Weekly Wrap up by our friends at TradeTheNews.com, for a free trial of real time squawk box, visit HERE The S&P and NASDAQ Composite both surged back above their respective 200-day moving averages for the first time since March when trading got underway this week. Investors welcomed significant de-escalation of US-China trade war when both sides announced significant tariff reductions after meeting in Geneva over the weekend. The Administation touted that China agreed to reduce non-tariff barriers and undertake more purchase commitments in securing a 90-day pause to negotiate. The VIX fell below 20 and gold prices slumped. US Treasury yields rose as traders pared back bets to only two expected Fed rate cuts this year. The de-escalation momentum would largely hold, underpinning equity demand throughout the week. Also, the President’s trip to the Middle East also brought promises of more than $2T in US contracts and investments over the next decade. Separately, The Republican reconciliation bill continued to wind its way through the gears of Capitol Hill, but the SALT issue remains a speed bump to getting Trump’s tax cuts re-upped, for now. US April CPI data were benign, declining m/m as expected, particularly in the headline figures. There were few visible signs of early tariff impacts, which are more likely to materialize in the May reading. Core goods, excluding food and energy, rose by slightly less than 0.1%, which is fractionally below the average of the first three months of the year. A swath of additional economic readings offered mixed signals, while tariff impacts were minimal at most. PPI data was notably soft, but was offset by higher March revisions. April retail sales topped expectations on the headline, but didn’t suggest significant pull forward demand. Treasury yields after topping out above 4.5% in the 10-year and 4% in the 2-year moved lower into week’s end. Also, crude oil prices came under pressure following reports that Iran is ready to sign a nuclear deal with US. For the week the S&P jumped 5.25%, NASDAQ surged 7.2% and the Dow rose 3.4%. Corporate news this week continued to center on earnings reports and the fallout from the Trump trade agenda. Retail giant Walmart managed to beat Q1 expectations but withheld some of its guidance for Q2 over increasing uncertainties about the environment, including rising cost pressures from tariffs. Deere also had a strong quarter, but was forced to cut some of its expectations for the fiscal year due to tariff impacts. American Eagle Outfitters withdrew its FY guidance due to macro uncertainty, sending it shares down double digit percentages, and dragging other youth clothiers down with it. Cisco Systems reported solid results with a burgeoning AI infrastructure business driving new growth. Recent unicorn IPO CoreWeave blew out revenue expectations, though it missed on earnings, and said it was experiencing customer demand accelerating despite the macro uncertainty around trade policy. Ailing UnitedHealth continued its losing ways, announcing CEO Andrew Witty was stepping down for ‘personal reasons’ and suspending fiscal year guidance as medical expenditures are expected to be higher than anticipated. Adding to the bad news, it was also reported that UNH has come under criminal investigation by the DOJ over potential Medicare fraud. Apple was reportedly considering price increases for its fall iPhone line up as it remains dependent on production from China for the bulk of its high end handsets. Walmart management noted prices increases are likely to felt by consumers in June due to higher tariff rates. Coinbase shares jumped double digits after it was tapped to be added to the S&P500 Index, further legitimizing the crypto business as a new segment of the financial landscape. In M&A news, Dick’s Sporting Goods announced it would acquire Foot Locker, offering a more than 85% premium for the shoe store chain that has strong ties with Nike. On Friday Charter Communications announced deal to merge with privately-held Cox Communications in cash-stock deal valuing it at EV of $34.5B.
Summary Stocks opened lower as rates backed up post the US downgrade on Friday. The US dollar lost ground but held 100 on the DXY. The 30-year bond yield climbed back above 5% while the 10-year surpassed 4.5% with the 2-year holding at 4%. Trading was orderly and fairly quiet as the US had essentially already lost is AAA rating more than a decade ago. Animal spirits could be felt in several M&A announcements, and a plethora of debt offering announcements despite the higher UST yields. Coreweave shares charged higher after confirming sale of $1.5B in 2030 bonds at a reported coupon above 9%. Gold prices bounced along with the VIX. Stocks moved up from opening levels led by financials and consumer staples to finish the session in the green. Levels for May 20th below:
The upcoming US Memorial Day Holiday Trading Schedule for Friday, May 23rd, through Monday, May 26th, 2025, is below. Memorial Day (May 26th) Holiday Trading Schedule: Grains Sunday - Closed Monday - Closed Tuesday - 8:30 a.m. CT Open Livestock Sunday - Closed Monday - Closed Tuesday - 8:30 a.m. CT Open Cryptocurrencies Monday - 4:00 p.m. CT Halt 5:00 p.m. CT Re-Open Energy Sunday - 5:00 p.m. CT Open Monday - 1:30 p.m. CT Halt 5:00 p.m. CT Re-Open FX Monday - 4:00 p.m. CT Halt 5:00 p.m. CT Re-Open Interest Rates Monday - 12:00 p.m. CT Halt 5:00 p.m. CT Re-Open Metals Monday - 1:30 p.m. CT Halt 5:00 p.m. CT Re-Open Stock Indices Monday - 12:00 p.m. CT Halt 5:00 p.m. CT Re-Open Sugar, Coffee, Cotton, Cocoa, FCOJ Monday - Closed Tuesday - Regular Hours Canola Monday - Regular Hours U.S. Dollar Index Monday - Regular Hours