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Hong Kong’s oldest and largest pro-democracy political party is moving to disband as Beijing’s sweeping crackdown on the city leaves even moderate opposition groups with no room to operate.

“The message was that the party has to be disbanded or there will be consequences,” said one of them, Yeung Sum, a former Democratic Party chairman.

Fred Li, a former lawmaker, said a Chinese official told him that the party should not remain until the end of this year, when an election will be held.

Founded by liberal lawyers and academics three years before the former British colony’s 1997 handover to China, the Democratic Party had campaigned for universal suffrage and on matters from labor rights to conservation during a period when such issues were openly discussed in the city.

Widely seen as moderates willing to work with Beijing, Democratic Party leaders had spearheaded a significant voting bloc in the city’s legislature and were regularly afforded space to critique local government policy, until mass pro-democracy protests in 2019 ushered in a new and more restrictive political era.

Beijing’s crackdown in the years since, including the prosecution and jailing of pro-democracy leaders, has left the once-influential party rudderless as it contends with sweeping national security legislation and “patriots only” electoral reforms enacted in 2021 that make it nearly impossible for opposition candidates to stand for the city’s legislature.

Democratic Party chairman Lo Kin-hei told a news conference last Sunday that 90% of about 110 party members had voted to delegate power to a committee to start the dissolution process, adding he hoped a final vote would take place in the coming months.

“I hope Hong Kong’s political parties… will continue to work for the people,” Lo said. “We have always hoped to serve the Hong Kong people, and to do things that are good for society.”

The Democrats’ move to disband demonstrates Beijing’s unwillingness to allow even the mildest of dissenting voices to be heard in Hong Kong, say analysts.

John Burns, emeritus professor at the University of Hong Kong (HKU), said the party had “symbolized the promise of some kind of democratic development in Hong Kong, leading to universal suffrage as promised in the Basic Law,” referring to the city’s mini-constitution.

“A dissolution of the party reflects official Hong Kong’s turn away from popular participation, locally accountable government, and increased transparency toward more authoritarian rule,” Burns said.

Eric Lai, a research fellow at the Georgetown Center for Asian Law, said the Democrats’ move “shows there are no more feasible ways for groups to exist as an opposition party.”

“It’s self-conflicting for the government to suggest that nothing has changed,” he said.

Criticism of the government remains permitted in Hong Kong, “however strong, vigorous or critical” it may be, so long as it is “based on facts,” the spokesperson said. The Hong Kong government would “continue to resolutely discharge the duty of safeguarding national security,” they added.

No space for compromise

The Democrats had enjoyed relative political freedom following Hong Kong’s return to Chinese rule, even holding more seats than any other party in the mostly pro-Beijing legislature until 2004.

The party’s leaders were often the figureheads of major demonstrations, including an annual June 4 vigil to commemorate the Tiananmen Square massacre and a well-attended pro-democracy march held every July. (Neither event would be permitted on the Chinese mainland, and both are now effectively banned in Hong Kong).

But support for the Democrats plunged in 2010 after its leaders negotiated directly for universal suffrage with officials from Beijing’s liaison office in Hong Kong – a move seen as a betrayal by other pro-democracy groups.

The party was then pushed further to the sidelines by the emergence of a new generation of pro-democracy leaders and student activists during months-long protests for universal suffrage in 2014.

However, when anti-government demonstrators returned to Hong Kong’s streets en masse in 2019, the Democrats’ popularity resurged as many of its leaders stood on the front lines of the massive – and sometimes violent – protests that rocked the financial hub.

Later that year, the Democratic Party was the biggest winner in local district council elections. But its participation in the protests also drew the ire of Hong Kong authorities and Beijing, paving the way for its demise.

“The party made mistakes when it failed to draw a clear line between itself and radical separatists calling for Hong Kong’s independence from 2014-2020,” said Burns, from HKU. “Authorities have punished the party, jailing and chasing out Democratic Party leaders.”

Over the past five years, the space for the Democrats to maneuver has been increasingly squeezed by Chinese authorities.

In 2020, Beijing imposed a sweeping national security law on Hong Kong, introducing the maximum sentence of life imprisonment for four main crimes of secession, subversion, terrorism and collusion with foreign forces.

A year later, the Chinese government rewrote Hong Kong’s electoral rules to require candidates to seek nomination from pro-Beijing groups, essentially excluding the opposition from elections. A legislature filled with Beijing loyalists last year unanimously passed a law expanding the scope of national security offenses.

Beijing and the Hong Kong government argued that the electoral changes had enhanced democracy and have repeatedly defended the security laws as restoring order and returning prosperity to the city. But critics say they have curtailed freedoms and had a “chilling effect” on civil society, including independent institutions and the media.

