Trump’s Tariff Reversal Sparks Historic Stock Rally But What Next?

Hello and welcome back to the Market Maker podcast. And what a day, what an episode we have got for you today, because if you're just tuning in, you might be clocking some of the headlines where last night on Wall Street, the S&P 500 closed up nearly 10%, the biggest one-day gain since 2008. The likes of Tesla up 23%. NVIDIA, Apple, both up 19% and 15% each respectively. However, as is quite often the case, a lot of emphasis on those equity moves. However, in this conversation, Piers, I know both you and I know that there's a very other important asset class or signal that probably forced Donald's hand in what caused this big reversal in markets. However, I know you're a big Truth Social platform power user, and I just wanted to see whether you managed to get the insider tip off from your man DJT.

Well, I didn't. It's because I'm not on that platform, but after you just told me a minute ago the information you're about to relay, I'm immediately subscribing.

Okay, so the sorts of timings we were looking at here was not long after trading opened on Wednesday. So local time, New York, 9:30, Trump took to the platform and he wrote uppercase, be cool. Everything is going to work out well. The USA will be bigger and better than ever before. So I'm just sitting there. I'm like, okay, yeah, that's quite bold. Be cool. Okay. And then 4 minutes went by and then he tweeted, or he posted all uppercase, this is a great time to buy DJT. 4 hours later, he pulls his tariffs and the markets go gangbusters upside. What a legend. What a guy.

I mean, you can't, even with Trump, you can't write this script. I mean, quite extraordinary. And look, he tweeted that, bear in mind, you know, in the face of a 4-trading-day monster sell-off, right? Thursday, Friday last week, you know, we hit this kind of liberation day as he's coined it, which is where, right, reciprocal tariffs on the planet come into force. Markets just puked Thursday, Friday, and then over the weekend, Trump's like doubling down. This is just a bit of war. It's fine. I am absolutely continuing on the same path. I'm not backing down. I'm not backing down.

He's gotta work that golf game. He's gotta work that swing on the back nine, kids.

That's right. He spent, well, according to the media, he spent the weekend in Florida playing golf, then Monday, big sell-off. Tuesday, the fourth biggest, big sell-off in a row. And look, we're talking, obviously this is off, if you just talk stocks for a second, this is off the back of what was already a kind of 3-week big sell-off, right? So let's say 3 weeks of heavy downside and it's then almost like on Thursday, Liberation Day, after 3 weeks of heavy downside, it then just fell off a cliff. I.e., the downside just accelerated. And actually from Thursday to Tuesday, the S&P was down 12%, you know, across 4 trading days. And actually that was the worst 4 trading days since March 2020, which was when lockdown came in and COVID kicked off, right? So we're talking serious, serious stuff here. Oh look, the media are kind of taking Well, anyway, hang on. So he said, obviously there's a 90-day pause here, right? I mean, this is the kind of catalyst for what has been now a complete flip and a ramp, really, really steep ramp back to the upside for a lot of these markets. And if we're still going to talk stocks, then as you said, 9.5% up in one day for the world's biggest stock index. It is just, it is extraordinary, extraordinary stuff. I think in my entire career, which is like 24 years in markets, you know, that yesterday it's in the top 3 for the, you know, biggest upside moves in my entire career, right? The NASDAQ was up 12% and actually that was the biggest up move for the NASDAQ in one day since January 2001. The Dow Jones Industrial Average, biggest points gain in one day ever on record. That index was formed in the 1890s, right? So this obviously is just unbelievable, the numbers here. And look, it's relief. I would say, you know, when you talk percentage terms, it can be a bit misleading because look, the Nasdaq was off Tuesday's close, was off 26%, you know, off that February high, right? 26%. And yeah, rallied 12%, but it's actually still it's less than halfway back. You know, it's really just recovered. The NASDAQ is back to the levels trading on Thursday, right? Even though it's rallied 12%. So look, this by no means, you know, draws a line under this saga. This doesn't mean— and actually, your stat there about the S&P where it's the biggest update since 2008, well, that's a great thing to just highlight because what happened in 2008 was the big global financial crisis. And in Q4, the market just went through the floor. That doesn't mean there aren't just little kind of periodic blips back up when something positive happens. But in 2008, that blip back up was then followed by multiple big down days through the lows again and ongoing new lows, right? So, I don't know whether we're in sell the spike mood, which is like the new format for 2025, or are we buy the dip?

