To The Moon

I. Performance and Valuation of Global Equity Indices

Source: Bloomberg, Tiger Asset Management

II. Key Market Themes

i. Trump Threatens Powell from Afar: Where Are the Opportunities in a Weak Dollar?

• Last Wednesday, the U.S. March retail sales data came in, showing a 1.4% month-on-month increase. While slightly exceeding market expectations, it marked the largest monthly rise in nearly 30 months. However, the market did not view this as entirely positive。

• On one hand, the robust data further reduced the urgency for the Federal Reserve to cut interest rates. On the other hand, the market widely interpreted the surge as panic buying driven by American households’ fear of impending tariffs. Breaking down the components, the automotive sector alone contributed nearly 70% of the growth—a trend driven by consumers rushing to purchase vehicles ahead of Trump’s planned 25% global auto tariffs. Analysts warn that such panic-driven consumption is unsustainable. MarketPoll’s recent survey found that 35% of investors believe non-essential consumer goods will underperform the broader market this year, making it the most pessimistic sector among 11 categories.

Source: Marketpoll , Tiger Asset Management

• On the same day, Federal Reserve Chairman Jerome Powell once again dashed market hopes with a hawkish stance. While other Fed officials had signaled varying degrees of dovishness, Powell reiterated his firm position of 'not rushing to cut rates.' He further clarified that the Fed would now prioritize inflation control to ensure tariff-induced price surges remain temporary, explicitly stating there would be no intervention in the stock market's sharp declines. In essence, the Fed has no intention of rescuing the market. This hawkish rhetoric shattered investors' hopes for a 'Fed Put' safety net, sending equities further south.

• In the following days, Trump repeatedly threatened to remove Powell from his post. A rational analysis suggests this would be a self-defeating move. First, the legal process to remove a Fed chair is lengthy, while Powell's term expires in early 2026. More critically, questioning the Fed's independence could trigger a crisis of confidence across U.S. assets. Historical precedents from the past century—including Lyndon B. Johnson's pressure on William McChesney Martin in 1965, Richard Nixon's interference with Arthur Burns in 1971, and Ronald Reagan's clashes with Paul Volcker in 1982—all demonstrate that politicizing monetary policy ultimately exacerbates economic instability.

Source: Bloomberg, Tiger Asset Management

• On the other hand, as the U.S. earnings season commences, tech giants like TSMC and Netflix recently reported quarterly results with revenue, profits, and forward guidance all significantly exceeding market expectations. Under normal circumstances last year, such outcomes would have triggered sharp rallies. However, this time, their stock prices opened higher but closed lower, with gains failing to sustain even a single trading day. This reflects the current market's extreme pessimism, where fundamentally sound earnings are insufficient to offset deep-seated concerns over tariffs.

• According to BofA's Global Fund Manager Survey data, the current sentiment indicator has reached its fifth-lowest level in history. The previous four troughs occurred in March 2001, October 2008, June 2019, and October 2022—all crisis events, with markets either continuing to decline or staging reversals afterward. On tariff policies, we maintain that early April marked the worst phase. Subsequent negotiations between the U.S. and Japan, India, or even China are anticipated, but rapid outcomes are unlikely; prolonged bargaining and repeated pressure will likely persist as the baseline scenario. For the next policy phase, focus may shift to tax cuts and regulatory easing, with major announcements expected in Q2.

• However, we never doubt Trump's resolve to promote manufacturing reshoring—it is the cornerstone of his political agenda. Correspondingly, debt restructuring, addressing trade deficits, and pursuing a weaker dollar are inevitable outcomes. The recent wave of 'stock-bond-foreign exchange triple sell-offs' in the U.S. stems from tariff policies and Fed policy shocks, which have shaken confidence in dollar-denominated assets. In the long term, as long as reshoring remains the ultimate goal, the weak dollar trend will persist. Under these conditions, non-U.S. markets, particularly undervalued Greater China assets, present significant investment opportunities.

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