Steve Tsang, director of the China Institute at SOAS University of London, said political and social protests seen as challenging state security are “becoming increasingly if not well-nigh impossible.”

“Many other elements of civil rights, including that of speech and organizing political parties have also been severely curtailed,” he added.

Last year, five former Democratic Party lawmakers were among 45 opposition figures sentenced to prison terms of up to 10 years after they were found guilty of subversion for taking part in an election primary in 2020.

National security police have also placed HK$1 million ($129,000) bounties on pro-democracy activists who fled overseas, including an Australia-based former Democratic Party lawmaker accused of secession, subversion and collusion with a foreign country.

Meanwhile, the trial of media tycoon and outspoken democracy supporter Jimmy Lai is ongoing, more than four years after he was detained on charges of colluding with foreign forces, which he denies.

The Democratic Party’s announcement last weekend follows the dissolution of almost 100 civil and pro-democracy organizations in Hong Kong in the wake of Beijing’s crackdown.

The party had tried to survive as a civic group in recent years but struggled to raise funds as multiple private venues canceled their events, often at the last minute.

Former Democratic Party lawmaker Emily Lau said the party’s move to disband was “very sad.”

“I don’t know what they are thinking in Beijing. We have demonstrated, not just words, but by action, that we are reasonable. We are willing to talk, to negotiate, to compromise, reach a deal and go forward.”

This post appeared first on cnn.com

Canada is heading into federal elections, where Prime Minister Mark Carney is vying for a chance to continue leading the country, as tensions grow with its closest neighbor.

The former central banker’s main competition is Pierre Poilievre, Canada’s Conservative party leader whose political capital has declined as US-Canada relations nosedive amid threats from US President Donald Trump.

Canadians do not vote directly for prime minister – they vote for lawmakers representing political parties in their district or riding. The party with the largest number of lawmakers elected to parliament will form the government, and its leader will become prime minister.

While Carney’s Liberal Party and Poilievre’s Conservative Party are the frontrunners, other major political parties will also be on the ballot, including left-leaning New Democratic Party (NDP) led by Jagmeet Singh, the Green Party and the exclusively-Quebec-based Bloc Québécois.

Trade war and house prices

Poilievre was the favorite to win when former prime minister Justin Trudeau stepped down last month. But Trump’s steep tariffs on Canada, and threats to its sovereignty, dramatically transformed the race.

Trump’s decision to levy a 25% duty on Canadian steel and aluminum, cars and car parts, and threats to tariff pharmaceuticals and lumber have shaken Canadian businesses. It’s a reality Carney has not sugarcoated, warning of “tough days ahead” with pressure on Canadian employment.

“These tariffs are fundamentally damaging to the American economy and by extension to the global economy,” Carney told a press conference this month after Trump announced sweeping tariffs, which partially spared Canada but sent global markets into chaos.

Canadians are also grappling with the high cost of living, especially an affordable housing crisis – an issue likely to feel the sting of a trade war with the US.

The Ontario Home Builders’ Association warned last month that tariffs and counter-tariffs on steel and aluminum products would likely drive up the costs of construction materials, making building and buying new homes more expensive, worsening the housing affordability issue.

US and Canadian tariffs on automobiles, for example, will make cars more expensive on both sides of the border, says economist Randall Morck, a professor at the University of Alberta’s business school.

“Stock prices have gone down, so everybody is poorer,” he said, adding that this likely reflects investors’ estimates that recession and higher unemployment could be on the horizon.

Finance man versus the career politician

Carney, a political newcomer, has not ruled out continued talks with Trump, but he has been moving to deepen ties with more “reliable” allies. In an unusual move, his first prime ministerial trip abroad was to Europe where he spoke to French and British officials about deepening security, military and economic ties.

While a rookie politician, unlike his challenger, Carney’s decades in finance saw him steering governments through major global crises and periods of upheaval. As governor of the Bank of England, he helped the United Kingdom navigate Brexit – which he said mirrors what can happen to the US in the face of tariffs.

“I have seen this movie before. I know exactly what’s going to happen to them, the Americans are going to get weaker,” he said at a campaign event in Ontario this month.

Many Canadians see Carney as someone well-placed to navigate a trade war with a long-standing ally, experts say.

“In a crisis it’s important to come together and it’s essential to act with purpose and with force. And that’s what we will do,” Carney said earlier this month as he positioned himself as the person to take on the US president.

Tensions with the US have slowed the ascent of Poilievre, a career politician who served as a cabinet member in former Prime Minister Stephen Harper’s Conservative government. Throughout his campaign he has aimed to appeal to working-class Canadians, painting himself as someone outside the “Ottawa elite” and casting himself as a family man.