Well, I'll give you some statistics with that. So managed to dig up this morning, in the 16 times the US stock benchmark has dropped 15% or more at any point in a year, like it had before the rally that we had yesterday, The S&P 500 has only recovered to end the 12-month period positive on 3 occasions. Those instances were 2020, which was— it's your pop quiz.

Unique. COVID. 2009 was the— well, the bottom was put in place on the financial crisis, March 2009. And then, yep.

1982.

Oh, 1982. Was that Black Wednesday? One of the days? No. What was 1982?

It was when obviously my mother was pregnant and I was in, you know, the inception of Anthony Cheung. So those three major market occasions, risk on, let's go. It's bullish. In those three instances though, they all occurred. So there's only three times they all occurred when the Fed moved to support the economy.

Right.

That's what makes it unique.

You see, I'm worried then.

Yeah.

So you are saying 16 days, sorry, 16 times we've had a sell-off of this big and only 3 outta the 16, the market's finished up on the year.

Up over a 12-month period.

Okay. And that was all coinciding with a big Fed stimulus program.

Intervention by the central bank. Correct.

Interesting, because here's the problem, right? Interest rates are already, you know, the interest rates are very high. We know that we want the Fed to cut, but here's the conundrum, and maybe we should slide into this conversation now. Just yet another curveball that's come through just this afternoon. Like 1 hour and 15 minutes ago, we had the March inflation data for the US, as we know, and listeners of this podcast will know very well that inflation's been the problem and that's been the thing that's just been holding back the Fed from beginning their cutting cycle and it's been staying stubbornly high. Well, this inflation data today was awesome, like really good inflation dropping much more sharply than expected. So there's a near-term really positive from that and then I'm going to massively caveat it. But look, Core CPI dropped to, what was it, 2.8%. We were expecting 3%. I mean, why is that important? That's the lowest core inflation rate for 4 years, right? April 2021 or even March 2021. You gotta go back to find a kind of figure that was lower than that. All right, so look, inflation, core inflation finally down through this 3% kind of stubborn floor that's been holding up any further downside for like 12 months, right? So this is really positive. For market sentiment because people will think, right, well now inflation's getting back going on the downside, the Fed are going to be able to cut and maybe we'll get the 4th in 16 times of the S&P finishing up over a 12-month period, right? Because the Fed are going to come in and stimulate and stimulate. However, here's your problem because this inflation data includes zero tariff effect. This is March. Liberation Day. Well, this, that was the 2nd of April, right? And so actually, obviously the news is that Trump's delaying and pausing Liberation Day for 90 days, meaning he is just lifting all of these kind of reciprocal tariffs on everyone apart from China. But the 10% tariffs remain in place, by the way. So it's not like, this isn't Trump saying, right, we're going literally back to square one. You know, to the very start of this thing. We're not, he's saying still 10% tariffs on everyone. But he's saying, look, 75 countries, he said in his words, were queuing up to strike agreements, right? And so like Japan, South Korea, Vietnam, Cambodia, these big exporting countries in amongst that lot. And so he is saying, all right, fine. You know, and he did say upfront, to be fair, if you are prepared to negotiate and if you do not retaliate, then good things will happen. And that's what's happened because China are the ones that are super aggressive here, are retaliating, refusing to negotiate. So basically here's Trump going, well, look, everyone else will let you off the reciprocals, but 10% tariffs remain. China, we're going again because actually China retaliated and lifted their tariffs to, I think it's now 125% now. That's China tariffing US imports into China, right? So Trump's just kind of tripled, where are we? Quadrupled down on this and just ramped them up even more. So China is definitely, it's got worse with China, whereas fine, 90-day pause for everyone else. And look, the markets were desperate, desperate for any kind of relief. And that desperation is measured in the size of those moves yesterday.

