Temporary optimism on stock exchanges and markets, in anticipation of inflation data, company news and geopolitics
Latest stock market news
• The US stock market grew by 3-4% on a broad front. Even shares of large pharmaceutical companies were bought up. The only losers were defensive stocks from the XLP, XLU, XLC sectors.
Demand for risky assets led to a slight decrease in prices for US government bonds, and the yield on 10-year bonds again came close to 4.5% per annum. We are expecting data on consumer inflation in the US at 15-30 today.
The threat of recession has decreased, and this helped oil prices rise yesterday.
In flight from risk, gold also fell yesterday to the important support of $3,200.
Bitcoin fell by 2% this morning to $102 thousand.
The dollar showed strength and is trading at 1.11 per euro.
• Six weeks after the unrest over US President Donald Trump's "Liberation Day" tariffs began, the recurring lessons seem to be: wait for details and buy the dip. The China-US rapprochement, which saw the world's two largest economies suspend the toughest tariffs for 90 days, has been better than expected and has been reflected in Asian stock markets, sending Japan higher after a rally in the United States.
• Trump's social media post on Sunday about high drug prices in the U.S. sparked a sell-off in Japanese pharmaceutical stocks on Monday, and the president's executive order itself shifted the focus more to cheaper drugs overseas, sending health care stocks on the Nikkei index higher.
Trump's comments about an expensive "weight-loss drug," presumably referring to injectable obesity treatments from Novo Nordisk and Eli Lilly, could signal pressure to cut spending in the U.S. or increase it in Europe.
Bayer AG's comments after its first-quarter results today could provide insight into how the German healthcare giant plans to navigate an uncertain path forward.
• The US dollar weakened slightly in Asia but still retained most of its gains against the yen, euro and Swiss franc after the trade truce announcement.
Political reversals and doubts about what will happen beyond the next three months remain drags on investment sentiment. Equity futures point to a muted open in Europe and a pullback in the US.
• Analysts expect to see a recovery in German investor sentiment when the ZEW economic research institute releases its May figures today, after tariff concerns sent morale to its lowest level since the start of the war in Ukraine.
• In the US, consumer price index (CPI) data will provide a signal on the timing of potential rate cuts by the US Federal Reserve. Traders are pricing in a 57 basis point cut this year, down from more than 100 basis points in mid-April.
• Trump has announced a forthcoming reduction in drug prices. Ackman: "It looks like Trump has heard me."
The gist of his idea is to force pharmaceutical companies to agree on global prices. Currently, Americans pay the most and effectively finance the development of drugs for the entire world. If companies are not allowed to dump in other countries, this will either reduce prices in the US or raise them abroad, leveling the system.
• Apple (AAPL) is planning a big 2027 with sophisticated bezel-less iPhones, smart glasses, wearables with cameras, desktop robots and more, - Bloomberg.
Apple is considering raising iPhone prices, not because of tariffs, but because of new features - WSJ.
• Goldman Sachs sees the yuan rising to 7 to the dollar as trade talks progress.
Warren Buffett (BRK.B) now makes $13.7 billion a year from his 5.1% share of the U.S. Treasury market.
• Nvidia (NVDA, +5.4%) raised prices on almost all of its video cards and Ai chips H200 and B200, - Digitimes.
Server manufacturers also increased prices - by 10-15%.
The reason is the transfer of Blackwell chip production to the American TSMC plant, where production, materials and logistics costs have increased.
• Several Tesla (TSLA) employees have published an open letter calling on Musk to step down as CEO, blaming him for the decline in demand for the company's electric vehicles - Electrek.
• Chinese battery maker CATL aims to raise at least HK$31 billion ($4 billion) in a Hong Kong listing,
the world's largest listing in 2025.
PRC - NEV sales (Apr 2025) = 1,226,000 = -0.9% m/m = +44% y/y
• In March, smartphone shipments to the Chinese market grew by 6.5% y/y to 22.77 million units.
At the same time, shipments of foreign brands, in particular iPhone, fell by almost 50% to only 1.89 million devices.
• Xiaomi shares fell 5.7% on the electric car scandal.
Xiaomi offered a carbon fiber hood with “dual air ducts” for 42,000 yuan ($5,800) that was supposed to functionally ventilate the wheels.
• Nissan to cut 20,000 jobs, including previously planned layoffs - Bloomberg.
• Alphabet (GOOGL, +3.4%) dropped from Best Ideas List
due to AI uncertainty.
• monday-com (MNDY) rose 0.3% after a strong first-quarter report (+30% annual revenue) and an increased outlook.
• Tesla (TSLA) +7.5%, Amazon (AMZN) and Apple (AAPL) also rose thanks to the U.S.-China deal that lowers costs and improves sentiment.
• Shares in shipping companies Maersk and Hapag-Lloyd rose as trade tensions eased.
• Consumer Discretionary: Jefferies rates Five Below (FIVE) and Nike (NKE) as Buys due to their ability to weather tariff headwinds.
• Consumers who own Siri-enabled devices, including iPhones, MacBooks and AppleTVs, may be eligible to file a financial claim as part of Apple's $95 million settlement
over allegations that the voice assistant eavesdropped on their conversations.
• GM hires self-driving car company leader as chief operating officer.
