THE MARKET FLUCTUATES DUE TO SHORT-TERM STORIES BUT IS SHAPED BY LONG-TERM FOUNDATIONS

U.S. bond yields rose today as many sources suggested that this is related to the latest ruling on tariffs by the Trump administration, which may be illegal. If the Supreme Court sides with the appellate court, these taxes may have to be refunded, leading to a larger budget deficit, higher public debt, and increased bond yields, which means the government's borrowing costs will become increasingly burdensome.

However, all of this is still just speculation. The market is waiting for the final decision from the Supreme Court. Bond yields are indeed higher than today but have not yet returned to the levels we saw in May or July of this year.

Even if the Supreme Court declares most of President Trump's tariffs illegal, the fight is not over. Some industry-specific tariffs, such as those on steel and aluminum, remain legal. This could be the direction the Trump administration takes to maintain revenue and exert pressure on trading partners.

The market always has a story:

🟢 When stocks are down, gold hits new highs, and Bitcoin is green like today, the story told is that gold often breaks out when investors are concerned about inflation, deficits, and public debt burdens. Bitcoin is often seen as a risky asset, but in periods of declining confidence in the monetary system, it acts as a form of "digital gold."

🔴 If gold and Bitcoin decline today, the narrative will be that investors are shifting money from stocks to bonds because bonds offer better yields with lower risk. This exerts downward pressure on Bitcoin as many still consider it a risky asset, and it also puts short-term pressure on gold. Since gold does not provide a yield, when bond yields rise, investors typically prefer bonds over gold.

🌊🗺️ News and stories are like tides, which can rise and fall very quickly, sometimes violently. Meanwhile, the underlying fundamentals and actual demand are like deep ocean currents, slow but persistent, and they are what shape the coastline over time.