Nasdaq 100 Dented as Trump Renews Tariff Threat Against Apple and the EU
Nasdaq 100 Dented as Trump Renews Tariff Threat Against Apple and the EU
Also, 30-year T-bond, gold, crude oil and euro futures
- Nasdaq 100 E-mini futures (/NQ): -1.42%
- 30-year T-bond futures (/ZB): +0.28%
- Gold futures (/GC): +1.41%
- Crude oil futures (/CL): +0.13%
- Euro futures (/6E): +0.39%
President Donald Trump jolted global markets on this morning when he announced he was considering 50% tariffs against the European Union and 25% tariffs against Apple (AAPL)unless it brings production back home. With respect to the former, one can’t help but think it’s just the latest effort to incentivize negotiations with Europe that have been dragging; Trump has repeatedly backed down from his most aggressive threats. It’s not quite a “Sell America” day, although stocks and the U.S dollar are down while gold is rallying; bonds are faring well.
Symbol: Equities | Daily Change |
/ESM5 | -1% |
/NQM5 | -1.42% |
/RTYM5 | -0.74% |
/YMM5 | -0.69% |
U.S. equity markets were rudely awoken today to another tariff headline, although markets have been moving off their lows over the course of the morning. With Apple in the tariff spotlight, the Nasdaq 100 (/NQM5) has been the loser to the downside, upending a week when it was the clear winner ahead of its small cap counterpart the Russell 2000 (/RTYM5). On the other side of the long holiday weekend, Nvidia (NVDA) is scheduled to report earnings Wednesday.
Strategy: (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 19000 p Short 19250 p Short 23000 c Long 23250 c | 64% | +1100 | -3900 |
Short Strangle | Short 19250 p Short 23000 c | 70% | +5950 | x |
Short Put Vertical | Long 19000 p Short 19250 p | 81% | +625 | -4375 |
Symbol: Bonds | Daily Change |
/ZTM5 | +0.05% |
/ZFM5 | +0.17% |
/ZNM5 | +0.26% |
/ZBM5 | +0.28% |
/UBM5 | +0.3% |
Bonds have been pummeled during the Trump trade war, which is to say today’s outperformance is relatively surprising. U.S. Treasuries are rallying across the curve, with long-end bonds nearly a full 2 points off the fresh yearly lows that were carved out yesterday. Fed rate cut odds over the next few months continue to deteriorate, with the odds of a 25-basis-point (bps) rate cut lower today than a week ago for each of the June, July and September Federal Open Market Committee (FOMC) meetings.
Strategy (63DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 104 p Short 106 p Short 118 c Long 120 c | 63% | +515.63 | -1484.38 |
Short Strangle | Short 106 p Short 118 c | 69% | +1421.88 | x |
Short Put Vertical | Long 104 p Short 106 p | 81% | +312.50 | -1687.50 |
Symbol: Metals | Daily Change |
/GCQ5 | +1.41% |
/SIN5 | 0% |
/HGN5 | +0.74% |
As has been the case over the past few months, tariff talk is good news for metals, in particular gold (/GCQ5). Bullion hit its highest level since May 8 today, coming within a stone’s throw of scaling 3400 again. Technical momentum has improved in recent days, with the daily five-EMA (one-week) and 21-EMA (one-month) holding as support this week. Likewise, gold volatility has expanded (50.7 low on Monday to 57.4 today), a contemporaneous indicator for bullish price action in recent months.
Strategy (66DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 3075 p Short 3100 p Short 3675 c Long 3700 c | 66% | +640 | -1860 |
Short Strangle | Short 3100 p Short 3675 c | 73% | +5100 | x |
Short Put Vertical | Long 3075 p Short 3100 p | 84% | +320 | -2180 |
Symbol: Energy | Daily Change |
/CLN5 | +0.13% |
/HON5 | -0.27% |
/NGN5 | +1.69% |
/RBN5 | -0.08% |
Energy markets are yoyoing on the tariff news, although both crude oil (/CLN5) and natural gas (/NGN5) have turned back into positive territory. As the morning has unfolded, there’s a sense that the Trump tweets are just a negotiating tool that won’t significantly disrupt global trade. Elsewhere, tensions remain among the US, Iran and Israel regarding nuclear negotiations, and the long weekend may be prompting some traders to take on long deltas in energy as a geopolitical hedge.
Strategy (55DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 51 p Short 52 p Short 71 c Long 72 c | 64% | +220 | -780 |
Short Strangle | Short 52 p Short 71 c | 70% | +1630 | x |
Short Put Vertical | Long 51 p Short 52 p | 82% | +130 | -870 |
Symbol: FX | Daily Change |
/6AM5 | +0.65% |
/6BM5 | +0.46% |
/6CM5 | +0.64% |
/6EM5 | +0.39% |
/6JM5 | +0.93% |
Trump tariff talk is leaving a clear imprint on FX markets, where the US dollar ($DXY) is down across the board. $DXY has dropped below 100 again, while the euro (/6EM5) has climbed back above 1.1300. Volatility in FX futures is relatively constrained, however; the Canadian dollar (/6CM5) has the highest IVR at 62.8.
Strategy (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 1.1 p Short 1.11 p Short 1.17 c Long 1.18 c | 64% | +325 | -925 |
Short Strangle | Short 1.11 p Short 1.17 c | 70% | +912.50 | x |
Short Put Vertical | Long 1.1 p Short 1.11 p | 82% | +137.50 | -1112.50 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
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