What was actually really interesting as well is earlier this week, I think this was probably 2, 3 days ago, there was on Twitter one of those scraper accounts and there was a big debacle about actually where did this original news come from? Because this Twitter account, which is synonymous with this kind of small community that sits very much niche in finance that traders follow, and it basically tweeted a headline saying there's talk of a 90-day pause.

Yeah.

And the market had this massive gyration and it was apparently a misquote from a CNBC presenter. And then the tweet got fired and then everyone traded it and then it got denied and it reversed. However, having worked in that news kind of aggregation dissemination kind of world for a big part of my career, I always think, and I remember because we've been on the interns with the spring weeks, it's like there is no smoke without fire. It's always the case. So it was so interesting that that came out about 3 days ago. Then you had the sequence of kind of comms that you had from Donald on Truth Social. And then what happened? What I saw last night was obviously some absolutely tremendous memes going around about this whole thing. One of the best ones was Xi reading The Art of the Deal with a picture on the other side of Trump reading Sun Tzu's Art of War, which I thought was quite funny. But the principle of The Art of the Deal, the book is—

Trump's book, Anthony Cheung.

Trump's kind of like process to negotiate. And I guess you can distill it down to the simple principle of escalate to negotiate strategy. And it's interesting because I think over this week, the other thing that we've seen was a lot of backers of Trump. So there was Jamie Dimon, JP Morgan, I think it was Bill Ackman, big hedge fund manager. They all were turning, even Elon was taking.

Yeah.

Because obviously this division, I saw a great chart of BYD share price and Tesla. It's like the perfect mirror image. But the point being is that Equities are selling off. There was a lot of political tide turning, the big billionaire influential business community turning. He wasn't buckling. However, there was something really meaningful that really happened over the course of really the last, what, 24, 48 hours in the fixed income market. And I think I'd love for you to educate people about why it is while everyone's getting excited about equities. Everyone's getting excited about these turns of these major figureheads, talking heads saying stuff. He wasn't listening to them. It was something else that really triggered him. And when he was saying yesterday, I think before he made the announcements that the, what was the word he used? Wasn't giddy, was it yiddy or yippy?

Yippy.

He was like, yeah, the market's getting very nervous, getting a bit yippy. And he was referring to something very specific. So what was that and why is that the key to really unlocking this story of why he's potentially, for now, reversed some of the initial proposals?

So I said a 4-day monster sell-off in stocks. Friday, I'm sorry, Thursday, Friday, Monday, Tuesday, right? If you look at the bond markets, so stocks just went one way through the floor all 4 days. Bond markets Thursday and Friday rallied, and that's a classic risk-off. So you're selling equities because they're risky assets, and with that cash you're buying bonds. So bond prices driving higher, and when bond prices go up because of this buying frenzy, you get yields dropping. Okay. That was Thursday and Friday.

Just to jump in there, and this fits then with the narrative that was circulating at the time of depression of yields for refinancing of US debt.

Yeah.

And that he was engineering an economic slowdown recession, right?

