Investors Pile Into Bitcoin and Show Little Concern About a Barrage of New Tariffs
Ironically, the failure to respond negatively to tariff headlines has turned into a positive factor for stocks.
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After hitting new all-time highs on Thursday, the market is giving back gains early Friday on headlines that President Trump has put a 35% tariff on Canadian imports. There are some exemptions for goods in the free-trade agreement, but the headline is another convenient excuse for investors who are looking for a reason to lock in some big gains after a great run.
The market has been dealing with tariff news all week, but has shown little concern. After brief pullbacks, buyers have jumped in and continue to push the indexes higher. In view of this behavior, it is very likely that dip buyers will be anxous to buy any pullback on the news of Canadian tariffs.
Much to the consternation of the bears, the tariff issue is not having any significant negative impact on the market action. Ironically, the failure to respond negatively to these headlines has turned into a positive factor for stocks as poorly positioned economic skeptics are forced to acknowledge that the market doesn’t care about their predictions of disaster.
Many economists are still convinced that the fallout of tariffs will eventually hit hard but investors are focused on strength of the U.S. economy, a booming AI industry, and optimism about the upcoming earnings season. The tariff news just doesn’t matter much right now.
A good example of the high level of speculative interest and optimism is a strong breakout in Bitcoin IBIT to a new all-time high. After breaking out earlier this week, IBIT is jumping over 4% on Friday morning. It is a beautiful-looking chart, and there is obviously very strong momentum.
The biggest challenge in the market is trying to find entry points. With nearly a 1,000 stocks hitting new highs in recent days, there aren’t many dips to be bought. Investors who don’t like to chase strength in extended charts are not loving this action.
The main trend of the price action recently has been soft opens and then intraday strength and a solid close. Conditions look good on Friday for a continuation of that sort of action.
At the time of publication, Rev Shark was long IBIT.
