There’s a record disconnect between rising stocks and skittish volatility markets

With US exchanges closed for MLK Day, European and Asian stock markets have been the main release valve for reaction to President Trump’s fresh tariff threats to Europe, which followed sharp pushback from European allies around America’s ongoing Greenland pursuit.

In a Truth Social post on Saturday, Trump warned that the US would impose tariffs on several European countries — Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland — unless a deal is reached for the “Complete and Total purchase of Greenland.” A 10% tariffs on “any and all goods” shipped to the US from the eight countries would take effect February 1, rising to 25% by the start of June if an agreement isn’t reached.

European stock markets opened lower, with the broad STOXX Europe 600 down 1.2%. France's CAC 40 index, Germany's DAX, and the UK's FTSE 100 fell 1.5%, 1.3%, and 0.5%, respectively, as of 5:12 a.m. ET. Asian markets also closed lower on global trade fears, with Tokyo's Nikkei 225 down 0.6%.

Although liquidity is thin, US risk assets weren’t entirely shielded, with S&P 500 Futures (Mar ‘26 E-Mini contract) down a little over 1% as of 5:45 a.m. ET. Bitcoin also dropped sharply, down ~2.5% from its undisturbed price.

Meanwhile, precious metals (again) hit all-time highs, with spot gold up more than 2% to a record $4,690 per ounce and silver hitting a record $94.08 per ounce, extending its rally this year.

TACO vs. TART?

A popular market narrative over the last year has been that President Trump often employs tariffs as threat, using them as a bargaining tool for other goals. But the “Trump Always Chickens Out” argument isn’t really borne out by the data. As Luke Kawa pointed out last year, the reality is that the US has raised its levies rate on both occasions that Trump has been in the White House, suggesting that the more accurate acronym is really: “Trump Always Raises Tariffs.” For now, this latest reactive threat to America’s allies looks more like a bargaining tool than a high-priority bit of trade policy.

The saga of Nvidia’s H200s has more confounding twists and turns than a house of mirrors.

On Friday evening, the Financial Times reported that suppliers for Nvidia’s H200 chips have halted production amid reports that Beijing has banned these processors from entering the country. Bloomberg had previously reported that China would begin to allow H200 imports for commercial use “as soon as this quarter.”

Nvidia called upon suppliers to boost output of components for these H200 chips after reportedly receiving more than 2 million orders from Chinese customers while only having roughly 700,000 in inventory.

Chinese policymakers have been keen on boosting their domestic semiconductor industry, with Nvidia’s H20 chips (a nerfed version of the H200) not breaking through into the market in a meaningful way even after export restrictions were lifted last year. Even though the H200 is considerably more powerful than the H20, recent reporting by both the FT and The Information suggests that regulators are similarly intent on limiting access.

That’s creating a more robust black market for Nvidia’s flagship Blackwell chips, per the FT:

One Chinese seller of Nvidia AI servers said many local customers had cancelled orders for the H200. Instead, they have switched to the more advanced B200 and B300, which are banned for export into China by Washington, leading to an active black market for the chips.

The Department of Commerce had recently revised its export review policy to lay the foundation for Nvidia to begin to ship these chips to the world’s second-largest economy, while US President Donald Trump imposed a 25% levy on H200 imports into the US that will not be used domestically (that is, will be brought in then re-exported to China). These announcements also cover AMD’s MI325X chips.

Silver’s ridiculous romp higher in 2025 and at the start of this year is showing some signs of fraying around the edges.

And with just how fierce the move higher has been, strategists are warning of the potential for intense downside as some of the key parts of the fundamental and technical theses for silver are starting to look less solid.

Michael Purves, CEO of Tallbacken Capital Advisors, who’s been bullish on the shiny metal, thinks it’s once again time to hedge long exposure.

On Thursday, he recommended selling $95 strike calls on the iShares Silver Trust that expire in February to purchase $75 strike puts.

Purves previously recommended that clients hedge their silver exposure on December 26 (its 2025 peak) before declaring that the coast was once again clear for longs on December 30.

“It might be surprising to know that speculative long silver futures positions are at 20 month lows, or that Open Interest is at five year lows,” he wrote. “Once again, hedging long positions is in order — particularly given the distorted put-call skew which allows [investors] to sell calls to finance long put positions.”

Viresh Kanabar, an investment strategist at Macro Hive, followed this up on Friday by flagging one of several key changes in the market structure for silver. The physical market tightness, cited by bulls as an important driver behind silver’s skyward ascent, is showing signs of reversing.

“1m forwards on physical silver have flipped back to contango,” he wrote. “This lines up with physical ETF outflows and evidence that high prices are weighing on industrial demand.”

“In short, we are not bullish on silver at these levels, instead, see increasing signs of risks skewing to the downside,” Kanabar added.

David Cervantes, founder of Pinebrook Capital Management, told clients on Thursday that he’s taken a short position in silver by owning put options on SLV with three months to expiry, noting that its outperformance of the stock market over the past 100 and 252 days has reached unprecedented levels.

“THIS IS HIGHLY SPECULATIVE AND A SMALL GAMBLE-SIZED WAGER WILL BE MADE OVER WHICH SLEEP WILL NOT BE LOST,” he emphasized.