That was the theory we kind of spun out a few weeks ago, which was that the US have a severe long-term debt problem. And this year, because of through COVID and some have been critical of Yellen, when they were borrowing huge sums of money to pay for the COVID crisis effort, they were borrowing it over very short time periods. It just means that that borrowing, that those loans, they come due cuz it's a short-term loan. It's like a 1-year or a 2-year or a 3-year or, or 5-year, right? They're coming due now. And actually in the next 12 months, the Treasury have to roll over and borrow another $2 trillion. But the problem was because interest rates were staying high, because inflation was staying high, yields were staying really high. So if you need to borrow money when yields are high, well then the interest rate on those loans are really high. So it was going to be super expensive for the Treasury to roll over and reborrow this $2 trillion, right? So one theory was Trump was purposely derailing the economy, driving down stock markets, creating negative sentiment to drive a safe haven move from investors into safe assets like government bonds, buying those bonds, driving the price up and driving the yields down. And if you can get those yields down, just at the right time when you need to borrow, you are borrowing at a lot, much lower interest rate. That was the whole theory, right? And this was working if that was his plan. I mean, he is never actually come out and really said those words. This is theorizing, but if that was the plan, it's perfect, right? Thursday, Friday, stock market's tanking. Fine. Bond prices going up, yields. And in fact, the 10-year yield hit 3.87%. On Monday. All right. That was the kind of low point. Bearing in mind that that yield had come off, I mean, God, it was at, let me just check, it was at 4.8% in mid-January. So it's got a whole percentage point and a lot of that was in the back end of last week. However, what happened on Monday, I think is pivotal to this whole thing because those bond yields that were dropping, great news to borrow money. It all just suddenly reversed. And what you had on Monday and Tuesday was stock markets tanking and then everyone starting to sell bonds as well. So the bond market started to tank, driving yields back up. And actually Monday and Tuesday, I mean, these moves are— you think the stock market moves are crazy, these are insane. Monday low for the yield on the 10-year was 3.87%. By Wednesday morning, it hit 4.51%. This is monster, monster moves, right? So what's going on here and what we've seen in previous crises, and you actually saw it in the early days of COVID when COVID hit and stock markets tanked, completely makes sense. Everything else tanked as well. Bonds were going down, gold was going down, And it was like, hang on a minute, what? Why is everyone selling literally everything? And this is when it gets to such a panic mode that take hedge funds, for example, you might have a stock portfolio and you start getting margin calls on your portfolio, right? So you need to fund your margin account with more cash. Where are you going to get your cash from? Well, I don't want to sell my equities because you feel like they're massively oversold in this panic mode. So you don't want to necessarily exit your position. So you sell something else, anything, right? What else have I got to sell? Well, I'll just sell my bonds, I'll sell gold. So it's actually a really key sign of a major, major stress across the global marketplace when everything's dropping. That happened Monday and Tuesday and the yields went back up. Now that's a problem for Trump who's got to borrow $2 trillion. The interest rate's just gone massively higher, right? And I think that was the catalyst And I'll say one more thing actually, that really the straw that broke the camel's back in this bond market move was a 2-year, sorry, a 3-year government bond auction that took place on Tuesday. Okay. So to borrow money, the government has to issue and sell bonds and they have these auctions, right? And then they sell these bonds. All right. And then depending on the demand, right? How many buyers are there for this stuff? Well, then that'll ultimately determine the interest rate. Okay? And the idea, the more the demand, well then the lower the interest rate, the better it is for the government who are borrowing. Okay? They can borrow cheaper. Of course, there's been an overlaying concern in recent months that this debt problem in the US is getting worse, where we've got a debt ceiling crisis looming in Congress over the summer. We're worried that the global community, particularly China, for political reasons, maybe part of their retaliation plan, they're starting to sell their US government bond holdings. And the worry was that there wasn't going to be any demand, or well, the worry was demand was going to be really weak for US bonds when they start to try and issue bonds and borrow more. The international community, the worry is they're going to kind of, yeah, I'm not touching that now. I don't like this Donald guy. Anyway, haven't they got a debt problem? Hmm. Isn't there credit risk with that now? Maybe I don't want to buy that anymore, right? That was the worry. This 2-year auction happened, which was the perfect litmus test for this concern, and it was a shocker. Really bad demand. I'll give you a little bit of lingo. The, uh, the, it had a below-average bidding by non-dealers. So out of everyone who bid to buy these bonds, 79.3% of the book were non-dealers. So the dealers are the big, big US banks who are kind of the bedrock of these auction processes, right? And we want to know, right, who out there's, other than these big primary dealers that have to buy this stuff, who out there's interested? 79.3%, it maybe sounds quite high. That's a really low number, well below average for the kind of demand book for these auctions. Proving that concern. Maybe foreign governments don't want to buy this stuff anymore. Okay. Secondly, there was a tail of 2.3 basis points. So this is talking about the yield at which the bond gets sold. Okay. A tail, that means that the, a tail of 2.3 basis points means that the yield on the auction in the end was 2.3 basis points higher than it really should have been, in inverted commas. Again, another key reflection that demand was really weak. Okay. This auction was a shocker. It was that straw that broke the camel's back. And then these bond markets just collapsed along with the equity markets. And that seemingly is when Trump kind of stepped in and went, hang on. All right, maybe it's time. Maybe my kind of escalate to negotiate, maybe the escalation part has reached its peak. Yeah.

