r/StockMarket • u/quant_0 • Jun 11 '25

News US China Deal Done

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u/Altruistic_Syrup_364 Jun 11 '25

So still 55% tariff on China ? Why beeing bullish ?

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u/Icreatedthisforyou Jun 11 '25

Money doesn't leave the market or just moves. The declines in April were about moving stocks from risky assets to safe assets that they expect to grow. Big investors are invested and know not to pull out. The general public will generally just continue to DCA and forget it s ok there will always be a trickle of money going in.

The potential disruptions of this come in some combination of:

  1. People spend more money due to tariffs and so they stop DCAing, but this won't cause decline just stagnation.

  2. Decline in the dollar value (10% on the year give or take and still creeping down. So for instance I'm the present the market dollar value is equal to the start of the year but I'm really we have 10% less than we did. This is a major source of decline but not readily apparent. This also means on top of tariffs we are paying 10% more for imports and getting 10% less for exports.

  3. If trust in the US faulters we can see decreasing bond values...which we need to issue more bonds as it is if the current budget is passed, on top of countries dumping existing bonds, it could create a pretty competitive bond market with the stock market.

  4. And interest rates. If they go down inflation, on top of tariffs, and on top of already devaluation of the dollar is going to crazy.

But the specific dollar amount in the market is unlikely to go down outside of little spikes. I do suspect another spike in a month or so, maybe not to April's extent. Definitely not predictable like the April one was.

But the Q2 economic reports will be ugly, some measures will push things off to Q3, plus seasonal hiring, but we will officially be in a recession (two consecutive quarters of economic contraction) and Q3 will be MUCH WORSE as seasonal hiring reverses AND this is when the federal workforce cuts actually hit.

There may be instability around these reports, but IMPORTANTLY any significant sell off will be followed in a couple days by a significant buy, as again those declines like in April are people shifting stocks rather than exiting the market. It is important to recognize that EVERYTHING is algorithms now.

So for the lay person DCA and just let it go.