OK....I will have a bit more time next week. BUT...I will totally miss the market day on Tuesday. I will be leaving for San Antonio for a private event about 6:45AM and will not be back till early evening. I also have a bit of overnight travel coming up in June and July......mostly to the Dallas area...that will wipe out a few random market days. WHATEVER....my portfolio and the markets do not care.
It continues: White House announces U.S.-China trade deal, offers few details https://www.cnbc.com/2025/05/11/us-china-trade-tariffs-talks.html (BOLD is my opinion OR what i consider important content) "Key Points Treasury Secretary Scott Bessent said that U.S.-China trade talks in Geneva over the weekend were “productive.” He said he would give more details in a complete briefing on Monday morning. Bessent added that President Donald Trump is “fully informed” about the discussions. The White House on Sunday announced a “trade deal” with China without providing specifics, after Trump administration officials spent the weekend negotiating with their Chinese counterparts. While details of the deal are still unclear, any de-escalation in the ongoing trade war could bring much-needed relief to a global economy that has been roiled since President Donald Trump’s April 2 tariff announcement. Treasury Secretary Scott Bessent said Sunday that the trade talks that took place in Geneva over the weekend were “productive.” He said the talks yielded “a great deal” of productivity and that he would give more details in a complete briefing on Monday morning. Bessent also said that he and U.S. Trade Representative Jamieson Greer both spoke to President Donald Trump on Saturday evening and “he is fully informed” about the discussions. Greer said during remarks on Sunday that the officials reached some form of a “deal,” but did not provide any specifics. He hailed the discussions as “very constructive.” “It’s important to understand how quickly we were able to come to agreement, which reflects that perhaps the differences were not so large as maybe thought,” Greer said. “We’re confident that the deal we struck with our Chinese partners will help us work toward resolving that national emergency,” he added. The high-stakes negotiations in Switzerland this weekend come amid widespread economic uncertainty stemming from the U.S.-China trade war. The two nations have been engaged in a tariff tit-for-tat in the weeks since Trump announced 145% tariffs on Beijing. In response, China raised its levies on U.S. goods to 125%. The standoff has roiled the financial markets and sparked concerns of fewer goods and rising prices for consumers. Trump praised the first day of discussions, writing that the U.S. officials had a “very good meeting today with China” in a Saturday Truth Social post. “Many things discussed, much agreed to,” Trump wrote. “A total reset negotiated in a friendly, but constructive, manner.” Bessent said that he and Greer met with the vice premier of China, in addition to two vice ministers, who the treasury secretary called “integrally involved” in discussions." MY COMMENT This looks very promising. Although I am sure the media will be all over it....with there usual SKEPTICAL and NEGATIVE language. NOW....if this happens....the trade deals are going to start to flow like water. So much for all the NEGATIVITY about inflation, stagflation, recession, etc, etc. In reality much of this trade "stuff" is going to be settled before much of the tariffs even happen. It is called....NEGOTIATION. As an extremely experienced negotiator....I could see where this stuff was all headed from day one. CLASSIC tactics and strategy. AND......in the end.......the result is going to be very good for the USA and our business community. Although....I have yet to see China EVER live up to any treaty, trade deal, or anything else they commit to do or not do.
BUT....I would not be surprised if the markets will find some way to crap all over this tomorrow.....I am curious to see the futures tonight. AND....even if all this trade stuff quickly falls in line.....the media will simply quickly transition over to the next 3-4 new fear-mongering topics and all the ink and opinion that was wasted on trade will simply be quickly forgotten. NEVER MIND.
Sooner or later the truth comes out. In this case....it comes out later......and....as usual will be ignored. How much inventory did companies actually build ahead of tariffs? https://finance.yahoo.com/news/how-...ctually-build-ahead-of-tariffs-140916931.html MY COMMENT Short answer....not much: "Deutsche Bank’s Binky Chadha analyzed the data to estimate how much extra inventory companies have accumulated. It’s not much."
AND....lest we forget. EARNINGS were HUGE this time around with 90% in the can. Although...NVDA remains to be seen. Critical Data • 90% of S&P 500 companies have now reported results, 78% reported a positive EPS surprise.....62% reported a positive revenue surprise. • For Q1 2025, year-over-year earnings growth rate (S&P 500) is 13.4%. 13.4% represents the second-straight quarter of double-digit earnings growth. • As of March 31, year-over-year earnings growth rate for for Q1 2024 was 7.1%. https://advantage.factset.com/hubfs...k/Earnings Insight/EarningsInsight_050925.pdf
Besides announcements the big news this week......CPI and PPI. "The week ahead will bring a fresh update on inflation, with the release of the Consumer Price Index (CPI) on Tuesday, as well as the Producer Price Index (PPI) on Thursday. Retail sales will offer a read on the health of the American consumer. And investors will also be on the lookout for advancing trade deals, following a limited, bilateral pact with the UK." https://finance.yahoo.com/news/infl...-focus-what-to-watch-this-week-141426449.html
As you probably would expect, I agree with some of the comment and some not so much...LOL. From what I can see these are no where near actual "deals", but a beginning point of working through a long laundry list. That is good because we have to start somewhere. Everything has to have a beginning. If it ends up being an actual deal it will be a long road to settle. However, if it offers some clarity and calms the tensions, puts us in a better position....I'm all for it. I can't agree on it being a good example of negotiation. If this is "classic" strategy....I would love to be up against that. Especially, since they were continually telegraphing their moves out in the open. I have been in more than a few "negotiating" settings myself, and the ones coordinated in the fashion these have....well, we just sat back and let them tell us most of their moves without having to do a thing early on. Especially when the other side loves to talk and put on a show. We had their plan and a lower starting point before we ever got in the room. Now, all that said....who cares right? As long as we eventually end up in a decent spot and things work out to our favor....I am all for getting it done and moving on.