Poilievre’s fiery rhetoric about slashing tax and bureaucracy, and his populist “Canada First” policy have won him supporters tired of Liberal rule. But Poilievre now appears to be distancing himself fro comparisons to US President Donald Trump; he has slammed Trump’s threats to make Canada the 51st US state, supported reciprocal tariffs and repeatedly declared he is “not MAGA.”

His decades of political experience and modest background – as the son of two schoolteachers – also set him apart from Trump, says Charles-Etienne Beaudry, political science professor at the University of Ottawa and author of “Radio Trump: How he won the first time.”

Experts say Carney’s lead over Poilievre has widened primarily because the ex-banker has been more vocal than his opponent about how exactly Canada will forge trade ties with other countries and organize retaliatory tariffs.

“I expect that [voters] are going to vote for the candidate that they think will minimize the cost of the trade war with the US,” says Morck, the economist, pointing to the level of anti-American sentiment and distrust among Canadians. “I haven’t seen anything like it since the Vietnam war.”

This post appeared first on cnn.com

Capital One Financial’s application to acquire Discover Financial Services in a $35.3 billion all-stock deal has officially been approved by the Federal Reserve and the Office of the Comptroller of the Currency, the regulators announced on Friday.

“The Board evaluated the application under the statutory factors it is required to consider, including the financial and managerial resources of the companies, the convenience and needs of the communities to be served by the combined organization, and the competitive and financial stability impacts of the proposal,” the Fed said in a release.

Capital One first announced it had entered into a definitive agreement to acquire Discover in February 2024. It will also indirectly acquire Discover Bank through the transaction, which was approved by the Office of the Comptroller of the Currency on Friday.

Under the agreement, Discover shareholders will receive 1.0192 Capital One shares for each Discover share or about a 26% premium from Discover’s closing price of $110.49 at the time, Capital One said in a release.

Capital One and Discover are among the largest credit card issuers in the U.S., and the merger will expand Capital One’s deposit base and its credit card offerings. 

As a condition of the merger, Capital One said it will comply with the Fed’s action against Discover, according to the release. The Fed fined Discover $100 million for overcharging certain interchange fees from 2007 through 2023, and the company is repaying those fees to affected customers.

The OCC said it approved Capital One’s application on the condition that it would take “corrective actions” to remediate harm and address the “root causes” of outstanding enforcement actions against Discover.

After the deal closes, Capital One shareholders will hold 60% of the combined company, while Discover shareholders own 40%, according to the February 2024 release.

In a joint statement, Capital One and Discover said they expect to close the deal on May 18.

This post appeared first on NBC NEWS

Technically, it’s rather clear that we remain in a downtrend. However, not all downtrends are created equal. Some are built to last, while others can turn around quickly. Recognizing the difference is obviously quite important. What most traders/investors cannot grasp is that secular (long-term) bull markets often see corrections or cyclical (short-term) bear markets. Both of these are much, much different than a secular bear market and present tremendous opportunity. Many market participants believe every downturn is the start of a lengthy secular bear market and that’s a problem. Always believing the worst-case scenario makes it incredibly difficult to benefit from cheaper prices by entering stocks during downtrends. By waiting and watching the market move higher again, market participants will be forced to buy back in much higher due to FOMO, or the fear of missing out.

Trading out and then back in purely based on emotion – panicking out and then getting back in due to the fear of missing out – is the exact way to ruin any hope of financial success in the stock market. The first question I’d ask everyone is….do you believe that the big Wall Street firms get out of the stock market (or rotate to safer stocks) before you and me? Then, do you believe they get back into aggressive areas of the market before you and me? If you answered yes to both questions, we have something in common. If you believe that stock market performance is random, then we can’t be friends. (just kidding)

I have a way of proving my theory that Wall Street manipulates all of us and I’ll get to that in a bit. First, though, from a purely technical perspective, there is one major industry group that I look to for relative performance during uptrends and downtrends, an aggressive area that helps to provide us clues about the possible future direction of the overall stock market. When these groups are leading on a relative basis, it’s difficult to keep the S&P 500 down. But when they’re lagging, it opens the door to potential market tops and not-so-great action ahead.

This group shouldn’t be a big surprise.

Semiconductors ($DJUSSC)

Semiconductors are used in so many things that we buy nowadays, so it makes perfect sense that the performance of this industry group not only can determine which way the S&P 500 is going to go, but it also provides us a sense of what Wall Street believes about our economy. As the economy improves (or is expected to improve), this group typically explodes in anticipation of that demand. The following 10-year weekly chart of the S&P 500 and the relative strength of semiconductors ($DJUSSC:$SPX) illustrates perfectly my point:

Since early 2016, the S&P 500 has seen its weekly PPO move below zero four times. Just before or at the time of those bearish crossovers, the DJUSSC rolled over on a relative basis vs. the S&P 500. Wall Street was selling ahead of the crowd, getting out before telling you and me to get out. You can also see in that bottom panel that it resulted in inverse, or negative, correlation. Over the past 10 years, inverse correlation hasn’t happened often. Typically, a strong semiconductor group is accompanied by a strong market, and vice versa.

