Walk-Squawk Morning Wire

Liberation Day Flashbacks, Tariff Shocks & The Next Melt-Up?

🔮 Market Musings: Tariffs, Bitcoin Dumps & the Relentless March of Tech

Remember Liberation Day? Traders dumped everything they could grab S&P futures, Bitcoin driving BTC down to around 82,300 before the dust even settled.

Then there was Trump’s weekend strike on Iran. Markets were shut, except Bitcoin. Naturally, BTC got smacked again, down to 98,250 before snapping back. The short sellers probably felt like geniuses for an hour. Most of them flip burgers now.

Fast-forward to this weekend: another tariff shock. Trump slapped the EU and Mexico with a 30% levy and with other markets closed, Bitcoin was once again the only punching bag open for business. Cue the next crop of heroes pounding it down to 117,000.

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💡 The Big Picture: Relative Prices Are What Matter

Meanwhile, Nvidia hit a mind-bending $4 trillion market cap. So what? In a world where money is just code on a Fed screen, $4 trillion alone means nothing. What matters is what things are worth relative to each other.

Look around:
✅ S&P 500: New highs
✅ Nasdaq 100: New highs
✅ Bitcoin: Same
❌ Bonds: Sinking ships

It all makes sense if you see what’s coming — a monetary reset. Governments can’t pay down these mountains of debt honestly, so they’ll inflate it away instead. Bondholders get crushed. And the system will just force banks, pensions, and weaker nations to keep buying the debt anyway.

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🪙 So Where’s the Shelter?

Boomers and central banks still cling to gold and they’re not entirely wrong. Since the 2022 bear market lows:

• Gold: +108%

• S&P 500: +80%

• Nasdaq 100: +120%

• Euro Stoxx 50: +68%

Fun fact: the entire Euro Stoxx 50 is now worth about the same as Nvidia alone. Germany’s DAX? It’s worth less than Bitcoin.

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🚀 The Bold Are Winning

This new era belongs to risk-takers and innovators. Just look at these moves since 2022:

• Nvidia: +1,452% (AI juggernaut)

• Meta: +750% (Zuck’s big AI gamble is working)

• Coinbase: +1,100% (crypto rails + AI + blockchain)

• Palantir: +2,352% (the fusion of AI, defense, and Big Brother)

In a world where fiat can be debased at the push of a button, real assets and real innovation are the shelter.

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📈 BofA’s Hartnett: Bonds Are Out, Big Beautiful Bubbles Are In

Michael Hartnett, Bank of America’s top strategist, says the “bonds are bullish” call is done for now. He’s turned bearish on long-duration Treasuries just as the US ramps up another epic borrowing binge to pay for One Big Beautiful Bill. Trump can’t cut spending, can’t cut defense, can’t cut debt so tariffs and more debt are the plan. One Big Beautiful Bubble funds it all.

Markets don’t care, yet. The MOVE and VIX indexes (your best read on bond and stock fear) have sunk to their lowest since February. In Hartnett’s words: no policy dragons. Until bond yields break out (US 5.1%+, UK 5.6%+), the melt-up rolls on.

But watch for cracks. High-yield bonds and Japan banks are stalling. Some momentum stocks are blowing up. Under the surface, the rotation is brewing.

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🪙 The 2020s: Decade of Inflation, Decade of Relative Moves

Why bonds are doomed: this is a decade of inflation the mirror image of the NIRP/ZIRP era before. Governments will “reset” debts by debasing currencies. Savers lose, bondholders get burned, and real assets outperform.

The S&P might be hitting fresh highs, but relative price moves tell the real story:

• Nvidia alone = entire Euro Stoxx 50

• Bitcoin > Germany’s DAX

Ignore the headlines, watch the relative moves.

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⚡️ Near Term: Bubble Signs & Melt-Up Risks

Hartnett’s radar:

• The BofA Fund Manager Survey screams euphoria.

• Cash levels under 4%.

• Soft-landing optimism >90%.

• Everyone’s crowded into the same trades.

Consensus: more upside into Jackson Hole, then a healthy back’n’fill. With no big policy shift yet, the bar for a reversal is high but this is a market that punishes complacency.

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🌽🫘 USDA WASDE: Right Down the Middle. Now It’s All About Weather

Friday’s USDA WASDE delivered exactly what the market wanted: no big surprises.

Corn: Old crop exports up, feed down, basically net neutral. New crop harvested acres trimmed a bit, yield steady at 181 bpa. Ending stocks came in at 1.660 billion bu. Friendly on paper, but perfect weather means the trade expects yield could creep higher in August. Iowa corn conditions are the best since 1994, that’s 17% of US production right there.

Soybeans: Bigger crush (+50M bu) offset by softer exports (-70M bu). New crop ending stocks up a touch to 310M bu. Old crop unchanged at 350M bu. Again, weather will call the shots.

What’s next? Volatility is dirt cheap, corn vol is even lower than 2020 levels so if Mother Nature flips the script, the reaction could be outsized.

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📊 Where Funds Stand (CFTC as of July 8)

• Corn: Net short -203,861
• Soybeans: Net short -6,641
• SRW Wheat: Net short -64,071

Spec money is still leaning short. Any real weather or macro surprise could force them to scramble.

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✅ Bottom Line

• Tariffs, debt, bubbles, this is a market looking past policy noise and chasing relative winners.
• Bonds are the new risk asset.
• Real assets and real innovation are the new shelter.
• For grains, weather is king and cheap vol means surprises can hurt.

Stay sharp, stay flexible, and remember: watch what’s relative not just the headlines.