The Rundown - Debt Market Flashes Warning Signs, Trump Says ‘Great Time to Buy!!!'

Episode Date: April 9, 2025

Stock market update for April 9, 2025.

Public.com presents the rundown, your daily market update in five minutes. My name is Zaid Admani, and today is Wednesday, April 9th. In today's episode, we tell you about how the markets choked away the biggest lead in history and why companies are preparing for a recession. We also tell you about concerns in the bond market that is freaking out investors. Then stick around to the end of the show to find out why pharmaceutical stocks are getting crushed, and we'll tell you the last time that tariffs in the U.S. were this high. Spoiler alert, it was over 100 years ago.

We got a great show for you today. Let's go. Yesterday we'll go down as one of the wildest days on Wall Street. The day started off with the markets booming. Both the S&P and NASDAQ were up more than 4% because of rumors that Trump was ready to cut tariff deals. Well, it turns out no deals got announced and the markets tanked to close the day in the red.

The S&P was down one. 1.5% and the NASDAQ dropped 2%. And this was a historic reversal. The S&P has never had a day where it was up 4% and then end of the day down more than 1%. It's never happened before. I mean, I haven't seen a blown lead like that since the U of H basketball team blew a 12-point lead in the championship game on Monday. Sorry, that was the last college basketball joke, I promise. Overall, the U.S. stock market has lost a total of $7.7 trillion in value since Trump's Liberation day, that's the most ever in a four-day period. So the last few days has been a historical wipeout for the stock market. And this is before any tariffs actually went into effect, because

the tariffs started as of this morning. Remember, there's a 10% baseline tariff on all imports coming to the U.S. And then some countries have an additional reciprocal tariffs tacked on top of that. The highest one being slapped on China at 104%. And unfortunately, things continued to escalate. China just announced their increasing tariffs on U.S. imports from 34% all the way up to 84%. So I think it's fair to say the two biggest economies in the world are officially in a trade war. And that's going to impact a ton of companies, especially a company like Apple, which makes a ton of products in China. Their stock continues to get crushed. Apple stock has lost 23% over the last four trading sessions. So it's not a fun time right now. But leave the doom scrolling to us. We'll keep you guys

updated on what's happening in the markets every day. And we'll do our best to throw in some jokes where we can. So make sure you guys are subscribed to the podcast to stay in the loop. I can't believe it's only Wednesday. This has been a crazy week. All right, let's talk about how companies are starting to react to the uncertainty around tariffs. A few companies have now pulled their earnings guidance, most notably Delta and Walmart.

Now, whenever companies pull their earnings guidance, it's kind of concerning because it's a sign that they have no idea what the next few months will look like for their business. And some of the comments on these executives is pretty concerning. Like, for example, Delta CEO says that revenues have flatlined, and the company is acting as if they're going into a recession. You know, recessions typically means less traveling for both business and leisure. Delta CEO also said that companies are going into a defensive mode. So not a lot of positivity coming from him.

Walmart is also saying something similar. They're going to be impacted by tariffs because they import a ton of stuff from China, everything from toys to electronics. So a 104% tariff on Chinese imports is going to be a potential hit to Walmart's profits, which is why they've pulled their earnings guidance. So all of this is adding to the uncertainty. If company executives don't know what their business is going to look like over the next three to six months, it makes it even harder for investors to figure out how to value these

companies. And that leads to volatility and a loss of investor confidence. We're all just on this crazy tariff roller coaster. I'm talking everyone from company executives to investors to consumers, to consumers, to consumers, and we're all riding this roller coaster with a blindfold on. And nobody knows when this ride is going to be over, except for maybe Donald Trump. But man, there's only so much ups and downs and loop-de-loops you can take before you pass out or throw up. Now, if the stock market tanking wasn't devastating enough, there's now growing concerns about the bond market

and a possibility of a debt crisis. We don't typically talk about the bond market on the podcast, but the Steve's sell-off of U.S. treasuries has gotten a lot of attention. The 10-year U.S. Treasury yield briefly went above 4.5%. It's trading a little bit below that right now, but that's still a major jump from the 3.9% level that it was at on Friday. And this is pretty unusual because typically when stocks sell off, people buy U.S. Treasuries, which drives yields lower. That isn't happening right now, which is why some people are questioning the safe haven status of U.S. government debt. U.S. Treasury yields aren't supposed to have wild swings like this. They're supposed to be like a comfort blanket for investors.