On the price chart, the blue directional lines on the DJUSSC:$SPX relative price chart mostly accompanies the S&P 500 moving higher (blue-shaded area). Likewise, the red directional lines on the DJUSSC:$SPX relative price chart mostly accompanies the S&P 500 moving lower. But it’s when the DJUSSC and $SPX do NOT move in the same direction that we should take notice.

I believe we’re in a bottoming phase in the stock market. I could certainly be wrong, but I think my track record calling market bottoms is fairly solid. If I’m correct this time, then we should see the DJUSSC start to turn higher on a relative basis on a daily chart. That hasn’t happened yet. Take a look:

On this daily chart, we continue to see very positive correlation, confirming that the DJUSSC and the SPX both tend to move in the same direction. So it stands to reason that if the S&P 500 can clear key price resistance at 5521 and the DJUSSC:SPX relative strength line breaks above its current downtrend resistance, then I’d say the bottom is confirmed. I’d keep an eye on this chart moving forward.

Noise or Reality?

Any time we’re setting new highs or new lows, this is my primary question. Bottoms always form when the market “noise” or “news” is terribly bad. Moving off of lows happens when Wall Street looks 6 to 9 months down the road and sees brighter skies. We can’t feel it, but Wall Street sees it. It’s like we’re brainwashed into believing that today’s bad or uncertain news will carry the stock market lower and lower, when in reality, we’re simply being manipulated as a market bottom approaches.

I want you to join me on Saturday morning, April 19th, at 10am ET for a very important session, “Bear Market 2025: Separate Noise from Reality.” I will discuss several key factors that you need to be aware of RIGHT NOW. You may have already made up your mind as to where the S&P 500 is heading….and that’s totally fine! But making very important financial decisions without considering ALL market angles would be a huge mistake, in my view.

To gain access to our FREE event Saturday, CLICK HERE for more information and to register. Seats are limited, so please register now to avoid being shut out. Also, if you’re reading this AFTER our event, you should still register, because we will be happy to send you a recording of the event to check it out at your leisure.

Happy trading!

Tom

Stocks vs. bonds? In this video, Julius breaks down the asset allocation outlook and why defensive sectors, large-cap value, and bonds may continue to outperform in this volatile market. He starts at the asset allocation level using Relative Rotation Graphs (RRGs) to analyze stocks vs bonds performance, then highlights the ongoing defensive sector rotation, and identifies strength in large-cap value stocks.

To close out the show, Julius dives into stock-specific opportunities based on the relative rotation of sector constituents, pointing to potential leadership shifts as market volatility rises.

This video was originally published on April 17, 2025. Click on the icon above to view on our dedicated page for Julius.

Past videos from Julius can be found here.

#StayAlert, -Julius

In this video, Grayson unveils StockCharts’ new Market Summary ChartPack—an incredibly valuable new ChartPack packed full of pre-built charts covering breadth, sentiment, volatility data and MUCH MORE!

From there, Grayson then breaks down what he’s seeing on the current Market Summary dashboard, illustrating how he’s putting this invaluable tool to work in the current climate. He highlights weakness in Small Cap stocks, uses the Factors Map to pinpoint the groups that investors are gravitating to, and explains why the sea of red across the breadth maps continues to be a clear indication of the weakness in this market.

This video originally premiered on April 18, 2024. Click on the above image to watch on our dedicated Grayson Roze page on StockCharts TV.

You can view previously recorded videos from Grayson at this link.

It was another erratic week in the stock market. There were several market-moving events sprinkled throughout this short trading week, including earnings, escalation of tariff wars, and Chairman Jerome Powell’s remarks at the Economic Club of Chicago. This extended to wild swings in the bond market as well.

We had several positive earnings from banks and Netflix, Inc. (NFLX). Others, such as UnitedHealth Group, Inc. (UNH), disappointed, sending the Dow Jones Industrial Average ($INDU) lower by 1.33%.

Chairman Powell stated that tariffs could increase inflation. This would cause economic growth to slow down and unemployment to increase. The hope is that inflation is transitory, and, after it becomes stable, the Fed can continue to focus on its dual mandate of maximum employment and price stability.

It’s an insecure time for investors, and many feel the pain. You’re probably wondering how long this pain will go on for. In an uncertain environment, the best you can do is turn to the bond market.

