US Treasury Yields Flatten
White House Trade Policy Changes
The end of the de minimis trade exemption tomorrow is a major event that will directly impact corporate profits. We should anticipate that companies reliant on low-cost goods from Asia for direct-to-consumer shipping will face immediate margin pressure from the new duties. Buying put options on online retail ETFs or specific fast-fashion importers could be a prudent strategy to hedge against this disruption.
With the new trade rules taking effect and a long holiday weekend approaching, an increase in market volatility is highly probable. The VIX has already climbed to 17.5 from its recent low of 14, indicating that nervousness is building. We should consider purchasing some short-term protection, such as VIX call options, to guard against sharp, unexpected market moves next week.
Gold’s strong performance is a direct result of the weakening dollar and mounting economic uncertainty. This rally continues the trend seen since gold broke its previous all-time highs back in late 2024, a move supported by persistent central bank buying. We view call options on gold futures or related ETFs as a sensible way to participate in what appears to be a sustained flight to safety.
