Earnings uprights, tariffs creep, and the blackout bet — Monday briefing

Opening Note

Markets started the week thinking “same old” — more Fed cuts, more liquidity, more upside. But underneath the veneer, tectonics are shifting again. A surge in investment banking deals, a push to dilute transparency, and rate markets that look like they’re begging for chaos all suggest the playbook is being rewritten on the fly. If you’re a HENRY, yesterday’s narrative is today’s trap. Let’s see what’s breaking.

1. M&A revival hints at opportunistic liquidity, not strength

Jefferies just reported its best quarter ever in investment banking, driven by a rebound in deal activity and capital markets issuance. Revenues hit $2.05 billion, with $656 million from advisory services alone — it vaulted past analyst estimates. Yet the market yawned: the stock fell 1.5% after-hours. (Barron’s/Jefferies)

That’s the tell: the tape smells liquidity, not conviction. When banks can underdeliver beats and still post record advisory income, it’s a sign of desperation from clients chasing acquisitions before rates rebound. This “M&A is back” line sells optimism. But the real motive is timing — corporate leaders want to lock deals before policy tightens or credit conditions freeze. Be wary of reading strength into it.

2. Trump’s earnings sabre-rattle: fewer updates, more opacity

Donald Trump has renewed calls to abolish mandatory quarterly earnings reporting, aiming to shift U.S. public companies toward semiannual disclosures. He argues it reduces corporate burden; critics argue it undermines transparency. (Investopedia) The SEC is reportedly open to comment.

Why this matters: In a world already scrambling to calibrate surprises, fewer reporting checkins will deepen narrative drift. You won’t just be chasing earnings beats; you’ll be chasing the exceptions. The street loves rules because they force discipline — removing them lets insiders lean into asymmetric information. In practice, that’s a tailwind for volatility, not calm.

3. Real rates still pinning equities — the yield curve whisper

The Fed cut rates in September, but the 10-year Treasury yield barely budged. Real rates remain anchored around 1.5–2% (nominal less expected inflation), compressing equity upside. The market may be discounting cuts, but it hasn’t priced in the full disinflation path.

When data is dark (thanks to shutdowns), forward expectations govern price. And forward expectations assume perfect policy execution — a dangerous assumption. The credit spread compression earlier may have masked this tension, but as real rates bake into equity multiples, any hint of inflation surprise or hawkish pause will rip multiples downward.

4. Tariff creep and global spillbacks: not just a U.S. show

Even as Trump pushes the storytelling about fair trade, the real damage is in the periphery. Tariff adjustments on China, Canada, and under-the-radar reciprocal moves are shifting supplier incentives, supply chains, and embedded inflation across sectors. The ECB recently acknowledged trade war spillovers and is shifting models to account for its blunt force trade shocks. (ECB release)

Foreign exporters adjust faster than the U.S. can signal policy. That means embedded inflation may show up first abroad and then ricochet home. If tariff narratives get soft, remember the effects were already seeded in margins, sourcing, and logistics. The narrative is polite; the impact is ugly.

Strategy Spotlight — AlphaFactory Protective

Once again, the defense play looks best in this environment. Surmount’s AlphaFactory Protective remains my go-to because it doesn’t guess whether the Fed cuts or narratives hold — it reacts. It dynamically weights equities vs. gold based on volatility thresholds and momentum/value signals, and automatically hedges when risk regimes shift.

In a week where M&A beats, fewer disclosures, rate pinning, and tariff noise dominate headlines, this stress-aware posture protects you from tail surprises. It won’t outrun a blow-off rally, but it won’t bury you when the narrative fractures. That’s not marketing — it’s what you want when consensus is fragile.

Big Picture

Last week, the narrative threads unraveled — now the market is stitching new ones from mismatched yarn. The revival in dealmaking is liquidity chasing maturities, not conviction. The push to reduce disclosure transparency is a power grab masked as relief. Real rates are the silent burden on equities. Tariff spillovers don’t require wall-to-wall headlines to inflict damage.

The game ahead: bet on regimes, not headlines. Hedge the opaque, favor strategies that survive when data vanishes, and treat rallies as opportunities to reassess, not celebrate. Next week, fewer certainties plus fewer official anchors — and that’s your margin of risk.

See you in the tape.
Analyzed Investing

Educational content only; not investment, tax, or legal advice. Markets change—so should your priors.