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 Warm-Up
- Must be the weekend - New Tariffs imposed
- Someone wants the Fed Chair job
- TACO FAFO and more...
- More muddy AI cover art

Markets
- YUGE move for markets
- Tariffs reinstated by Appeals court - for now
- Hope for a spending bill - SPENDING BILLS
- Retailers still worried - apparel stores not happy

More tariffs
- President Donald Trump told U.S. steelworkers on Friday that he will double tariffs on steel imports to 50%.
- “We’re going to bring it from 25% to 50%, the tariffs on steel into the United States of America,” Trump said during remarks at U.S. Steel’s Irvin Works in West Mifflin, Pennsylvania. The president said the steep tariffs would “further secure the steel industry.”
- “At 25%, they can sort of get over that fence,” Trump said. “At 50%, they can no longer get over the fence.”
- Shares of mining company Cleveland-Cliffs popped roughly 22% following the announcement, while Steel Dynamics jumped more than 13% and Nucor was up more than 12%

Tariffs
- Court Strikes them down - something we discussed a bit on the legality of tariffs in the way they were impose to begin with
- Appeals court reinstates temporarily
- Did you see Howard Lutnik? Like putty in Trump hands, saying how Trump will win, he always wins, he is such a winner, no one can negotiate like Trump - on and one in a press conference.

Economic Downtick
- The U.S. growth outlook was downwardly revised to just 1.6% this year and 1.5% in 2026. In March, the OECD was still expecting a 2.2% expansion in 2025.
- “Global GDP growth is projected to slow from 3.3% in 2024 to 2.9% this year and in 2026 ... on the technical assumption that tariff rates as of mid-May are sustained despite ongoing legal challenges,” the OECD said.
- It had previously forecast global growth of 3.1% this year and 3% in 2026

Big Month
- NASDAQ up 9.6% for May
- S&P 500 up 6%
- Some calling it a Bear Market Bounce
- Valuations getting toward top end again
- Breath is poor again - BIG Names pulling most up
- Tech was big driver in May
- Best month for S&P 500 since November 2023

Someone Looking to Be Appointed
- Kevin Warsh (Brown Nose Warsh) Says Fed Officials Shouldn’t Be ‘Pampered Princes,’ Defends Trump’s Criticism of the Bank
- Leading name for the next Fed Chair
- defended the president’s right to criticize the central bank, saying the Fed is too big and politically exposed.
--- He is showing how political it can be with this kind of populist view

Inflation Report
- PCE moved to 2.1% on April (lower than expected)
- Core inflation also was at 0.1% for the month though it was higher on an annual level at 2.5%.
- Consumer spending, though, slowed sharply for the month, posting just a 0.2% increase.
- The savings rate surged to 4.9%, the highest in nearly a year.
- Food prices fell 0.3% on the month while energy goods and services increased 0.5%. Shelter costs, which has been one of the most stubborn inflation components, increased 0.4%.
-- Put all of that together - consumers are pulling back

New and Old Acronyms making waves
- MEGA (Make Europe Great Again)
- MAGA (Make America Go Away)
- TACO (Trump Always Chickens Out)
- FAFO (Fuck Around and Find Out)
----It is used to capture the financial market's volatility and chaos that Trump's policymaking process has created

Dell Earnings
- Dell Technologies reported fiscal first-quarter earnings that missed Wall Street expectations, but the company beat on revenue and offered a stronger-than-expected forecast for the current quarter.
- Dell said it expects $2.25 in adjusted earnings per share for the current quarter, with between $28.5 billion and $29.5 billion in revenue. That was significantly higher than LSEG expectations.
- Seemingly strong results, but earning missed and revenue came in in-line. Investors not impressed after absorbing the info.

HP Earnings
- Headline: HP sinks 15% as company misses on earnings, guidance due to ‘added cost’ from tariffs
- HP reported better-than-expected revenue on Wednesday, but the company missed on earnings and issued disappointing guidance.
- The company said its outlook “reflects the added cost driven by the current U.S. tariffs,” as well as the associated mitigations.
- HP CEO Enrique Lores said that the company has increased production in Vietnam, Thailand, India, Mexico and the U.S.
- Earnings per share: 71 cents adjusted vs. 80 cents expected
- - - “Through our actions, we expect to fully mitigate the increased trade-related costs by Q4,” Lores said--- BUT WAIT!
- Revenue: $13.22 billion vs. $13.14 billion expected

NVDA Earnings
-  Nvidia reported better-than-expected earnings and revenue on Wednesday, as the company’s booming data center business recorded year-over-year growth above 73%.
- The stock rose about 6% in extended trading.
- Overall revenue grew 69% during the quarter, and sales in the company’s data center division, which includes AI chips and related parts, grew 73%.
-  Earnings per share: 96 cents adjusted vs. 93 cents expected
- Revenue: $44.06 billion vs. $43.31 billion expected
- Nvidia said its gross margin of 61% for the quarter would have been 71.3% if not for the China-related charge.

Gap Earnings
- Headline: Gap shares plummet as retailer says tariffs could cost between $100 million and $150 million
- Tariffs could cost the company between $250 million and $300 million, it said, but with mitigation efforts it expects the cost to be between $100 million and $150 million."
- Gap said it’s already mitigated about half of those costs and without further action, the cost is expected to be between $100 million and $150 million, which will likely show up on the balance sheet in the back half of the year. The company said it’s going to build on its mitigation efforts by continuing to diversify its supply chain and reducing its exposure to China.
- Shares down hard on this
- question: What i they diversify to some other country that comes under fire?
--- These brands have a target on their head - margins big concern (even if they manufacture all here in USA)

META Moving Up
- Facebook parent Meta Platforms (META) believes its artificial intelligence tools could soon fully automate the process of creating advertising campaigns, according to a Wall Street Journal report. The news was viewed as positive for Meta stock but could be bad news for some major advertising firms.
- Meta aims to offer a tool that "enable brands to fully create and target ads using artificial intelligence by the end of next year,"
- "Over the long-term, advertisers will basically just be able to tell us a business objective and a budget and we're going to go do the rest for them,"
---- How is this different from a n ad agency - META will do it better? Capture the best advertisement for eyeballs and cheaper - is that the plan?
--- Don't the advertisers want a wall between the ad agency and the media it is played on.
==== Lots of questions, but investors seem to like the idea of a one stop shop

ELON
- Ketamine haze - did you see the clips from when he was saying goodbye in Oval office
- And how he was gazing up looking how cool the gold eagle was on the ceiling of the oval office
- Eyes rolling, head swaying
==== Reports out Monday about sales of Tesla in Europe - very poor (so Elon back on the Robotaxi promise again to hang the carrot out there)

South Korea
- South Korea’s central bank expectedly cuts its policy interest rate by 25 basis points to 2.5%.
- That marked the central bank’s fourth cut in the current easing cycle.
- The central bank slashes GDP forecast, plans more rate cuts ahead. |- The BOK monetary policy board attributed the rate cut decision to its expectations that economic growth will “decline considerably” while inflation remains “broadly stable,” according to its statement. (When have you heard that level of dire outlook from a central bank?)

New Clear Energy Deals
- Meta has signed a 20-year agreement to buy nuclear power from Constellation Energy.
- Beginning in 2027, the tech giant will purchase about 1.1 gigawatts of power from Constellation’s Clinton Clean Energy Center in Illinois. Without  -Meta’s backing, the plant was in danger of premature closure.
- Tech companies, including Amazon, Google and Meta, signed a pledge in March led by the World Nuclear Association calling for nuclear energy worldwide to triple by 2050.

 

 

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