The market’s losing streak has stretched to three days. The Dow, S&P 500, and Nasdaq each shed about a percent.
The trigger wasn’t gloomy headlines — it was data that looked too good.
“Economic data came in stronger than expected, and that raised doubts about whether the Fed will follow through with more rate cuts,” Bloomberg reported.
It’s one of those moments where the patient looks too healthy and investors start worrying the doctor won’t refill the medicine. Intel, however, managed a rally of more than 4% after Reuters broke word that Apple may buy a stake in the aging chipmaker. A deal like that could “deepen Apple’s supply chain security at a time when Washington is demanding it.”
Meanwhile, hedge fund veteran David Einhorn warned that even if AI reshapes the world, “the trillion-dollar buildout is so extreme that the eventual returns are highly uncertain.”
The image lingers: towers of servers humming on foundations of debt, taxi meters ticking while the traffic light refuses to change.
Foreign Money Flows In
Fears that foreign investors would flee U.S. markets in the wake of tariffs have proven misplaced.
In fact, U.S. equities now make up 32% of foreigners’ allocations — more than at any time since 1968. “Global investors are plowing into American stocks, largely to ride the AI wave,” the Financial Times observed.
It’s not so much confidence as it is a herd trampling into the only green pasture.
With the top ten stocks commanding over 41% of the S&P 500, the index is leaning like an overloaded cart. History shows that the last time concentration climbed this high, the late 1920s, the timbers eventually cracked.
Trump’s New Mercantilism
President Trump unveiled another volley as part of his grand realignment: a 100% tariff on patented drugs unless the companies are building plants in the U.S.
Kitchen cabinets and vanities? 50%. Upholstered furniture? 30%. Heavy trucks? 25%.
“Any branded or patented Pharmaceutical Product, unless a Company IS BUILDING its Pharmaceutical Manufacturing Plant in America,” Trump wrote on Truth Social, will face the tax.
This is mercantilism revived — export more, import less, hoard gold. Adam Smith wrote The Wealth of Nations in 1776 to refute just this, arguing that free trade, not tariffs, enriched the common man.
Yet here we are, three centuries later, back to the old tune.
George Magnus at Oxford warns: “It looks like a crushing victory for America First. But it ignores one critical factor. China has been playing mercantilism for decades — and is a step ahead of the U.S.”
Shutdown as a Weapon
The White House told agencies to prepare for permanent cuts if the government shutters next week.
Not furloughs with back pay — mass firings.
Agencies were asked to weigh whether their roles are “consistent with the President’s priorities.”
For Trump, this isn’t just brinksmanship. It’s a chance to do what the long-forgotten Department of Government Efficiency failed to: strip Washington down to what’s “essential.”
For investors, the risk isn’t ideology — it’s disruption. Shutdowns rattle consumer spending, delay IPOs, and freeze economic data. In market terms, it’s like flying blind. And it’s all part of the chaos that we see as a necessary part of President Trump’s Great Reset.
Comey Indicted
Ex-FBI director James Comey was indicted for lying to Congress in 2020. His lawyer, Patrick Fitzgerald, said he’ll fight the charges. Trump allies called it justice; critics, a vendetta.
The indictment reads like a pulp fiction spy thriller: the fallen G-man, the loyal prosecutor, the knives out. For investors, though, it’s background noise. Washington’s score-settling may shape headlines, but it doesn’t balance portfolios.
It will be entertaining. The Comey indictment is likely the first in a “what comes around, goes around” era of justice for Pam Bondi and her band of merry prosecutors.
ArcaneDoor Breach
Hackers known as ArcaneDoor slipped past Cisco firewalls into federal networks, forcing CISA to issue an emergency directive. The Washington Post reported the campaign has been live since 2024.
Ask anyone who’s worked in logistics: a rat in the flour is hard to spot until the bag splits open. By then, it’s already spoiled the shipment.
Pride and Prejudice of Neo-Mercantilism
The literary world is celebrating the 250th anniversary of Jane Austen’s birth. Beyond the pride and prejudice of policymakers lies a harder truth: mercantilism has returned as the organizing principle of global trade.
George Magnus of Oxford University explains that the U.S. is arriving late to a game China has played for decades.
After joining the WTO in 2001, Beijing built an empire of subsidies, cheap credit, and industrial policy. That path carried it from low-cost exports to a record $1.2 trillion trade surplus.
When U.S. tariffs blocked its entry, China didn’t blink. It simply dumped excess supply elsewhere — what economists call “exporting involution,” selling goods at uneconomic margins just to dominate the field.
It’s not a secret that Trump’s mercantilism looks backward. Making America great again is inherently nostalgic, fomenting into dreams of resurrected domestic factories, punishing imports, and using the American consumer as so many poker chips in some post-industrial game of five-card stud.
China’s mercantilism since Deng Xiaoping told his subjects that “getting rich is glorious” in 1978 has been looking forward: capturing tomorrow’s industries — AI, quantum computing, green tech — before anyone else can.
Adam Smith warned that mercantilism’s obsession with trade surpluses was “incompatible with the accumulation of wealth for citizens.”
Today, that warning rings fresh. Investors are no longer betting on markets alone, but on their marriage to state power. Lithium in Nevada, chips in Minnesota, sovereign gold in Shanghai — these are the dowries of the new era.
Austen might have smiled at the theater of it all, but she would have recognized the deeper plot: pride, prejudice, and the peril of marrying too hastily. In markets, as in marriage, the partner you choose — mercantilist or liberal, backward or forward — defines your household for decades to come.
~Addison
P.S. Amid the theater of the absurd, there’s a strong case today to shy away from the rush to all assets digital and AI, and turn instead towards hard assets like commodities, from gold to uranium – where Grey Swan Trading Fraternity members locked in 150% gains this week. If you’re interested in leveraging macro events into larger profits using options, reach out to our customer service team, we may have a few spots open in the Trading Fraternity.
Yesterday’s Grey Swan Live! highlighted numerous opportunities in the space, following a lively conversation between Grey Swan Contributor Shad Marquitz and Portfolio Director Andrew Packer. Paid-up Fraternity members can catch a replay on the site.
If you have any questions for us about the market, send them our way now to: Feedback@GreySwanFraternity.
