Turnaround Tuesday, bonds sell-off, Levi surges, Medicare surprise, notable calls
My son is laying next to me watching the charts on my Bloomberg screen. Looking at the intra-day S&P 500 he says, “It looks like a volcano.” Indeed, son, it feels like everything is about to blow.
Markets are in meltdown mode — but Waratah Capital’s Jeannine LiChong says it is too early to buy. In this episode of In the Money with Amber Kanwar, the veteran fund manager shares her strategy for navigating extreme market volatility, tariff uncertainty, and looming recession risks. Tune in! Listen on Apple, Spotify or here.
This newsletter is sponsored by BMO InvestorLine. The newsletter and the podcast may give you some interesting investment ideas. To help you research and potentially act on those ideas, consider BMO InvestorLine. Their platform provides the resources you need to analyze potential investments, with the valuable tools and research you need when exploring the market. Plus, you’ll find the BMO Investment Learning Centre with educational courses and videos empowering you to make informed decisions. Learn how you can earn up to $3,500 cash back when you open a new account.
Simmer: Futures are higher after a wild session yesterday. The S&P 500 started the day steeply lower but then staged an 8% intra-day rally from bottom to top on a headline that turned out to be fake. Markets ripped after an erroneous tweet about the US administration putting a 90-day pause on tariffs gathered steam. David Burrows of Barometer Capital said moves like this are not a sign of a healthy market. “There is nothing about an 8% intraday move that can be characterized as HEALTHY,” he posted on X, “Market is currently uninvestable.” (You can hear more about his views in our interview a few weeks ago). Japanese markets ripped overnight as US-Japan trade negotiations appear to be advancing at top speed. The prospect of a deal is supporting markets this morning. The same progress can not be said for US-China trade. US President Donald Trump is threatening to hit China with even more tariffs. Rather than back down, China went on the offense with the Commerce Ministry saying they are willing to “fight till the end.”
About bonds: While equity markets put in mixed performance yesterday, the bond market sold-off hard. The yield on a US-10 year was 3.9% on Friday and it is currently sitting at 4.2%. The sell-off in bonds is a bit of a head-scratcher given it typically benefits from risk-off moves in the market and investors are pricing in huge rate cuts by the Federal Reserve. Traders are struggling to explain why they are under pressure. “One explanation is investors expecting higher inflation and pricing-out Fed cuts – but inflation breakevens did not rise,” wrote Citi’s economics team, “Or it could be that foreign investors are selling US dollar assets to buy domestic assets – but the US dollar did not weaken. Most concerningly, this could be an early sign that investors are looking to liquidate positions even in high-quality assets to raise cash. Fed officials are likely watching these movements and could respond dovishly if the mysterious rise in Treasury yields continues.” Andrew Brenner at NatAlliance said its because liquidity is so poor in the markets that even a little bit of selling can cause big price moves. “Long Treasuries had one of the worst days since, you guessed it, Covid,” wrote Brenner this morning. While some have theorized the pressure in the bond market may be coming from China selling treasuries, Brenner disagrees. “We have been banging the tables for years that the depth of liquidity in the treasury market is poor and has been for years.”
Immune boost: Shares of Medicare insurers in the US are popping this morning after the government announced reimbursement rates would be significantly higher than expected. Shares of Humana (+11%), CVS (+6.5%) and UnitedHealth (+5.8%) are all higher after the reimbursement rates for 2026 will be up 5.06% vs the 2.23% previous proposal. CVS is also shaking up its management in the wake of a new CEO. The company announced former UPS CFO Brian Newman would become the new CFO effective April 21. Walgreens reported results this morning showing better than expected profit on cost cuts and strength in is healthcare business. Recall, Walgreens is being bought by Sycamore Partners and this is likely one of the last reports as a public company.
Snap a picture, bring it on: Shares of Levi Strauss are bouncing off a one-year low surging 13% in the pre-market. The iconic jeans maker is the first retailer to report results after the tariff announcements and for now says it should have “minimal impact.” Analysts aren’t so sure about that. “Levi isn’t immune to cost shocks or consumer slowdown,” wrote Stifel’s Jim Duffy. Levi maintained its full-year sales forecast calling for 3.5% to 4.5% growth this year. However, that does not include the impact of tariffs. “Uncertainty outweighs progress,” wrote Morgan Stanley’s Alex Straton, “Levi provided little/no tariff clarity.”
Notable calls: TD is getting more constructive on gas-weighted equities in the energy sector. They are upgrading EQT, Expand Energy, Gulfport Energy, and Anterro Resources on the back of their belief that post-April 2nd tariff announcements the fundamentals are better for natural gas than they are for oil. Goldman Sachs is out with a note warning that Brent oil prices could fall below $40/bl in late 2026 in an “extreme” scenario where global growth slows and OPEC+ halts production cuts. Their baseline, however, under a typical US recession scenario would be to see prices hover around $58/bl by year-end (10% lower from here). Shares of Wells Fargo are surging 5% after Piper Sandler upgraded the stock to overweight. Given the 25% pullback in shares from the February high, the analyst thinks now is an attractive entry point. Goldman Sachs is cutting American Airlines to sell after the stock cratered 50% since January. While the downgrade is clearly a bit late, it signals this is not a name they would recommend buying on the dip. The analyst warns the airline has higher leverage and is at risk of steeper estimate cuts than peers.
Submit your question for the show! Email questions@inthemoneypod.com