It’s All About Bonds

The recent wild swinging market activity can be encapsulated in the price action of Treasury yields. Since 2024, yields have been swinging up and down. In the past year, the 10-year Treasury yield has ranged from 3.60% to 4.81%, and when the range is this wide, it’s an indication of economic instability. Not to mention, economic instability could result in a weaker economy.

The daily chart of the 10-Year US Treasury Yield Index ($TNX) gives you an idea of the range of yields in the last year. More recently, the yield has risen from 3.89% to 4.59%, and has now pulled back to its 50-day simple moving average (SMA).

FIGURE 1. DAILY CHART OF 10-YEAR TREASURY YIELDS. Yields have been seeing some large up and down swings.Chart source: StockCharts.com. For educational purposes.

Generally, when stock prices fall, bond prices rise. Since bond yields move inversely to bond prices, you’d expect yields to fall. This scenario isn’t playing out. Instead, we’re seeing yields move erratically while bond prices remain suppressed. There needs to be stability in bond yields before a stock market recovery, and one way to do that is to monitor the chart of the Merrill Lynch Option Volatility Estimate, referred to as the MOVE Index ($MOVE).

The MOVE Index tracks bond volatility. Think of it as the bond counterpart to the Cboe Volatility Index ($VIX). The chart below displays the $MOVE/$VIX relationship, with the correlation between the two in the lower panel.

FIGURE 2. THE MOVE INDEX VS. VIX. A high correlation between the MOVE Index and VIX suggests interest rates and stock prices are tightly connected. A lower correlation would indicate stability in equities.Chart source: StockCharts.com. For educational purposes.

The two have been highly correlated since the end of March, which indicates that stocks and interest rates are tightly connected. This means the wild up and down swings in equities could continue. When the two are less correlated, we can expect equities to start settling down. Looking at the above chart, a correlation of 0.80 would be sufficient for signs of stability.

Both $VIX and $MOVE have come back slightly, but their correlation is at 0.93, which is relatively high.

Be sure to save both charts displayed in this article to your ChartLists. They could alert you to stability in the stock market ahead of other indicators.

The Bottom Line

Until stability returns, you could do the following:

  • Stay on the sidelines and keep some dry powder.
  • Invest in risk-off instruments such as gold and silver.
  • Park some of your money in defensive sectors.

Equities could slide lower before stability returns. If this happens, you could pick up some growth stocks for a bargain.

An empowered investor comes out ahead after market instability. So monitor the market closely and, when the time is right, make wise investment decisions.

End-of-Week Wrap-Up

  • S&P 500 down 1.50% on the week, at 5282.70, Dow Jones Industrial Average down 2.66% on the week at 39,142.23; Nasdaq Composite down 2.62% on the week at 16,286.45.
  • $VIX down 21.06% on the week, closing at 29.65.
  • Best performing sector for the week: Energy
  • Worst performing sector for the week: Consumer Discretionary
  • Top 5 Large Cap SCTR stocks: Palantir Technologies, Inc. (PLTR); Elbit Systems, Ltd. (ESLT); Anglogold Ashanti Ltd. (AU); Just Eat Takeaway.com (JTKWY); Kinross Gold Corp. (KGC)

On the Radar Next Week

  • Earnings season continues with Haliburton (HAL), Tesla (TSLA), Boeing Co. (BA), International Business Machines (IBM) and others reporting.
  • 30-Year Mortgage Rates
  • March New Home Sales and Building Permits
  • April S&P PMI
  • April Consumer Sentiment
  • Fed speeches from Jefferson, Harker, Kashkari, and others.

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your personal and financial situation, or without consulting a financial professional.

Reflecting on the price action over this shortened holiday week, I’m struck by how the leadership trends have not really changed too much. We’ve observed bombed-out market breadth indicators, and the S&P 500 remains clearly below its 200-day moving average despite a strong upside swing off the early April market low.

But how much as the leadership of this market changed over the last couple weeks? I would argue that conditions remain fairly consistent over that period, and are still not overwhelmingly bullish.

Defensive Sectors Still Outperforming Offense

Here’s one of my favorite charts for analyzing offense vs. defense, a chart that holds a place of honor on my Market Misbehavior LIVE ChartList. We’re comparing the Consumer Discretionary and Consumer Staples using both cap-weighted and equal-weighted ETFs.

When the ratios are going higher, investors are favoring “things you want” over “things you need”, which implies optimism for economic growth. When the ratios slope lower, that suggests more defensive positioning as investors are skeptical of growth prospects.

We can see that the cap-weighted version of this ratio made a peak in January, while the equal-weighted version made its own top in February. Both ratios have been in a fairly consistent downtrend of lower highs and lower lows, even through last week’s sudden spike on tariff policy changes.