I wonder whether that was always the trigger point. It wasn't a reaction effect, actually. This was engineered where, yeah, let's escalate. Let's use leverage, let's maximize the drama. And only when we start to see a meaningful shift in the yields, like you said, we will then back off this. But let's push it as far as we possibly can. To make people like us think this is 2.0, not 1.0 Trump to force their hand. One thing though, though, has his hand now weakened knowing now that we know what the stop loss is almost?

Yeah. So people are talking about this stop loss. I was reading an article. So is the stop loss 12% on the S&P? 'Cause that's how much the S&P sold off in those 4 days, right? Is that Trump's like, oh God, tap out, we've gotta change this now. I honestly, I don't think it is. I honestly think, I know he gets, I know the, look, the left-leaning media hate Trump, so they're always gonna come out and, you know, this talk of him caving and tapping out and big U-turn and oh my God, he looks stupid now. I, if I was a betting man, I think this was just all part of his plan and it's actually going perfectly. And if he's right, and I don't know if he's right, but if he's right and 75 countries are now in line to negotiate, then if he's kind of scoring his performance himself, I mean, he's, I imagine he's always scoring himself pretty damn highly, but I would say he's pretty content with how it's going. I don't think what you read in the media is necessarily a fair reflection on the situation. That's my opinion.

I mean, yeah, that tail's a little tighter on that bell curve for Trump. Self-marking system. But China, China then quick word on China. So there was reports citing sources from Bloomberg earlier today that China's top leaders, they're going to be meeting. This is apparently an ad hoc meeting. So when you are in and around markets, you know, whenever there's an ad hoc, more of emergency feeling to a meeting, it always kind of piques your interest. 'Cause you're like, well, what if they say something? When are they speaking? What are they talking about? All that we know at this point in time is obviously you've gone through this process, you know, so just to recap, like you touched on earlier, so on Wednesday, China on Wednesday said it would impose an 84% tariff on all imports from the US starting today, April 10th, in response to the US's 104% tariff on Chinese goods. Later on Wednesday, Trump further escalated to 125%. And paused, as you said, for additional levies on dozens of other trade partners. So of course they're going to be talking about this, but I mean, what the source was saying was about focus on support measures for housing, consumer spending. There was quite a lot of media press coverage in China earlier in their People's Daily. So you get a lot of state-run kind of engineering, social engineering, almost of messaging from the government. To the country, and they were talking about they've got plenty of room, policy room, typical levers, I guess, of policy would be borrowing directly, costs, reserve requirements that banks hold. And also quite a lot of analysts at banks have been talking about a measured depreciation of the currency, the yuan against the US dollar. And they were talking in the realm, Standard Chartered at least, about 5 to 10%. Before end of 2025. So I guess, what does China have room then to go about its business here? And I guess what would you be looking out for next in terms of, you know, it felt like with 2016 when we had more of a geopolitical edge than just trade because North Korea were involved. Japan was involved and it was the nuclear missile testing that was happening. It felt like we got to peak escalation and actually technically there wasn't much else we could go without full-blown military engagement, which was incredibly low probability. So it feels like China here have a little bit of tools that they can turn to. So how much further can that go in your mind?

Well, I don't know. I would say my feeling on it, and again, look, it's just my feeling. Who knows? People might think something else, but my feeling is that up until this week, China felt like they were happy in control and just happy to stand up to the bully that is Donald Trump and his tactics, right? And look, devaluing their currency, is a really nice little tool they've got in their back pocket, which can offset some of that tariff kind of situation. Okay. And remember, they control the value of their currency so they can start pegging it lower. Okay. However, I mean, we are talking now, like, what's the tariff that the US have on China now? It's like a hundred— am I right in saying it's 150%? Are we up to now? Oh no, sorry, 125% I think we're up to, right? I personally think this is now, they don't have tools that are powerful enough to counteract this. Now the tariffs have got to such crazy levels. You know what Trump's like, he's not backing down. And that's because he feels the US, the China have got way more to lose than the US have. So he feels he's in a position of strength. He's not going to back down. He'll go as high as you want. He'll go 500% tariff if you want. Right. So I personally think this emergency meeting from China, although they're billing it as a discussion around internal tactics, I actually think this is an emergency meeting for them to go, hang on, have we gone far enough down this path that we were playing? And maybe we need to kind of do a bit of a U-turn and start being a little bit more, having some kind of laying some olive branches down the path and maybe getting to the table. That's my sense. Of course, if that doesn't happen and they have this meeting and they come out fighting and ramp up their tariffs in retaliation again, well, these markets are on the way back down, right? This rally that's happened, it's sell the spike. I'm looking at the NASDAQ now, it's breaking new lows and it's, you know, so it's kind of happening already. The NASDAQ's down 3.3%. Right.

