MARKET WRAP

Stocks began Wednesday with a rip higher on optimism around easing U.S.-China trade tensions and relief over no plans to oust Fed Chair Jerome Powell. However, the rally lost some steam later in the day as some of that optimism was watered down by more caveats. For the day: SPX + 1.7%, QQQ +2.3% and IWM +1.7%.

Some obvious and not so obvious moves elsewhere. Gold pulled back rather sharply (-3%) from what had been a parabolic move higher of late. DXY was higher, now back near 100. However, the 10Y yield was only down slightly. After hours Chipotle (CMG) missed and cited a slowdown in consumer spending. Something to watch for in other earnings reports.

• RiskReversal Pod: Danielle DiMartino Booth on the complex dynamics of the 10Y yield, rising bankruptcy rates and shifting trends in the bond and gold markets

• MRKT Call: A look at today’s rally and the news-cycle over the past 24 hours including Powell, China, shipping rates, and US trade already falling. Coverage of TSLA’s rally on their earnings miss. 

MRKT MATRIX: April 23, 2025

Today’s Top Stories:

• The Dow is up 400 points as most of Wednesday’s big rally evaporates into the close (CNBC)

• Trump U-Turns on Powell, China Follow Dire Economic Warnings (Bloomberg)

• Retail Traders See Epic Buying Opportunity in S&P’s Wild Swings (Bloomberg)

• Credit-Card Companies Brace for a Downturn (WSJ)

• Musk to Refocus on Tesla After Its Worst Quarter in Years (Bloomberg)

• Tesla gets a slew of price target cuts after big earnings miss (CNBC)

• Intel to Announce Plans This Week to Cut Over 20% of Staff (Bloomberg)

• Several Wall Street shops trim their Apple price targets ahead of earnings next week (CNBC)

• Apple, Meta Hit by Modest EU Tech Fines After Trump Threats (Bloomberg)

Today’s MRKT Call is Presented by CME Group

Stocks Surge As Trump Backtracks on Powell, China

A look at today’s rally and the news-cycle over the past 24 hours including Powell, China, shipping rates, and US trade already falling. Coverage of TSLA’s rally on their earnings miss. 

• John Butters’ Earnings Insight: S&P net profit margins

• Chart of the Day: Crude Oil

• Analysis: VIX, SPX, AMZN, BX, APO, NFLX, Gold, DXY, US10Y, TLT, WMT, ARKK, META, 

• Your Questions Answered: 

  • Is there a point where the NFLX trade is too crowded?

  • Newmont into earnings?

  • Is this still a “sell all rallies” market?

  • Is there a correlation between Gold and the dollar always, now?

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Today’s RiskReversal Podcast is Presented by Betterment and iConnections

The Fed's Impossible Dilemma: Why Central Banks Are Panicking

Guy is joined by Danielle DiMartino Booth, CEO and Chief Strategist at QI Research, joins to discuss Federal Reserve policies and their impacts on the U.S. economy. The conversation starts with the current political tension surrounding Fed Chairman Jerome Powell and the administration's frustrations with him. Danielle highlights her disappointment with the Fed's handling of the economy, citing missed revenue targets as an indicator of pre-existing economic stress before the ongoing trade war. The discussion explores the inefficacy of tariffs, the complex dynamics of ten-year yields, and the significant issues of rising bankruptcy rates. Danielle also touches on the shifting trends in the bond and gold markets, the currency exchange rate crisis, and the increasing importance of liquidity in financial markets. With a call for stronger leadership and a critique of current economic policies, this episode offers a thorough analysis of the broader economic landscape and the challenges facing the Federal Reserve.

Timecodes

• 0:00 - The Fed's Dilemma

• 14:40 - Gold Rush

• 17:15 - Credit & Currency Concerns

• 23:15 - Final Thoughts

What’s Next?

Today continued the trend of two-way intraday volatility. As mentioned yesterday, and even with a strong rally today that pushed SPX as high as 5460 early on — we’re still holding inside the expected move range that options were pricing to start the week: 5100 to 5400, levels that have now been tested to the upside and downside 5 times since the April 9th announcement of a 90 day reprieve on tariffs.

For now this all still looks like trader-driven movement in an environment of elevated volatility, not a clear directional breakout… yet. This back-and-forth within recently well-defined levels offers continued opportunities to add to longs or trim risk at the extremes (about a 7% range) until a breakout of breakdown is confirmed. 

For the rest of the week, SPX options are pricing about a 2% range.

Alphabet (GOOGL) reports tomorrow with options pricing just shy of a 6% move. 

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