Futures are very strong.....looking good. But as I always say.....futures dont mean much. I am sure we will see a good, if not great, open. But how the day progresses will.....as usual....be up in the air till it is over. We will get CPI on Wednesday and PPI on Thursday. So.....it will be a week where stocks will be subject to much speculation, opinion, distortion, rumor, innuendo, and other market impacting media commentary.....all week.....on a number of topics. As usual the approach for any long term investor will be to simply.....IGNORE IT ALL.
The obvious event driving the markets today. BIG gains early in the day.....so far. BUT....lets see what happens as the day progresses.....at some point there will be profit taking. On the flip side......a lot of "professionals" are siting on a big pile of cash. They will now or seen be scrambling to get re-invested. BUMMER for them. Dow surges more than 1,000 points after China and U.S. agree to temporary tariff cuts: Live updates https://www.cnbc.com/2025/05/11/stock-market-today-live-updates.html (BOLD is my opinion OR what i consider important content) "U.S. stocks rallied Monday after the U.S. and China agreed to temporarily slash tariffs following negotiations over the weekend in Switzerland. The Dow Jones Industrial Average surged 1,021 points, or 2.5%. The S&P 500 popped 2.9%, and the Nasdaq Composite surged 4%. Treasury Secretary Scott Bessent said on Monday that talks with China had been “very productive” and both countries had agreed to cut “reciprocal” tariffs by 115% for 90 days. That brings U.S. tariffs on Chinese goods down to 30%, and Chinese tariffs on U.S. imports to 10%. Bessent told CNBC’s “Squawk Box” on Monday that he expects to meet once again with representatives from Beijing in the “next few weeks” to iron out a bigger agreement. Best Buy, which sells electronics and appliances vulnerable to tariffs, popped 8.7%. Dell Technologies and On Semiconductor climbed 7.8% and 10%, respectively. Amazon advanced more than 8%, and Apple jumped 5%. The iShares Semiconductor ETF (SOXX) jumped more than 6%. Tensions between China and the U.S. soared after President Donald Trump last month unveiled 145% tariffs on imported goods from China. Beijing then retaliated with 125% duties of its own targeting U.S. goods. “We believe peak uncertainty over trade has passed, but market volatility is likely to stay,” UBS head of fixed income Kurt Reiman wrote in a Monday note. “Our base case remains that the effective US tariff rate (ex-China) will moderate toward 15% by year-end.” The S&P 500 nearly closed in bear market territory — down more than 20% from a record set in February — following the “liberation day” announcement. Stocks quickly rebounded after Trump cut tariffs on the rest of the world, but gains were held in check as investors awaited progress on U.S.-China trade negotiations. “Nothing is ever permanent when it comes to Trump’s tariffs (and there is a July 9 deadline for reciprocal tariffs and an August deadline for China), but maybe Trump has found a rough tariff equilibrium for now – a 10% universal tariff, 25% product tariffs, and 30% China tariffs,” Piper Sandler head of U.S. policy Andy Laperriere wrote in a Monday note. Should the morning’s futures gains hold through the close, the S&P 500 would be near positive territory for the year. Commerce Secretary Howard Lutnick said Sunday that the 10% baseline tariff rate on imports from other countries is likely to “be in place for the foreseeable future,” echoing Trump’s comments from days prior." MY COMMENT OUTSTANDING. AND.....the markets LOVE IT. We are heading toward a baseline of 10% reciprocal tariffs on world trade.
AND....of course: U.S.-China breakthrough sends tech and chip stocks soaring https://www.cnbc.com/2025/05/12/glo...s-rally-as-us-and-china-agree-tariff-cut.html "Key Points Global technology and chip stocks rallied on Monday after the U.S. and China agreed to pause most tariffs on each other’s goods. Tech firms with exposure to China — including Amazon and Apple — rose sharply. Major chip stocks including Nvidia and TSMC also jumped."
