Trump-Powell rivalry, stock market news and geopolitics
Latest stock market news
• Yesterday, US stocks rose broadly by an average of 2.6%. Government bonds and the US dollar also rose in price. All on positive hopes of de-escalation of the trade war. This optimistic trend has continued since the morning.
Bitcoin rose to almost $93 thousand. Gold fell and is trading just below $3,400.
I wonder how long the market will react with a rapid growth or fall to every word of Trump? After all, much of what he says simply pumps up emotions, except, of course, his decrees.
• Listening to President Trump on Tuesday, it seemed as if all the vitriol directed at Fed Chairman Jay Powell — the threats, the insults — was some kind of crazy misunderstanding. Now Trump says he had “no intention of firing him,” but was merely hinting cautiously at a rate cut or two.
At the same press conference, Trump said the exorbitant tariffs on Chinese goods imposed after the rapid escalation of the tit-for-tat trade war — so high that the actual numbers have become irrelevant — would soon be reduced “significantly.”
• The market reaction was immediate, with investors rushing back into the dollar after several days of heavy selling, dubbed the "sell-off of America," that sent the currency to multi-year lows against currencies such as the euro and the Swiss franc.
Wall Street also saw stocks rise, helping to boost stock markets across Asia and looking set to support Europe as well. With just a week left until the symbolic 100th day of Trump’s second term in the Oval Office, one might think that market participants would have grown accustomed to his relentless streak of sharp turns and sharp reversals.
Instead, there is a lot of confusion and numerous theories about what is going on behind closed doors.
• Many analysts have suggested that with the dollar in freefall, Treasury Secretary Scott Bessent has stepped in again to be the voice of reason, explaining how disruptive any intervention in an independent central bank would be to markets. He is also believed to have done so during the Treasury market collapse earlier this month, which led to the delay of the “Liberation Day” tariffs.
• US-Japan talks a precedent? However, many analysts insist that concrete trade agreements need to be reached before real stability returns to markets. The Trump administration has invited its old ally Japan to the first round of talks, which could set a precedent for other trading partners. A source told Reuters that the two sides are approaching a temporary agreement, but the most pressing issues are being put on hold for now.
• Bessent echoed Trump's assertion that de-escalation with China is likely, but called future talks with Beijing "tedious" and the two sides have yet to agree to even begin talks. At least for now, the winds of change appear to be blowing in a favorable direction for markets.
• Tesla, X and SpaceX boss Elon Musk told analysts he would significantly scale back his chainsaw work on DOGE to focus on running his own companies. Tesla shares jumped 5.5% in after-hours trading, though that's only a dent in the stock's nearly 50% drop from its December peak.
• Trump: 'No intention to fire Powell.'
• China has reduced its import of cars from the US to a 10-year low, according to Chinese customs data.
• The US Justice Department has ordered Google (GOOG) to sell its Chrome browser in an antitrust case - WSJ. It also wants Google to end its agreements to be the default search engine on smartphones and give competitors access to its data.
The company has rejected the claims, calling the proposed measures a "competitors' wish list." The ruling could set a precedent for regulating Big Tech and, if implemented, could result in multibillion-dollar losses for Google.
• Cryptocurrency bigwig Paul Atkins has been officially sworn in as the 34th Chairman of the SEC.
• Citi hires for FX as trading volumes rise, currencies volatile
• Open AI would be interested in acquiring Google Chrome - executive
• Goldman Sachs predicts that gold will reach $4,000 by the middle of next year as geopolitical tensions and doubts about fiat currencies continue to increase gold's appeal.
• The US is introducing duties of up to 3,521% (!) on imports of solar panels from a number of Southeast Asian countries, - Bloomberg. For example, duties for Cambodia reached 3,521%, for Vietnam - 396%, and for Thailand - 375%. The duties were the result of an investigation that revealed dumping and government subsidies from these countries.
Vietnamese indices fell by more than 5%.
• The U.S. is pushing India to give Amazon (AMZN) and Walmart (WMT) full access to its $125 billion e-commerce market as part of ongoing trade talks.
With a 26 percent tariff on Indian exports hanging in the balance, Washington calls current restrictions on foreign retailers “non-tariff barriers.”
• Investors are moving capital out of the US and into Europe. Germany is increasingly seen as a new safe haven. The yield gap between 10-year US Treasury bonds and German Bunds has widened to 1.95 percentage points, the highest since February. - Holger Zschäpitz
• Circle announced the creation of the Circle Payments Network (CPN), a new payments infrastructure for banks, neobanks, fintechs, wallets and other market participants. The network aims to provide instant, low-cost and transparent cross-border transfers using regulated stablecoins, including USDC, EURC and others. Participants include major international banks.
