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πŸ’₯"Yippy" Kay Yay, Mother...πŸ’₯

πŸ’₯"Yippy" Kay Yay, Mother...πŸ’₯

Royal Paper + Dolphin Company File. Dialyze Direct to Come? Plus more.

Apr 13, 2025
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πŸ’₯"Yippy" Kay Yay, Mother...πŸ’₯
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a group of men in space suits are standing next to each other with the words smoke 'em if ya got 'em
Source: Tenor

Callback to Wednesday morning’s edition, which captured the state of post-”Liberation Day” markets up to that point:

πŸ’₯Market Dysfunction?πŸ’₯

πŸ’₯Market Dysfunction?πŸ’₯

Apr 9
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As we published that piece, Bill Ackman was about-facing on President Trump, Jamie Dimon was on Fox Business dropping the dreaded β€œR” word and stock futures looked bleak. Wait … maybe β€œbleak” isn’t the right word for it. We’ll let President Trump explain it:

That’s right: people were getting β€œyippy”!

And so President Trump announced a 90-day pause on tariffs!!

Source: @TheStalwart on X

Well, tariffs other than (i) a blanket 10% and (ii) a huge increase for China:

Source: @MikeZaccardi on X

For its part, China indicated it intends to bolster tariffs on all US goods from 84% to 125% starting yesterday, April 12, 2025. And then went on to troll the sh*t out of us.

@axiang67Make america great again~#tariff #america
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Despite these obviously meaningful two-way tariffs (which effectively end all trade between the US and China) …

Source: Mizuho Securities USA

… the markets breathed a massive (financial) sigh of relief. Which looked something like this:

Source: Google

… and this:

Source: Google

… and this:

Source: Google

This movement in the VIX from Wednesday to Friday is pretty wild:

Source: Google

So while we’re back from the brink of watching NBA playoff games on TV like Johnny a plebe to shopping for Lakers playoff tickets, we might want to go for the nosebleed seats. Because, as of week’s end anyway, things still looked a bit whacky out there β€” not like Tuesday/Wednesday wacky, but wacky nonetheless.

Source: @lisaabramowicz1 on X
Source: @NickTimiraos on X. The 30Y ended the week at 4.877%, fyi.
Source: @NickTimiraos on X

The consumer is showing some signs of cracking:

And now, despite indications that Jerome POW-ell’s preferred inflation measure (PCE) will look tame (in large part due to a precipitous fall in airfare), the market is betting that the Fed stays put:

Source: CME Group. Note that the probability of no change in the Fed Funds Rate sat at nearly 79% at market close on Friday, April 11, 2025. The probability of easing INCREASED after President Trump announced a carveout from tariffs for electronics on Saturday.

Higher for longer, baby!

Secondaries are rattled from all of this:

Look, things can change on a dime β€” much like they did over the course of this week and again on Saturday when the administration announced additional tariff adjustments related to electronics.

Source: BBC

With each passing day President Trump could carve out more and more types of goods from tariffs. And with the 90-day reprieve, President Trump’s team could land scores of favorable new trade deals; he could even get on the phone with China’s President Xi Jinping and work something out. Still β€” and not to state the obvious β€” all of the volatility and uncertainty is making β€˜25 look increasingly promising for RX professionals. Or as Oaktree Capital Management’s Howard Marks recently put it:

In Oaktree’s markets, fear of defaults (not unfounded) has caused risk compensation in the form of yield spreads to increase substantially, leading to a meaningful increase in the available yields on credit. At the same time, we anticipate a higher incidence of distress and increased demand for bespoke capital solutions, meaning we’re likely to invest our latest opportunistic debt fund faster than otherwise would have been the case.


⏩One to Watch: Dialyze Holdings LLC ⏩

Source: Dialyze Holdings LLC

Let’s start with this one.

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