General Motors has hired Sterling Anderson, the co-founder of a self-driving car company.
• The most profitable platform for launching shields on Solana, Pump Fun will share profits from launched shields with the creators of the shields.
98% of tokens on PumpFun are scams and subject to ragpools - Solidus Labs report.
• BitGo exchange has received a MiCA license in Germany, which will allow it to provide crypto services to banks and financial companies throughout the EU.
Citi predicts that within the next five years, stablecoins will move beyond crypto trading and become part of the global economy, replacing part of foreign exchange reserves.
• The total amount of BTC held in US spot ETFs is about 1.175 million BTC, just 6.5k BTC short of the record 1.182 million.
Glassnode reports that recent inflows have offset previous outflows, indicating a recovery in demand for BTC.
Some tech stocks soared again after the Bitcoin funds report.
• Shares of Next (NXTT) Technology Holding soared for a second straight session on Monday after the software services provider and bitcoin buyer reported its holdings of the cryptocurrency.
• Coinbase (COIN) shares are up 11% in premarket trading. The cryptocurrency exchange will join the S&P 500 next Monday, May 19.
Key events that could impact markets on Tuesday:
- UK employment (March).
- Bank of England Governor Andrew Bailey and chief economist Hugh Peel speak at separate events.
- Germany ZEW business sentiment (May).
- US CPI inflation (April).
- US earnings: Under Armour, Venture Global.
- European earnings: Bayer, held.
Current Fundamental Reviews
• Trump aims to seal $1 trillion in deals during Gulf trip - Axios.
• China to cut tariffs on US to 10% from 125% for 90 days.
US to cut tariffs on China to 30% from 145% (10% base rate + 20% reciprocal)
Effective May 14.
• The US and China want to maintain and balance bilateral trade, have no intention of breaking off economic relations - Bessent.
Bessent: "The UK and Switzerland have taken the lead in terms of trade agreements, the EU has been much slower"
- We want China to rebalance its economy towards greater consumption.
- The current tariff level for China of 30% serves as a "floor", while the 145% level set on April 2 is a "ceiling" to which tariffs can return after the temporary agreement expires.
- It is unlikely that tariffs on Chinese exports will fall to 10%.
- I hope that most tariff issues will be resolved by the end of the year.
• Trump: We have achieved a full reset with China
The agreement does not cover tariffs on cars, steel, aluminum or pharmaceuticals.
Will probably talk to Xi at the end of the week. Spoke to Cook. Apple will manufacture a lot in the US.
China has agreed to open its market to the US and remove all non-tariff barriers.
Beijing has also promised to stop using fentanyl.
Restrictions on rare earth metal exports from China continue - Chinese media.
• The United States has imposed additional sanctions against Iran.
• Turkish Stream could slow down the EU's energy decoupling from Russia - Reuters
From 2021 to 2024, Russian gas exports to the EU via pipelines fell more than fourfold - from 155 to less than 40 billion cubic meters. At the same time, supplies of Russian liquefied natural gas (LNG), on the contrary, increased - to about 25 billion cubic meters. The main buyers were France, Belgium, Spain and the Netherlands.
• Without strong immigration rules, we risk becoming an island of strangers. Net migration has quadrupled between 2019 and 2023, UK Prime Minister Keir Starmer said as he unveiled his immigration reform, quoted by Sky News.
Starmer said it was “a strategy that is absolutely essential to my agenda for change, which will finally take back control of our borders and close the book on a miserable chapter in our politics, our economy and our country.”
• $1B Clean Fuel Deal Announced During Brazil President's Visit to China
Brazil announced two Chinese partnerships Monday, including a $1 billion investment from China's Envision Energy to produce clean jet fuel, as part of the country's presidential visit to China. President Luiz Inacio Lula da Silva met with energy officials.
• Britain and the EU will unveil a joint defence and security pact this week that will see London become part of European defence policy.
The sweeping agreement will bring Britain "closest to the EU since Brexit", according to The Times.
• The Kurdistan Workers' Party (PKK) has announced it is disbanding.
The decision to cease operations was made at a recent PKK party congress in northern Iraq, the Firat News agency, which is close to the group, reported. The Kurds, who number an estimated 25-30 million, are the largest people without a state of their own. They live in Turkey, Iraq, Iran and Syria.
• Fed's Kugler says it has become difficult to judge fundamental US growth.
US central bank officials are having difficulty assessing the underlying strength of the economy.
• The US Treasury posted a budget surplus of $258.4 billion in April,
the second-largest surplus ever, surpassed only by the record $308 billion surplus in 2021.
The main source of the jump in US government revenue is the collection of capital gains taxes from individuals following the stock market boom in 2024.
Customs duties doubled from $8.2 billion in March to a record $15.6 billion.
• Trump urges Republicans to vote for "ONE, BIG, BEAUTIFUL BILL."
"We must WIN! But now, with massive cuts to drug and pharmaceutical spending, and huge revenue from tariffs, our 'BIG, GREAT, BEAUTIFUL, WONDERFUL BILL' is so much BIGGER and BETTER. America's Golden Age is upon us."
• Trump flies to Saudi Arabia for $1 trillion investment. On the way, he may fly to Istanbul for a meeting with Zelensky and Putin, if it takes place.