Big Tariff Pivot + Forward Buying.
- Avory Team
- Apr 11
- 5 min read
So what do we think about this week’s data and what that means for markets and the economy?
We just got a string of reports—from Walmart’s investor day to jobless claims, CPI, Amazon’s event, and new tariff updates—and the read is more constructive. Inflation just posted its best reading since March 2020, with CPI going negative month-over-month, and our real-time indicators show it continues to run low. Important data if you think tariffs will be inflationary. Lower CPI gives the Fed room to cut and consumers room to breathe, real wages. Walmart confirmed they’re not raising prices and instead going after market share. Meanwhile, jobless claims stayed below the 12-month average, Amazon sees no slowdown in consumer demand, and companies like Levi Strauss and Apple are forward-buying inventory—showing a clear strategy to soften any potential tariff hits in near term. Markets also flashed something we’ve been waiting for: a real move in the VIX. Its RSI spiked to a level seen in only 2% of all historical instances—typically a capitulation signal, not the start of a crisis. The forward return profile is stunning: 95% positive over 90 days, with +9.6% average gains and max gain of 31% with min gain of -2% over the full 90 day period. History doesn’t guarantee anything, but context matters—and right now, it says fear may be peaking.
But remember—when you’re investing with a 3–5–7-year view, the weeks and months matter, but what matters most is whether the current environment drives a permanent loss in value. Most of the time, it doesn’t. That’s why we focus on the fundamentals: pricing power, execution, and long-term market share—because liquidity can create short-term fear, but only fundamentals determine long-term outcomes.
Here is the summary if you want just that:
Best inflation reading since March 2020, good for FED
Companies forward buying good
Labor market remains firm
Walmart not passing prices
Tariff pivot
Amazon says consumer demand the same
Vix Spike = Capitulation = Forward Returns Strong
Now this week we got inflation report, investor day from Walmart, jobless claims report, Amazon held an event, and more tariff talk. Let me go in order.
Inflation came in—and as we've been discussing, it's continuing to moderate.
This does three things:
Puts less pressure on consumers.
Means starting point for tariffs is solid.
Fed has more room to cut.
CPI month over month actually went NEGATIVE. First time since March 2020. We have been showing real-time inflation, and that is even lower than CPI. We will track this closely as tariffs continue on.
We also tuned into Walmart’s Investor Day—and the timing couldn’t be better.
The key takeaway: Walmart isn’t planning to take price. Instead, they’re focused on gaining market share.
That’s a big deal.
Walmart touches a massive share of U.S. consumers, and their strategy could have a in inflationary effect—keeping pricing pressure in check across key categories.
We also know companies are racing to get products into the U.S. as fast as possible.
We previously highlighted the record trade deficits in December, January, and February—a clear sign that importers were front-loading shipments to lock in current rates.
Even Apple was still doing this as recently as this week.
THIS IS IMPORTANT:
It delays the impact of any future tariffs, giving businesses time to adjust and soften the near-term economic hit. It also provides runway for tariff negotiations. I cannot emphasize this more!
Levi Strauss reported this week—and their comments below echo our view.
They noted that they’ve already secured inventory for spring and summer through forward purchasing.
This reinforces what we’ve been saying:
Companies are actively mitigating supply chain risks and front-running potential tariffs or delays.
It’s another example of how the impact of new trade policies may be muted in the short term.
Add on the Amazon CEO Andy Jassy on Thursday said they are not seeing any change in consumer trends…
And jobless claims once again came in at a solid rate. Jobless claims were below the 1 year average, despite the increase in Washington DC claims. FYI those DC claims have already come down.
Lastly on those main topics. We saw the administration pivot and paused tariffs by 90 days. Leaving the 10% This is how we read this.
This proves they are watching market conditions.
They are flexible and willing to negotiate.
Again, companies forward bought. Durable goods take 2-3 months on cargo ships, which means if companies forward bought they can again forward buy at tail end of this pause, further lengthening the tariff impact.
Lastly, we think we will begin to hear some deal announced.
Finally, to markets.
Small and mid-cap names, in particular, are the standouts and have been given the uncertainty around the economy.
We built a dashboard that tracks 5 different valuation metrics across indices and converts them into a Z-score—essentially showing how cheap or expensive each group is relative to history.
Right now, small and mid caps are more than 1 standard deviation below normal. Remove biotech, and small caps fall to 2 standard deviations cheap.
Yes, these market caps tend to swing with the outlook for the economy—hence the volatility—but cheap is cheap. You are either investing, or trading.
Turning to market action—we finally saw a meaningful move in the VIX, the market’s volatility gauge.
We like to look at its RSI (Relative Strength Index) to assess whether it’s overbought or oversold. The spike this week ranks in the top 2% of all historical readings, and it’s now in the top 8% overall.
Why this matters:
Historically, when the VIX hits these levels, forward market returns are strong.
90-day forward return: 95% positive
Average return: +9.6%
Max gain: +31% vs. Max decline: -2%
The setup is clear:
Spikes in fear tend to be opportunities, not exit points.
There’s a lot more to dig into, but stepping back—this was an important week.
We saw:
• Positive signals from companies
• Less policy uncertainty from the administration
• Positive economic data, inflation + jobs.
• And we’re now heading into earnings season, which will give us a clearer read on how companies are actually behaving.
For our investors, a quick reminder:
We have less than 2% direct exposure to tariffs across the portfolio.
Plenty to watch
About Avory & Co.
Investing where the world is headed.
Avory specializes in high-conviction equity strategies, emphasizing Secular Growth and Transformation Stories driven by exceptional teams. Data guides decisions. We cater to high net worth investors, family offices, and institutional investors. Note: This information doesn't constitute a recommendation to buy or sell any mentioned securities. Avory is based in Miami, Florida with clients all across the globe.
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Disclaimer: Not a recommendation to purchase or sell any securities mentioned. This is for educational purposes only.
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