How bullish do I want to be when these ratios are sloping lower? Generally speaking, I’ve found that until investors start believing in the upside potential of Consumer Discretionary over the relative defense of Consumer Staples, it’s best to remain on the sidelines.

Using the RRG to Visualize Offense vs. Defense

While I often refer to relative strength ratios of sector ETFs vs. the S&P 500 index, I also enjoy leveraging the power of Relative Rotation Graphs (RRG®) to monitor a series of relative strength ratios in one simple but powerful visualization.

Here, I’m showing the 11 S&P 500 economic sectors relative to the S&P 500, and I’m highlighting Consumer Discretionary and Consumer Staples to monitor their relative positions. If you click “Animate” for this visualization, you’ll see that toward the end of 2024, offense was clearly outperforming defense. The XLY was in the Leading quadrant, the XLP was in the Lagging quadrant, and the rotations suggested a classic bull market configuration.

Fast-forward to February and March and you’ll see how Consumer Discretionary rotated into the Weakening and then Lagging quadrant. Meanwhile, Consumer Staples strengthened during that same period. At this point, the RRG is telling me defense over offense, in a classic bearish configuration.

Sticking With Groceries, Guns, and Gold

So, given the bearish leadership configuration in spite of a sudden bounce of the April market low, where can we find potential opportunities? I’ll highlight three ideas that I’ll summarize as “Groceries, Guns, and Gold.”

Playing off the “things you need” theme implied above, grocery retailer Kroger Co. (KR) has managed to pound out a fairly consistent pattern of higher highs and higher lows. With improving momentum and a new 12-month relative high this week, this is a chart continuing in a clear uptrend despite broad market weakness.  By the way, KR was one of the Top Ten Charts for April 2025 I presented with Grayson Roze!

Defense stocks like Northrop Grumman Corp. (NOC) have experienced an upside resurgence given geopolitical instability in 2025. From a technical perspective, I love how charts like NOC have rallied since mid-February, while most stocks, as well as our equity benchmarks, have been trending lower! There’s a significant resistance level to overcome around $550, but a confirmed break higher could open the door to further gains.

Gold has experienced an incredible run so far in 2025, finishing the week up 26% for the year compared to the S&P 500’s 10% loss over the same period. Similar to the chart of NOC, Newmont Corporation (NEM) is addressing a key resistance level from a major high in October 2024. But, so far in 2025, NEM has been scoring higher highs and higher lows, potentially building momentum for a break to a new all-time high.

It can be super tempting to consider the April low as “the bottom” and go all-in on growth stocks and offensive plays. But, given the lack of leadership rotation in April, I’m inclined to stick with charts that remain in strong uptrends during uncertain times.

RR#6,

Dave

P.S. Ready to upgrade your investment process? Check out my free behavioral investing course!


David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC


Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

Maintaining a good relationship between the United States and Europe has long been seen as a no-brainer by leaders on both side of the Atlantic. After all, it’s this friendship that has led to decades of peace, stability and prosperity.

And then came US President Donald Trump.

In his second term, Trump and his closest aides have repeatedly expressed a deep disdain for Europe, centered mainly around their belief that the continent is taking advantage of the US when it comes to security and trade.

They say the US has for decades been subsidizing Europe’s inadequate defense spending, while getting slapped with tariffs and trade barriers in return.

But their dislike seems to be at least partly rooted in ideology.

Majda Ruge, a senior policy fellow at the European Council on Foreign Relations, said that Trump’s foreign policy is an extension of the culture wars that he and his administration are leading against liberalism at home.

“And Europe is considered to be one of the bastions of that liberalism,” she said.

She said Trump’s “Make America Great Again” movement has been largely inspired by people’s disappointment with globalization.

Growing frustration with Europe

Few in the Trump administration have shown as much contempt for Europe as Vice President JD Vance.

Just weeks into his tenure, Vance stunned European leaders by using his speech at the Munich Security Conference to berate them over free speech and migration. He went as far as suggesting that the biggest threat to European security wasn’t Russia or China, but “the threat from within,” which he characterized as “the retreat of Europe from some of its most fundamental values.”

He followed that up a wide-ranging interview with British website UnHerd on April 15 where he shared his and the president’s frustration with European leaders.

“The reality is – it’s blunt to say it, but it’s also true – that Europe’s entire security infrastructure, for my entire life, has been subsidized by the United States of America,” he said.

“It’s not in Europe’s interest, and it’s not in America’s interest, for Europe to be a permanent security vassal of the United States.”

But the extent of his dislike for the continent was laid bare when the editor-in-chief of The Atlantic magazine, Jeffrey Goldberg, was accidentally added to a group chat of Trump’s top officials on the nongovernment messaging app Signal.