Yeah. So just to mention though, we ramped yesterday, but we're down quite heavily again today. So the next move, how today and tomorrow settles is going to be so interesting as a close for the week. So final, maybe two questions here and to pivot more towards investment banks and their trading activities and just to give it more visibility and insight to people. Obviously a lot of our audience thinking of working in these places. So one was, I was scouting around trying to find, has any bank come out with some Snap commentary? And UBS have come out with their forecasts of What next? Because I guess that's the big question. And they're talking not like the end of this week, but more the end of the year sort of thing. So they've got their scenarios of which they have their percentage assigned probabilities, of which the base case with a 50% probability is that the S&P 500 rebounds to 5,800. Essentially they're saying that an effective US tariff rate at 27% from 9% before April 2nd. Fed rate cuts, tariff moderation expected would be the criteria. The other options then, the other 50% left on the table is split. So the least probable, they say 20%, we're looking at trade war resolves, growth stabilizes, AI optimism kicks in, S&P could go 6,500.

Oof, new highs.

And then the 30% probability, so downside hard landing, tariff pause collapses, retaliation resumes, recession hits, S&P could fall. I love this, could fall to a 1,000-point range from 3,500 to 4,500, and a 10-year yield drops to 2.5%.

Wow.

So I just wanted to get, obviously, your your take of what people should take away from these types of forecasting in this type of environment?

Well, look, they have their models, right? And their models have inputs. And when your inputs start to go into crazy mode with volatility up and down all over the place, then the model and its output goes into crazy mode. These are ridiculous numbers, like ridiculous. You might as well say, hands up, you know, we've switched off the model because we've got no idea. That's basically what they're saying. Now, I'm not blaming them because right now, I mean, I don't have any idea either. I mean, even if you literally just took, I'll just very quickly, if you just take the last sort of 24 hours because I talked about that bond auction on Tuesday that was really bad. What then happened on Wednesday, which was another catalyst for this big pump higher in stocks, by the way. Yes, it was Trump doing a UE and kind of another 90 days please. But we had a 10-year government bond auction in the US on Wednesday that was really strong demand, like the opposite of the Tuesday one. So it's like, oh wow, hang on a minute. And their foreign and domestic investors were back in force. Demand was super strong. Yields came in lower than where they were anticipated to. It was literally the exact opposite.

He made the call, Piers. He made the tweet on Truth Social. Yeah. Then he picked up the phone to all those who had come forward and said, look, now's the time. Let's go.

Pick it up.

Move it up.

Well, he did say it's time to buy. And I guess his buddies did. Maybe that was part of the deal. I'm only going to sit down at the negotiating table on tariffs if you buy my debt. I mean, I wouldn't surprise me at all if that was the play. But anyway, so right, that's positive. Suddenly a strong bond auction, obviously stocks have gone up. Now you've got this inflation data, really positive, right? So that's, if you throw all that in a bucket, well then fine, you might be saying like the UBS, it's like maybe there's a super positive outcome here, 30% chance of new all-time highs. But then you counter and you go, well, hang on a minute. Yeah. Rest period of 90 days on tariffs. Well, as I said, there's still 10% tariffs on the whole planet, right? 125% tariffs on China. And who knows where that escalates? That's still in theory inflationary. So that good inflation report we had for March, Who knows what's coming in April? Inflation could go back up. If it does, forget the Fed coming in to kind of backstop this with rate cuts, right? And so I think that's your— and if that trade war with China super escalates, well then that's your, whatever it was, 20% chance of big recession and 2,000, 3,000 point collapse in the S&P. What's going to happen? Neither of those two extremes. It's going to be somewhere in the middle where, I mean, I don't know.