So whenever you see wild swings in bond markets, it can spark a dramatic loss in investor confidence. And that's what we're seeing play out right now. US treasuries are headed for their worst week since 2013. Investors are now dumping stocks and treasuries and deciding to hold cash. And some are buying gold because the price of gold is hovering near record highs. But this is causing some financial experts to panic. Like former U.S. Treasury Secretary Larry Summers recently posted on X saying that this highly unusual patterns suggest aversion to U.S. assets in global financial markets and that the U.S.

is being treated like a problematic emerging market. Now, the other thing you might start hearing about is the basis trade blowing up. And here's a simple breakdown of what that means. See, hedge funds typically do this trade where they buy U.S. Treasuries and short futures contracts. Now, this is typically a low-risk trade, so hedge funds borrow money to amplify their returns. But now, because of the wild swings and bond prices, lenders are starting to start. starting to get nervous, which could prompt a margin call. And when that happens, hedge funds have to quickly sell treasuries to pay back their debt, which floods the market with treasuries, which pushes the price of treasuries even lower,

creating this nasty feedback loop. And that might be what's happening right now. And all of this is raising the odds of the Fed stepping in to do an emergency rate cut or start buying bonds. The Fed did this back in 2020 during the pandemic. They started buying large quantities of bonds. So we'll see if Jerome Powell and the Fed gang step in. But yeah, you're going to start hearing a lot about the bond market.

So we're going to be keeping a close eye on it as well. Everything's just blowing up right now. Let's talk about some stocks making moves today. Shares of Constellation Energy are up this morning after Citibank upgraded the stock to a buy rating with a price target of $232. Constellation Energy has lost nearly half its value since late January, leading Citibank to believe that the stock is now at an attractive value. They're ready to buy the dip. On top of that, City noted that any artificial intelligence dealings would be a boost for the business as well.

AI data centers require a ton of energy, and Constellation Energy offers nuclear energy capabilities for these AI companies that require all this power. As a result, shares are up about 2% this morning in reaction to this upgrade. Constellation Energy was one of the best performing stocks in the S&P 500 last year. That hasn't been the case this year, though. They're right in the middle of the pack. Now, on the flip side, pharmaceutical stocks are getting crushed this morning after President Trump said he would soon enact tariffs on the industry.

Trump wants pharmaceuticals to be manufactured in the U.S. He believes that America could be put into a pickle if a disrupting event cuts the country off from its international medical supply chain. As a result, shares of Eli Lilly, Merck, and Pfizer are down more than 3% this morning, and Nova Nordisk is down north of 2%. Let's wrap the show with the fun. This one's not really a fun fact, but very interesting nonetheless. Tariffs in the U.S. are at the highest level in over 100 years.

As I mentioned earlier, starting today, a 10% baseline tariff went into effect on all imports coming into the U.S., along with some big-time reciprocal tariffs on a ton of countries, including a 104% tariff on China. If you add all that up, tariffs collected as a percentage of goods imported is now expected to be above 20%. It hasn't been that high since 2009. Just to put this into perspective, the average tariff going back the last 10 years has been around 2 to 3%. And we just 10xed it to like 22%. Absolutely wild. All right, guys, that's the rundown for today.

It has been one of the craziest starts of the week that I can remember. A lot of drama regarding the 10-year treasury. There's rumors of other countries retaliating as well. There might be some tariff deals on the way. So much uncertainty in the air. But like I said earlier, leave the doom scrolling to us. We'll make sure that we're on top of everything and we'll keep you guys in the loop. New episodes come out every day. So make sure you guys are subscribed for the podcast to stay in the loop. And if you guys enjoy the show, consider giving us a five-star rating on Apple and Spotify. And if you have an extra 10 seconds, consider leaving us a comment on Spotify.

A lot of people read the comments. And that engagement really helps us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow. Run Down, your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as a recommendation to buy, sell or hold that security.

Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Aydidmani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, Member Finra and SIPC.