To The Moon

Performance of Global Equity Indices(in US Dollar)

• Last week, Federal Reserve Chair Jerome Powell maintained a hawkish tone, not only reaffirming the Fed’s stance of being in no rush to cut rates, but also explicitly stating that the Fed would not intervene to support the stock market amid volatility. This firmly dashed market hopes for a "Fed Put", triggering a sharp sell-off in equities on the same day. The following day, Trump publicly lashed out, stating that he intended to fire Powell—once again raising questions about the independence of the Federal Reserve. Markets fell further in response to the escalating tension.

• Historically, when the Fed’s independence comes under serious threat, the outcomes have rarely been positive. A similar situation occurred between 1970 and 1974, when President Nixon, in an effort to boost the economy, pressured then-Fed Chair Arthur Burns to cut rates while also interfering with Fed personnel decisions. Burns eventually gave in, keeping interest rates too low for too long, which was a major contributor to the stagflation of the 1970s.

• This Week’s Focus:

1. Progress in U.S.-China tariff negotiations

2. Earnings reports from key tech companies, including Tesla, Google, and Intel.

Tiger Rotor Alpha Strategy

• Tiger Rotor Alpha Strategy is a multi-strategy, cross-cycle, absolute return investment strategy. This strategy seeks to capture long-term excess returns by identifying expectation errors in the market and leveraging cyclical resonance. As of April 15

  , 2025, the portfolio’s major asset allocation breakdown is as follows:

Key Market Themes

Trump Threatens Powell — In a Weak Dollar World, Where Are the Opportunities?

• Last Wednesday, U.S. March retail sales data was released, showing a month-over-month increase of 1.4%—not only beating expectations but also marking the strongest monthly gain in nearly 30 months. Yet, markets didn’t celebrate this “good news.”

• On one hand, robust consumer data further reduced the urgency for Fed rate cuts. On the other, many market participants viewed the spike as a sign of consumer panic, with Americans rushing to front-load spending ahead of the incoming tariff hikes. Breaking down the data, nearly 70% of the growth came from a single category: automobiles. This kind of fear-driven consumption is clearly unsustainable, and under tariff pressure, U.S. consumers are likely to become more cautious toward discretionary spending in the months ahead. A recent MarketPoll survey also revealed that 35% of investors expect consumer discretionary stocks to underperform the broader market this year—the most bearish outlook among the 11 sectors.

• On the same day, Fed Chair Jerome Powell poured cold water on markets again. Despite recent dovish signals from other Fed officials, Powell remained resolute, reaffirming that the Fed is “not in a hurry to cut rates.” More strikingly, he emphasized that the Fed would prioritize controlling inflation, especially in light of tariff-induced price pressures, and that there is no need to intervene in stock market volatility. In plain terms: the Fed is not coming to the market’s rescue. This hawkish stance shattered hopes for a Fed Put, triggering another leg down for U.S. equities.

• In the days that followed, Trump repeatedly took to the airwaves, threatening to remove Powell from office. From a rational standpoint, however, this move would be costly and ineffective. Not only would it require a lengthy legal process, but Powell’s term is set to end early next year anyway. More importantly, undermining the Fed’s independence would severely damage the credibility of all U.S. assets.

  In light of this, we’ve looked back at nearly a century of history—the cases of Lyndon Johnson, Richard Nixon, and Ronald Reagan are all vivid reminders. In each instance, political interference in the Federal Reserve’s independence ultimately led to greater economic problems.

• On the other hand, U.S. earnings season is now underway. Last week, TSMC and Netflix were among the first big tech companies to report their results—and both delivered revenue, earnings, and forward guidance that far exceeded market expectations. Under normal circumstances—say, in last year’s market environment—such results would have triggered strong rallies. But this time, stocks gapped up and sold off intraday, with gains fading before the close. This reflects the current extremely pessimistic sentiment: even solid fundamentals are not enough to offset the market's deep concern over tariffs.

   

• According to Bank of America's Global Fund Manager Survey, sentiment indicators are now at their fifth-lowest level in history. The previous four troughs were: March 2001, October 2008, June 2019, and October 2022—all during major crisis periods. In two cases, markets continued to decline, while in the other two, a major rebound followed. On tariffs, we continue to believe that early April marked the peak of the shock. We expect negotiations between the U.S. and Japan, India, and eventually China to unfold over time. However, investors should not expect swift resolutions—prolonged bargaining and repeated pressure tactics are the baseline scenario. Looking ahead, upcoming policy focus may shift toward tax cuts and deregulation, with related proposals likely emerging throughout Q2.

• That said, we have never questioned Trump’s resolve to bring manufacturing back to the U.S.—this is the cornerstone of his political platform. Related policies like debt reduction, trade balance correction, and a weak dollar are inevitable extensions of that goal. In recent weeks, the U.S. has experienced frequent episodes of simultaneous declines in stocks, bonds, and the dollar—the so-called “triple whammy.” The root cause lies in shaken investor confidence in dollar-denominated assets, due to the tariff shock and the Fed’s hawkish tone. Looking forward, as long as the ultimate goal of reshoring U.S. manufacturing remains intact, the weak dollar trend is likely to persist. Under such conditions, non-U.S. markets—especially Greater China assets trading at historically low valuations—stand out as compelling investment opportunities.