Vance suggested calling off a US attack on the Houthi rebels in Yemen, who had been disrupting key international shipping routes for months, because it would help European economies more than it would America’s.

“I just hate bailing Europe out again,” Vance said in the chat.

That remark was in line with Trump’s long-held belief that European countries have been able to underspend on defense because they knew the US would step in and bail them out.

He has threatened to take the US out of NATO and questioned Article 5 of the treaty, the principle of collective defense – a key pillar of the alliance that has only been invoked once in its history, after the September 11, 2001 attacks on the US.

Clash over defense spending

Trump made defense spending a major issue when he first became US commander in chief and 22 out of NATO’s then 27 members were spending less than the agreed upon 2% of their GDP on defense.

Things have changed since then – partly because of Trump’s pressure, but mostly because of Russia’s aggression against Ukraine, which was a major wake-up call for Europe.

In 2024, only eight out of the expanded alliance’s 32 members didn’t meet the target.

And while it is true that the US has invested a lot of money and manpower into Europe’s security, experts say the picture is a lot more nuanced than how Vance and other top Trump lieutenants present it.

“Americans didn’t do this out of the goodness of their hearts,” Ruge said. “Regardless of the administration, the US has rarely done something on the foreign policy front, which hasn’t been to the benefit of or in line with (the) national interests of the United States.”

Sudha David-Wilp, vice president of external relations and senior fellow at the German Marshall Fund of the United States, agreed with that assessment – and warned that pulling away from the time-tested alliance could end up costing the US.

The US was able to rely on the support of its European allies on a number of occasions, even when it didn’t necessarily benefit their own political standing – such as when they refused to condemn the decision by the US to kill Iran’s General Qasem Soleimani in Iraq, or when they supported the US invasion of Afghanistan and contributed troops to the multinational force there as required by NATO’s Article 5, even though majorities of their citizens opposed it.

“Is it perfect? Absolutely not. Does it need reform? Yes. But by tearing it all down, it could make (the world) more dangerous and riskier for the United States,” David-Wilp said.

US push for European independence

Trump and those close to him have long pushed for the US to pull back from its traditional role as the world’s policeman, warning against America’s involvement in foreign conflicts.

The paradox of this, Ruge said, is that Vance and other “restrainers” are aligned with many European countries who have in the past criticized US interventions abroad.

Vance said as much in the interview with UnHerd, when he suggested that if Europe was a “little more willing to stand up” to the US, it “could have saved the entire world from the strategic disaster that was the American-led invasion of Iraq.”

Both Germany and France opposed the 2003 Iraq invasion, a stance which greatly angered the Bush administration. The then-Secretary of State Colin Powell threatened France with “consequences” over its decision to stand up to Washington. An anti-French sentiment took hold across the US — with actions like “French fries” being renamed “freedom fries” in establishments around the country.

“If you think about the Signal chat, where they’re going into the action of bombing of Houthis in Yemen and saying ‘we’re going to give the bill to Europeans,’ well, there’s an amount of hypocrisy, because American action – especially in the Middle East and North Africa – has produced huge amounts of liabilities for Europe,” Ruge said.

Scrutiny over security

The US has a vast network of military bases across Europe, with some 80,000 service members deployed there, down from a 20-year peak of 105,000 at the time of Russia’s full-scale invasion of Ukraine in 2022. The current number is roughly one fifth of what it used to be during the Cold War.

The strategy of stationing American troops closer to conflict zones dates back to World War II and has proven to be beneficial time and time again.

While different administrations have tinkered with the number of troops and locations of bases, the US has always maintained a significant military presence around the world.

“One can certainly make credible arguments that it’s important to move assets to regions like the Indo-Pacific, but it still makes sense to have a presence in Europe, because having a presence in Europe also helps the United States when it comes to out-of-area conflict,” David-Wilp said.

According to research by the Atlantic Council, it would cost the US taxpayer nearly $70 million more per year to rotate military forces in and out of Europe rather than have them based in Germany and Poland.

The huge investments the US has been making into defense in Europe and elsewhere have also directly benefited the American economy.

Because while Trump and others often make it sound like the US is pouring cash into Europe, and Ukraine in particular, what the US is mostly doing is pouring money into American defense contractors.

“In terms of what the alliance has given to the US, besides all the other benefits, just in terms of the economy – the benefit (the) American economy has drawn from this in terms of weapon sales and weapon production is huge,” Ruge said.

Of the more than $175 billion in aid that the US Congress has appropriated to Ukraine since the start of the full-scale invasion, more than $120 billion has been spent directly with US companies or on US Forces, according to conservative think tank the American Enterprise Institute.