Probably something you can give me a more definitive answer on is that JP Morgan's earnings come out, I think tomorrow. And it's the start of bank earnings season. And a lot of the analyst commentary that I've been reading is about how Wall Street traders are set to report their best quarter in more than a decade. And so, yeah, just wanted to, for you to explain that. And also at the same token though, investment banking revenues have just been, I mean, the revenue, the pipeline has been killed by this volatility.

Yeah.

So just to get again, a bit of a recap of why these particularly pure play investment banks are going to have some pretty lopsided results that we can expect over the coming week or two.

Yeah. Well, broadly, earnings season is coming. This is just going to add another fascinating kind of leg of information to this saga because whilst all this turmoil has been going on in markets, actually, what's the genuine tangible impact on companies and their revenues and revenue growth and profits and so on? We're about to find out. So it could be that general corporate performance is better than this stock market turmoil might have indicated, right? So you could get a positive bump from earnings. It could go the other way, mind you, where these companies might trim all their forecasts for the year ahead because of all this uncertainty, in which case it could be a catalyst for the downside. I mean, again, it's another juggling act with that. Who knows? But I think with banks particularly, when all this volatility's kicking off, it is perfect for their global markets divisions. 'Cause they handle trades, they facilitate trades. They don't care if markets go up or down. They just want volume. And the volume of trading has just surged and spiked. That's what's driving all this volatility. So the fees they're generating off their kind of that, that kind of big engine that helps buy-side firms, hedge funds, asset managers, and so on. Process all the trades there. That's gone through the roof. Really big revenue growth for their global markets division. But as you said, trot across to the other side of the building, your M&A teams, your IPO and equity and debt capital markets teams, they're just sat there twiddling their thumbs. There's no work. And so that side of the bank's, I mean, it was supposed to be the rebirth. It was supposed to be 2025 was supposed to be the bumper year things are back for the banking teams and it could not have gone any differently. So that, yeah, it's a real double-edged sword for the banks here.

Sticking on that theme, maybe the final word then for the hedge fund community, 'cause I saw an article today in the FT talking about how Renaissance Technologies, this is like kind of the holy grail of the quant world. Yeah. These guys, I think it's the Medallion Fund. It's just like the money-making Machine. And apparently their kind of hedge fund strategy, they've got wrong-footed by Donald. And yeah, I just wanted to kind of get a vibe for, and just an explanation perhaps for those who are not fully aware of the differences here between, you've just said, if I'm sat there as a trader at a JPMorgan Goldman Sachs, it's like life couldn't be better because the volatility's so high, so much activity. Hedge fund, what are they feeling like at the moment?

Well, I would say firstly, in a long-only asset management firm, this is as bad as it ever gets. It cannot get worse. Now, if you're in a hedge fund, you can be long and short. A lot of them play these kind of market-neutral strategies where they're hedged off. It's supposed to be This is why I think maybe of all of these stats, you know, S&P up, God knows what, yields flying all over the place. Yeah. Out of everything, Renaissance losing 9% in, was it 9%? Did you say in one month?

Yeah, I didn't have 1%, but I think I read 9%.

That tops everything. They never lose money. Like ever. So I don't know what's gone wrong, but I think it just shows you Monday and Tuesday when suddenly just everything collapsed. I guess their models weren't, didn't have that scenario in the equation.

He's a special guy.

You can't, I can't, I honestly can't believe it. I mean, I like for some hedge funds, this volatility's awesome. Right. It's a really, really good— it just obviously depends on what strategy you're running. There's so many hedge fund strategies, but there's quants that I'm, I still cannot believe Renaissance got whacked. It's 'cause Donald, that's stunning.

You cannot, you cannot have a model to predict future behavior of Donald Trump.

And that's, that's his playbook.

Yeah. I mean, well, look, we'll end it there. We would love to hear what you think. So depending on where you're listening to this, if it's on Spotify, I know you can drop a comment. If it's on YouTube, yeah, give us your point of view. I'm sure by this time next week when you listen, we would have done another U-turn and we'll be talking about something completely opposite situation of what we've just described. So can't wait for that one. Thanks very much, Piers.

No worries. Have a good one.