Monday Takeaways: The “TACO” Effect Strikes Again

Shah Gilani|October 13, 2025

“Trump Always Chickens Out.”

That’s what they’re calling it on social media – TACO – and Friday’s market meltdown just turned into Monday’s explosive rally.

After the president threatened 135% tariffs on Chinese imports, we saw the worst day since April. The QQQs plunged 3.47%.

But here’s what the panic sellers missed…

This morning, the markets soared as the president walks back his comments. Again.

But that’s not the real story. The real story is what’s happening beneath the surface:

• Chinese exports to the U.S. jumped 8.25% last month – the highest in 2025
• Goldman Sachs reports earnings tomorrow
• We’re still riding along our uptrend support
• The Fed rate cut is still on the table for month-end

With the government entering week three of shutdown and earnings season kicking off tomorrow, how you position today matters.

I’ll show you why this sell-off was narrative driven, where the real support levels are, and why tomorrow’s Goldman numbers could ignite the next leg up.

Click on the image below to get the full breakdown.

Transcript

Hey, everybody. Shah Gilani here with your Monday Takeaways. If you hear a noise in the background, that’s the nor’easter blowing up. A wicked wind.

And nonetheless, it’s a good day on Wall Street. Why? Because the futures are up very nicely. We’re talking double digits and then some.

So why are the futures up? Well, it’s maybe the “TACO” president – “Trump Always Chickens Out” – because after Friday’s X and social media barrage, which really started out on Truth Social but worked its way over to X in terms of commentary, the president suggested a 100% tariff on Chinese imports. That’s on top of the 35% tariff that’s already out there. So 135% total, and markets viewed that as an April redo. We got absolutely hammered.

So what does it look like? Well, it looks like it’s supposed to look like, which is absolute frighteningness.

What I’m going to say here is what matters most for everybody is not what he said, but what he does. And the truth of the matter is the president is walking back already his harsh comments, and the futures are up. So here is this sell-off. This is how bad it is.

Now, here’s our uptrend. We’re kind of maintaining this channel. We’re just running along the bottom of this channel here, all along here, rising, rising, rising. It would be a lot better if we got in between the upper end and here. But no, we’re not. We’ve been riding along the bottom of this trend line, which is fine. But then we see an ugly breakdown, though at least we’ve got support here.

So is it really bad? No, it’s not really bad because it is narrative driven. It is news driven. And the markets were looking for an excuse. Investors were wanting to take profits somewhere along the line.

So this is what it looked like a little closer up here on a three-month view. That’s kind of scary.

The Qs, the same thing, people.

So we look at the Nasdaq 100 through the prism of the QQQs – it was even worse. The QQQs were down 3.47%.

That’s pretty ugly. But still, nonetheless, we’re still intact here on a short-term basis as far as the trend goes.

So the takeaways from what happened last week are more of the same.

Yes, it was the worst day we had since April. And what does it mean?

It means that for sure the president can influence markets with comments on what he’s likely to do, could do, threatens to do on tariffs, especially with China.

By the way, another takeaway from what happened last week was some stats came out that Chinese exports to the U.S. were up about 8.25% last month. That’s the highest bump in 2025. That’s a huge bump month over month. So yikes. We’re not slowing down Chinese imports. Whatever tariffs have been laid out doesn’t seem to be affecting much because China is still exporting boatloads – literally – to the United States.

Now, the 10-year at 4.03. We’re looking for an end-of-the-month rate cut from the Fed, likely 25 basis points, could be 50 basis points, in which case the markets are likely to rally on that. Because the economy hasn’t really fallen too far. It’s kind of gotten soft in some areas. Perhaps in labor, in terms of new jobs being created – not really robust, but not negative.

So we don’t know because we don’t have statistics because the government is closed, entering the third week of the government being shut down. If it extends a lot longer – and right now the vitriol is pretty high – things may not look too good. But we are not there yet. There’s still hope that there’ll be some resolution. We’ll get a continuing resolution. The government will open back up. We’ll get fresh statistics and people will get paid. Pretty scary if you’re a government employee and you’re not getting a paycheck in this environment with prices as elevated as they are. Really scary.

So the takeaways for this Monday are: keep an eye on the markets today. Because if we end up strong today, on the highs of the day, close to the highs of the day, then the market is right back, swinging intact 100%, and we’re in good shape. If we end up fading into the close – with earnings starting tomorrow, and tomorrow, Tuesday, people, we’ve got Goldman Sachs and Citigroup reporting – and I expect Goldman in particular to have knockout numbers, which should be a real positive for the market.

So what are we looking at as far as takeaways on this Monday? How the market closes today is important. If it closes on the soft side or very softly, that’s a problem because that means that nobody believes that the worst has passed. I don’t think that’s going to happen. I think we should have a pretty strong day.

Tomorrow is really important as far as setting up the earnings quarter for reporting. Again, Goldman Sachs numbers tomorrow. I’ve got call spreads on Goldman. I think Goldman’s going to knock it out of the park. I think equity underwriting is going to be good. M&A is going to be good. Fixed income trading is going to be okay. But generally speaking, the capital markets trading should be excellent. Citi will probably say the bank should do really well.

If they don’t, and if they actually add to loan loss reserves like JPMorgan and Wells Fargo did, that’s a problem for markets. But we’re not there yet. So far so good.

We’re still in a bull market, people. The takeaway is: as long as the music is playing, you get up and dance.

Catch you guys next week.