And according to the Kiel Institute, which monitors aid to Ukraine, European countries have provided even more aid to Ukraine than the US – first by using their own existing arsenals and then by procuring weaponry from Western defense industries. With four out of the top five global defense contractors being American companies, US industry is getting a sizable chunk of this new business.

European unity benefits the US economy

Trump has made his personal contempt for the European Union clear on multiple occasions in recent months. He even complained to Irish Prime Minister Micheál Martin, incorrectly, that the bloc was making it difficult for him to expand his golf resort in Ireland.

Last month, Trump claimed the EU was “formed to screw the United States” when announcing his “Liberation Day” tariffs.

It was a strange suggestion given that the EU would likely not exist if it wasn’t for the post-war push by the US to help form it. President Harry Truman was a great advocate of European unity and his and subsequent US administrations have supported European integration, seeing a united Europe as a more prosperous trade partner and stable ally.

In Trump’s worldview, the US is being “screwed” by the EU because it is running an overall trade deficit with the bloc. But, just like with defense spending, the issue is more complex than Trump might suggest.

The US and the EU have the largest trading relationship in the world, having traded $1.4 trillion worth of goods and services in 2023, according to the latest available official data. And while the US ran a trade deficit with the EU in goods, it had a surplus in services.

The two sides have been balancing on the edge of a trade war after Trump unveiled 25% tariffs on European steel, aluminum and car exports, and 20% “reciprocal” tariffs on all other goods. The EU said it would retaliate but then put a pause on the planned countermeasures after Trump announced he’d temporarily halt the tariffs.

But while a full-blown trade conflict has been avoided for now, trust between the two sides of the Atlantic has been fractured – perhaps irreparably.

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Turkey started hastily organized mass trials on Friday to prosecute some of the hundreds of people who took part in the widespread demonstrations over the jailing of Istanbul’s mayor Ekrem Imamoglu, the major rival to President Recep Tayyip Erdogan.

Some 189 people, including journalists, students and activists, were on trial across two overflowing court rooms in Istanbul’s Caglayan justice palace, one of the city’s main courts.

Both courts ruled to split the list of defendants to more manageable numbers after hearing procedural motions by defense lawyers.

Charges against the defendants stem from the protests that erupted after Imamoglu’s arrest on March 19 on corruption allegations — a move critics see as an attempt to sideline a key rival to Erdogan ahead of elections expected to be held in 2028.

At least 1,400 people were arrested during the demonstrations, posing one of the biggest challenges yet to the long rule of Erdogan, who is seeking to extend his presidency.

Human Rights Watch (HRW) condemned the trials as politically motivated, citing a lack of evidence and calling the charges incompatible with democratic norms.

A small group of parents and supporters gathered outside the court before the trials to demand justice for students who are among those being prosecuted, holding signs, releasing balloons and chanting “we want justice for our kids.”

“We release these balloons to symbolize their right to freely express themselves, their right to education, and their right to lead free lives,” the group said in a statement.

Eight journalists who were arrested while covering the protests in Istanbul also appeared in court on Friday.

One defense lawyer called for the immediate dismissal of the case and told the court, “The journalists were carrying out their constitutionally protected jobs.”

HRW reviewed the indictments against 650 demonstrators “accused of protest-related offenses,” noting that 120 were charged for assemblies held after an eight-day protest ban expired.

Potential sentences range from six months to five years, yet in some cases the evidence appeared thin. In one case, a rock allegedly held by a protester was cited as a weapon.

Protesters in the capital Ankara were met with police water cannons. In Istanbul, police doused people with pepper spray, and some officers kicked and hit demonstrators after several fireworks and other objects were thrown at riot police near the city’s municipality building, according to Reuters.

Hugh Williamson, HRW’s Europe director, criticized the trials as “a warning against exercising the rights to peaceful protest or free expression,” and urged prosecutors to drop charges without concrete evidence.

Turkey’s record on assembly rights has long drawn scrutiny, with the European Court of Human Rights (ECHR) issuing over 70 rulings against Ankara since 2010 for disproportionate crackdowns, HRW said.

The Council of Europe has called on Turkey to protect “the right to peaceful protest.”

“The presumption of innocence, the use of pre-trial detention strictly as a measure of last resort and the protection of political expression” must all be guaranteed, the Council said.

Despite this, Erdogan’s government has tightened control, with Freedom House, a US-based nonprofit research organization, labeling Turkey “not free” amid censorship and surveillance laws.

As the trials begin, observers have warned of deepening authoritarianism. With 90% of Turkish media under government influence and journalists routinely targeted, the cases underscore a broader erosion of rights under Erdogan, who has ruled since 2003 and could remain in power until 2029.

Elections are not scheduled until 2028 but would need to come earlier if Erdogan, 71, who has run Turkey for 22 years, wants to run again. Imamoglu leads the president in some polls.

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