the macro side, because these macro winds
can just decimate anything it had going. If anything, it
probably bodes well to just be a classic stockpicker because
(12:43):
these macrowinds come and go, but at the end of
the day, over time, the good companies rise to the top.
Speaker 1 (12:49):
Okay, last question, Eric Trump paused many tariffs, but he's
holding firm on China. So what does the prospect look
for world X China and ETFs.
Speaker 3 (13:04):
That had been a very popular trade for a little while.
And it's interesting since you know the TEARFF pause was announced,
China had a good day. I kind of thought it
would be a little worse for them. But right now,
like if you look at.
Speaker 1 (13:18):
Year to date returns, what's the ticket for this.
Speaker 3 (13:21):
Emx C is Emerging markets X China and FXI is China.
So EMXC was down nine percent year to date, FXI
only down two percent, So China had been outperforming its
emerging market peers, and if anything, this.
Speaker 4 (13:36):
May reverse that a little.
Speaker 3 (13:38):
Right, if China is sort of put into a special
place and trade is full of friction with the US,
it's possible that that goes the other way. So I
would look for EMXC to maybe have a good couple
days in lieu of you know, after this that said,
what we found in China, and Rebecca and Jack on
(13:59):
my team covered this is the national team bought ETFs
uh for the past couple of days. So just like
the FED bought bond ETFs in twenty twenty, China's national
team went in and bought equity ETFs and helped prop
the market up.
Speaker 1 (14:11):
So almost like they knew the Trump was coming.
Speaker 3 (14:15):
I know, right, it was a it was a good bet. Well,
let's say they are ostracized and they take a hit
from like the trade of the US. Just it's hard
to bet against a country where the government's going to.
Speaker 4 (14:28):
Buy you know, ETFs or stocks.
Speaker 3 (14:30):
I mean that's like again, don't fight the Fed, don't
fight the Central Bank. So the China versus em is
going to be tricky. There's I guess you could say
there's reasons to do or don't boo, do both. But
you know, I will say this, I think so many
people are just very happy that it's paused. I think
most investors really believe in the US. They wanted a
(14:51):
reason to believe. They didn't want to think it was
over a lot of investors here, I'll be honest. They
have a hard time buying European stocks. They have a
hard time buying China, like they don't think China numbers
are real. They think Europe isn't that motivated, the not
much innovation. They'd rather have their money put to work here.
So this past couple of weeks was just really painful
for most average investors, and so I think most people
(15:15):
are just so relieved.
Speaker 4 (15:16):
What does the.
Speaker 3 (15:17):
Future hold, I don't know, But what we do know
now is that if the tariffs kick in, or if
there's more tariff talk, we know they can be undone
with literally one word. And I'd imagine this makes other assets.
It makes it harder to attract assets because people know
that at some point, you know, the president might capitulate
(15:40):
if the market's that bad. So it's interesting spot we're
in now. It does feel like the Trump played the
role of the Fed in a way done Eric.
Speaker 4 (15:50):
Always a pleasure, Always a pleasure.
Speaker 1 (15:51):
Drop.
Speaker 5 (15:59):
Thanks for listening to Trillions until next time. You can
find us on the Bloomberg Terminal, Bloomberg dot com, Apple Podcasts, Spotify.
Speaker 1 (16:07):
Or wherever else you'd like to listen. We'd love to
hear from you. We're on Twitter.
Speaker 5 (16:12):
I'm at Joel Webber Show. He's at Eric Valcunos. This
episode of Trillions was produced by Magnus Hendrickson.
Speaker 1 (16:20):
Bye,
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