To continue the theme above. US-China tariff agreement may add fuel to 'Magnificent 7' stock rally https://finance.yahoo.com/news/us-c...l-to-magnificent-7-stock-rally-130856370.html (BOLD is my opinion OR what i consider important content) "A US-China tariff standstill may mean the "Magnificent Seven" trade does anything but stay in place. While global markets soared on the news of reduced tariffs, the closely watched Roundhill Magnificent Seven ETF (MAGS) ripped 6% in premarket trading. "I think given that [Mag 7] are showing that they can still monetize AI capex and some of them are increasing capex guidance as well is quite positive," eToro global markets analyst Lale Akoner said on Yahoo Finance's Opening Bid podcast. The US and China agreed on Monday to ratchet down the tariff war for 90 days as each economy begins to feel the pressure of bruising penalties. After a weekend of meetings in Switzerland, the US will reduce "reciprocal" tariffs on goods from China to 10% from 125%. A separate 20% tariff imposed by President Trump over what he says is China's role in the fentanyl trade will remain intact. China will cut its retaliatory tariffs on US goods to 10% from 125%. Traders use the Roundhill Magnificent Seven ETF as a proxy for the Mag 7, as its top holdings are the seven stocks. "With US/China clearly on an accelerated path for a broader deal we believe new highs for the market and tech stocks are now on the table in 2025 as investors will likely focus on the next steps in these trade discussions which will happen over the coming months," Wedbush tech analyst Dan Ives said in a note this morning. Even before the latest trade news, the Mag 7 trade was climbing back into top form after a challenging stretch this year. The Roundhill Magnificent Seven ETF rallied 18% from the April 8 low ahead of Monday's opening bell. The gains reflect several items. First, earnings from tech megacaps such as Microsoft (MSFT) and Alphabet (GOOG, GOOGL) crushed estimates. These companies beat analyst earnings estimates by an average of 8% in the first quarter, according to data crunched by Barclays. The earnings outperformance quieted concerns that AI demand was slowing down due to the Trump administration's trade war. Meanwhile, growth for the big-cap tech players in the first quarter was impressive. Goldman Sachs data shows Mag 7 companies delivered 28% average earnings growth in the first quarter. The 493 other stocks in the S&P 500 delivered only 9% growth. The read-through here is that the Mag 7 will likely handily beat the broader S&P 500 in earnings growth this year. With valuations off their 2024 peaks, investors have reasoned it's a good time to nibble. Despite the snap-back rally, some pros continue to advise caution before going all in again on the Mag 7, given the economic uncertainty stemming from the trade war. "I do believe that diversification would work in this environment," Akoner added." MY COMMENT "Starting to nibble"......investors should have been GORGING on these stock in at or around the April 7/8 lows. Of course I am BIASED.....since I own them all except META.
BUT: Markets pare bets on Fed rate cuts following U.S.-China tariff delay https://finance.yahoo.com/news/markets-pare-bets-fed-rate-135200266.html
AND....of course: Treasury yields soar on hope a recession will be avoided after temporary China-U.S. deal https://www.cnbc.com/2025/05/12/us-treasury-yields-us-and-china-agree-to-slash-tariffs-.html
I think this has potential to be have a greater long term impact than trade. Well....not really....but still BIG. A HUGE potential step for people in the USA.....and I am not talking politics...I am talking health care costs, economics, trade, fairness, and insurance. BUMMER...for the drug companies.....but...what are they going to do...look like GREEDY ASSES by challenging this....in the face of prices here in the USA being outrageous compared to the same exact drug elsewhere. This will be a PR DISASTER for drug companies if they dont just bite the bullet and go along. It is time to spread the price of these drugs world-wide on an equal basis. Stop the......INEQUALITY. Trump to sign order to cut some U.S. drug prices to match lower ones abroad https://www.cnbc.com/2025/05/12/trump-drug-pricing-order-most-favored-nation.html "Key Points President Donald Trump will revive a controversial policy that aims to slash drug costs by tying the amount the government pays for some medicines to lower prices abroad, White House officials said. The order is a blow to the pharmaceutical industry, which is already bracing for Trump’s planned tariffs on prescription drugs. It is Trump’s latest effort to try to rein in U.S. prescription drug prices, which are two to three times higher on average than those in other developed nations."
AND.....YES.....the April lows of April 7/8......are in the can. We and the markets have now moved on.
In spite of the environment today I have three stocks in the RED.....WMT, PLTR, and COST. WMT reports later this week. BUT....I am making money today. YIPPEE-KI-YAY.
With a little bit of luck with CPI and PPI this week...it could be an EPIC week for the big averages and investors. EXCITING....to see how the entire week will play out. The FUN of being an investor. As a long term investor you can ENJOY times like this......as an observer of interesting events....rather than stressing out. I note that RIGHT NOW.....I have cut my year to date LOSS to......(-2.9%). If we get a little luck this week I might be able to end the week even closer to being EVEN. BUT.....what it is....it is. BRING IT ON.