• Eric Trump: “Under my father’s presidency, the Bitcoin price will exceed $250,000.”
• XRP leads altcoin inflows last week - Coinshares.
• Dutch bank ING is preparing to launch a new stablecoin together with a number of other banks and crypto companies.
The goal is to use the opportunities of the new European MiCA regulation, which opens the way for the issuance of regulated stablecoins in the eurozone. According to the rules, issuers are required to have a license and keep reserves in EU banks.
• GoldmanSachs Chief David Solomon: A stressful time for markets, but by no means a crisis.
• "Trump's team is looking for a weak dollar, but a sharp strengthening of the yen is forcing leveraged traders to exit positions in stocks and bonds.
• It's good that BTC understands that if bond yields rise, the Fed will have to print money," - Arthur Hayes.
• Pharmaceutical companies are wary as the Trump administration considers a policy of linking U.S. drug prices to those in other developed countries.
Such international reference pricing could significantly impact the industry, as it is expected to be implemented through the Centers for Medicare and Medicaid Services (CMS). The potential policy is seen as a more critical issue than pharmaceutical tariffs, given that U.S. drug prices are currently three times higher than those in other developed countries.
• Amazon (AMZN) shares rose 4% after Wells Fargo said AWS had suspended leases for some data centers, particularly overseas.
The move is seen as part of routine capacity management rather than a change in expansion plans. But AWS CEO Kevin Miller confirmed there were no fundamental changes.
• Standard Lithium (SLI) shares rose 4% after its Southwest Arkansas project was designated a transparency project by the Trump administration,
a status that provides increased federal support while positioning the project as a reliable domestic source of lithium.
• Northrop Grumman (NOC) shares fell 13% after the company reported a sharp decline in first-quarter profit and revenue, reflecting significant costs related to the B-21 bomber program.
The company also cut its full-year profit forecast amid manufacturing changes and the winding down of space programs.
• 3M (MMM) shares rose 8% after the company reported better-than-expected first-quarter results despite warning of the potential impact of tariffs.
The company maintained its full-year outlook to account for the impact of tariffs, while noting the challenges to its financial outlook due to ongoing trade negotiations.
• Lockheed Martin (LMT) shares rose 1% after strong quarterly results and reaffirming full-year guidance.
The defense contractor reported a 4% increase in sales and a rise in net income, maintaining the previous year's momentum.
• Verizon (VZ) reported first-quarter results that beat expectations, with revenue up 1.5% and earnings per share rising.
The company continues to forecast growth in wireless revenue and adjusted EBITDA, despite a widening postpaid phone net loss.
VZ shares rose just 0.6%, underperforming the broader market.
• The US Federal Commission will sue Uber over its push for a paid subscription. The company is accused of worsening its free service in order to promote Uber One for $9.99 per month.
• META could lose $7 billion in ad revenue in China, according to a new estimate from analysts at research firm Moffettnathanson.
Meta doesn’t offer its services in China, but advertisers from the country, namely Femur and Shin, buy ads on its platforms to reach customers in the U.S.
• Gasoline prices to fall as Trump's trade war kills oil demand - The Telegraf.
• Swiss pharmaceutical giant Roche promises to invest $47 billion euros in the United States.
• Investment plans include new research and development sites in four U.S. states and the creation of more than 12,000 jobs.
Shares of CoreWeave (CRWV) jumped 9% on Tuesday.
• Wall Street analysts have begun covering the Nvidia-backed artificial intelligence company (NVDA), which made its public debut in late March.
• VW Group returns to China with new models and its own self-driving systems.
Volkswagen Group unveiled five new models developed for China and its own self-driving system in Shanghai on Tuesday.
• Billionaire Carl Icahn acquired a 34% stake in Bausch Health (BHC).
U.S.-listed shares of Bausch Health, the parent company of contact lens maker Bausch + Lomb, rose 10%.
• Musk: "Next month I'll spend more time on Tesla instead of DOGE." That's why even after a bad report, TSLA shares are up 5% in premarket trading. They are also helped by the growth of the broad market after Trump's positive tweet about not firing Powell.
Musk has decided to start saving TSLA. That's what shareholders expect from him.
• INTC shares are up 2% in premarket trading. The company will lay off 20% of its workforce (about 22,000 people).
Last year, it laid off about 15,000 people.
• ENPH shares fall 10% to $48 in premarket trading after earnings.
Key events that could impact markets on Wednesday:
- Flash PMI reports from the UK, Germany, France.
- Eurozone trade balance.
- Fed Governor Waller, St Louis Fed President Musalem, Cleveland Fed President Hammack and Chicago Fed President Goolsbee speak.
