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Forget It, Bears. It’s China Talks
RiskReversal Recap:
RiskReversal Media & RiskReversal Media
May 12, 2025
MARKET WRAP
Equities were sharply higher after the U.S. and China agreed to temporarily suspend tariffs during weekend negotiations in Switzerland. On the day, SPX +3.3%, QQQ +4% and IWM +3.4%.
The latest de-escalation reduced recession fears and that was clear in the other assets as well. The 10Y yield was up +0.10 and now 4.48%. Gold was lower by -3%, Oil higher, and DXY up sharply and now just below $102. The VIX got crushed and at 18 and change is signaling that the recent market volatility is in the past.
After hours: Fairly quiet on the earnings front. SPY and QQQ are holding their gains from the day in the after hours.
MRKT Call: Peter Boockvar joins to talk the China deal vs his expectations. The effects of tariffs now. The Mag7 trade. Foreign money leaving the SPX (and its effect on the dollar), and more.
RiskReversal Pod: Dan Nathan and Dan Ives, of Wedbush, discuss recent tech market dynamics and reflect on a challenging April, marked by falling markets, rising yields, and tariff impacts.
MRKT MATRIX: TODAY’S TOP STORIES
Dow surges more than 1,100 points after China and U.S. agree to temporary tariff cuts (CNBC)
Treasury Secretary Bessent says he’s likely to meet with China again in ‘next few weeks’ to work on bigger agreement (CNBC)
Expect China to help Trump on fentanyl, TikTok and midterm elections, says Evercore ISI strategist (CNBC)
Traders See Fed Cutting Rates Just Twice in 2025 on Cooling Trade War (Bloomberg)
Trump Wants Medicare to Pay Less Than Foreign Countries for Drugs (Bloomberg)
Rest of Year Isn’t Looking Good for Retail-Property Market (WSJ)
Apple Considers Raising iPhone Prices, Without Blaming Tariffs (WSJ)
Perplexity AI wrapping talks to raise $500 million at $14 billion valuation (CNBC)
SoftBank Stargate Venture With OpenAI Hits Snags on Tariff Fears (Bloomberg)
WHAT’S NEXT?
Stocks surged today after news from U.S.–China trade negotiations, with both countries agreeing to pause retaliatory tariffs for 90 days while talks continue. The agreement was greeted as a significant de-escalation, and even a bit more than what was assumed would result from just a weekend of talks. Questions remain, and there is still uncertainty about how much damage has been done in the past few months, not to mention that we may be settling into a tariff regime that while much less than the early April Rose Garden announcement, is still much higher than it had been before.
Now to the stats on this rally. The S&P 500 is now 20% off the April 8th lows and just 5% below all-time highs. Today’s move reinforces the view from investors (for now) that the worst is behind us as far as the trade war itself. However, structural hurdles remain for equities from here. For instance, the 10Y yield is now back near 4.50 which is saying something and runs directly counter to one of the administrations stated goals, not to mention it further complicates the FOMC’s next moves. The bottom line on the past few weeks is a rally almost completely generated by the administration backing off of its stated goals. In short, policies were introduced, markets gave their take, and those policies were dialed back as a result. Kind of wild, but at the very least the past week has greatly reduced recession fears and some other nightmare scenarios worse than that.
This now leads us into a period of time where we get some sense what has happened since all of the uncertainty. For instance, tomorrow morning is the latest CPI number:
Tuesday, May 13
Earnings Pre-market: JD 7.2%, SE 8%
8:30am - CPI
Earnings After-hours: NU 6.9%
SPX expected Move 0.8%
TODAY’S EPISODES
Watch MRKT Call’s newest episode: Markets Rally On USA-China Trade Announcement
Peter Boockvar joins to talk the China deal vs his expectations. The effects of tariffs now. The Mag7 trade. Foreign money leaving the SPX (and its effect on the dollar), and more. |
Analysis: SPX, US10YY, AMZN, MSFT, AAPL, KWEB, BKX, XLF
Your Questions Answered:
Peter’s thoughts on the banks?
What are you doing with Gold?
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Watch RiskReversal Podcast’s newest episode:
Dan Nathan and Dan Ives, of Wedbush, discuss recent tech market dynamics and reflect on a challenging April, marked by falling markets, rising yields, and tariff impacts. |
They touch on topics like major tech earnings, AI developments, and enterprise spending trends. Ives highlights the importance of survey data in technology research and shares insights into companies like Microsoft, Amazon, Apple, and Google. The conversation also covers the future of AI-driven revenue, autonomous vehicles, and the importance of Apple's strategic decisions in the evolving tech landscape.
Timecodes
0:00 - 28 Days Later
6:35 - MSFT
12:30 - PLTR
27:30 - AMZN
30:40 - META
32:10 - PINS & SNAP
37:20 - AAPL
50:45 - GOOGL
53:25 - TSLA