- IMF and World Bank meetings continue in Washington.
- Bank of England Chief Economist Pill speaks at Leeds University Business School.
Current Fundamental Reviews
• Trump to visit Saudi Arabia, Qatar and UAE May 13-16 - White House.
• Trump said he would attend Pope Francis' funeral in Rome with his wife Melania. "We look forward to being there," the US president wrote on his social network Truth Social. Zelensky also plans to attend the Pope's funeral.
• The US will face a recession this year, the Institute of International Finance (IIF) reports - WSJ. The IIF calls the expected recession "artificial," caused by policy changes, especially on trade and migration due to Trump's possible return, rather than an external shock like 2008 or COVID.
• The US economy could shrink by 0.8% in the third quarter and by 0.3% in the fourth quarter of 2025, the Institute of International Finance (IIF) forecasts.
• The Fed could cut rates six times during 2025, starting as early as June.
• China to impose sanctions on US Congress members and others for 'gross interference' in Hong Kong affairs - South China Morning Post.
• China has begun to disguise its own goods as South Korean in order to avoid American duties - Reuters, citing data from the South Korean customs service.
• The Chinese Foreign Minister held a telephone conversation with his British counterpart - Chinese Foreign Ministry. We are ready to cooperate with the UK to remove all distractions - Chinese Foreign Ministry.
• Britain close to major military trade deal with EU - The Times
• The IMF has lowered its global GDP growth forecast for 2025 to 2.8% from 3.3% in 2025.
- The IMF has revised down its China GDP growth estimate for 2025 to 4.0% from 4.6% in the January estimate.
- The IMF has lowered its Japan growth forecast to 0.6% in 2025, down 0.5 percentage points from the January forecast.
- The IMF has lowered its UK GDP forecasts to +1.1% in 2025 from the previous +1.6% and to +1.4% in 2026 from the previous +1.5%.
- IMF Gourinchasis: The US dollar has depreciated in an orderly manner, without any shocks to currency markets.
• The government budget deficit in the eurozone countries in 2024 decreased to 3.1% of GDP compared to 3.5% a year earlier.
In the European Union countries - to 3.2% of GDP from 3.5%.
At the same time, the government debt in the countries using the single European currency increased to 87.4% of GDP from 87.3%, in the European Union - to 81% of GDP from 80.8%.
• Von der Leyen: World 'queuing up' to work with Europe amid Trump tariffs
European Commission President Ursula von der Leyen said countries were ready to work with trusted trading partners in Europe after Trump imposed broad trade tariffs.
• In Canada, less than a week before the parliamentary elections, the Liberal Party of Canada, led by Prime Minister Mark Carney, is in the lead
- results of a Nanos Research poll.
• A Japanese delegation will deliver a letter from Prime Minister Ishiba to Chinese President Xi this week as Tokyo tries to avoid being caught in the crossfire of rising trade tensions between China and the United States.
Japan's finance minister is visiting Washington this week, where the yen issue will be among the topics of discussion.
Although Tokyo does not expect a currency agreement, Japan wants to understand the U.S. position on the exchange rate ahead of broader trade talks. There is little room for intervention or rate hikes.
Japan has sold $20 billion in foreign debt.
The sale was likely prompted by Japanese pension funds selling U.S. Treasuries, according to the Financial Times.
• Future of 21st century will be defined by India-US partnership - Vance Vance explains the real goal of Trump's trade war.
Not to bring old jobs back to the US, but to rebalance the entire world trade.
• Bessent: Trade talks with China 'will be difficult' The goal is not to decouple the US and Chinese economies. The goal is to rebalance with China, but the question is whether Beijing is ready for that.
• Trump's approval rating has fallen to 42%, the lowest since returning to the White House, - Reuters.
• Trump calls on Erdogan to remain neutral regarding a possible US strike on Iran and to allow the Pentagon access to Syrian airspace.
• Trump will make the Fed a scapegoat for any economic fallout from his trade war, and delegitimize the Fed if it doesn't cut rates - WSJ
• Fed's Harker says US poverty rate may be underestimated - Reuters
• The White House is exploring ways to encourage women to have more children - New York Times. Among the methods under consideration: a $5,000 grant for mothers after each birth, stipends for parents, funding for government programs to educate women about their menstrual cycles so they know when it's best to try to get pregnant, and more. Among the program's sponsors: Vice President J.D. Vance and Elon Musk.
• US government officials sabotage Musk's weekly reports by generating them via ChatGPT and sending obscene language - WP.
Officials were ordered to send 5 new achievements weekly. Some agencies simply send a copy of the same report. Some jokingly began to respond in Russian. One government employee was punished for responding with obscene language.