MARKET WRAP

A solid rally today that helped erase yesterday’s losses, leaving the market roughly flat for the week thus far. Sentiment took a sharp turn lower yesterday — and in a pattern we've seen play out over the past couple of weeks, comments from the administration meant to lift animal spirits, this one suggesting that the trade war with China can't drag on forever. On the day, SPX +2.5%, QQQ +2.6% and IWM 2.7%. Fairly quiet elsewhere with the 10Y yield basically flat. Gold ticked down slightly while oil gained 1.8%. DXY was higher, but not enough to make up for yesterday’s decline.

After hours we got Tesla’s numbers: Earnings per share: 27 cents adjusted vs. 39 cents est. Revenue: $19.34 billion vs. $21.11 billion est. (Lowest quarterly revenue since Q3 2021) The stock isn’t moving much on the news so far. Conference call to come.

• RiskReversal Pod: Gene Munster joins to talk Tesla and the impact of AI on Google's business model. Also, Nvidia's challenges due to export bans, and more.

• MRKT Call: Recent SPX moves in an elevated vol environment. IMF slashing growth expectations. An update on a potentially oversold dollar, and a longterm view. TSLA talk and your questions answered.

MRKT MATRIX: April 22, 2025

Today’s Top Stories:

• Dow jumps 1,000 points on hopes for trade fight de-escalation (CNBC)

• Bessent Expects Tariff Standoff With China to De-Escalate (Bloomberg)

• Strategist Who Called End of US Exceptionalism Sees No Recovery (Bloomberg)

• Trump Is Laying the Groundwork to Blame Powell for Any Downturn (WSJ)

• Trump hosts Walmart, Target and Home Depot CEOs for tariff meeting (CNBC)

• Meta could take a $7 billion hit this year because of Trump’s tough China tariffs (CNBC)

• Amazon has halted some data center leasing talks, Wells Fargo analysts say (Reuters)

Today’s MRKT Call is Presented by FactSet

Stocks Rise Ahead of Tesla Earnings

Checking out recent SPX moves in an elevated vol environment amidst a very steep downtrend. IMF slashing growth expectations. An update on a potentially oversold dollar, but with a longterm view. And a TSLA earnings preview.

• Chart of the Day: DXY oversold?

• Analysis: SPX, UUP, MCD, TGT, UNH, TSLA, LVS, RTX, NVO, DXY

• Your questions answered:

  • Thoughts on MCD here?

  • Thoughts on UNH, stupid oversold?

  • Can you cover NVO? It’s down 60% but still a market leader.

  • Any views on TSM since the Huawei chip announcement?

  • Thoughts on the casino names? LVS hammered, China and Macau?

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Today’s RiskReversal Podcast is Presented by Current and RBC

It's Going to be Ugly for Tesla in 2025, says Long-Term Bull Gene Munster

Dan Nathan hosts Gene Munster, Managing Partner at Deepwater Asset Management, on the Risk Reversal Podcast. They discuss the frustrating state of the stock market, focusing on issues such as tariffs, trade wars, and economic fundamentals. Gene shares a personal anecdote about market prediction challenges and reflects on the economic outlook amid geopolitical tensions. They delve into the performance of major stocks, including Tesla and Google, and explore the impact of AI and search technologies on Google's business model. The episode also touches on Nvidia's challenges due to export bans and the pressure on tech stocks. Dan and Gene provide an in-depth analysis of market conditions and future projections, emphasizing the importance of both short-term awareness and long-term optimism.

Timecodes

• 0:00 - Tech Reaction

• 8:00 - What's Different?

• 17:45 - Tesla Earnings Preview

• 23:45 - Google Earnings Preview

• 29:45 - Nvidia Update

What’s Next?

We’ve seen a ton of two way intraday volatility for the first two days of the week. But even with the ups and downs, it's still staying inside the expected move range that options were pricing — between 5100 and 5400. We’ve tagged the bottom (5100) of that range and made a solid run up to 5310, but so far nothing outside what the options market had been pricing. While movement has been swift at times intraday, particularly around tariff headlines, it’s seems like it’s still simply trader driven swings at elevated volatility for now. In other words, no major shift in directional conviction just yet. So yeah, somewhat volatile, but so far no surprises or much to read into.

In fact the past week and a half or so has somewhat of a short term technical trader’s dream, with large swings day to day so far reversing at recent support and resistance. If you’re active, it makes sense to use those swings to your advantage and be patient until those range extremes are tested to either add to longs or lighten up on recent buys. If trading options, with the VIX still above 30, some credit spreads sold outside the range when those extremes are tested has been a good way to add income / or shift deltas. 

The rest of the week’s economic data/events:

• Wednesday:

  • 9am - Fed Goolsbee Speech

  • 9:45am - S&P Global PMIs

  • 10am - New Home Sales

  • 2pm - Fed Beige Book

• Thursday:

  • 8:30am - Durable Goods

  • 8:30am - Initial Jobless Claims

  • 10am - Existing Home Sales

• Friday:

  • 10am - Consumer Sentiment

And Earnings with Updated Expected Moves:

• Wednesday

  • Premarket: BA 5.4%, T 4.5%

  • After hours: IBM 6.8%, NOW 7.6%, CMG 7.6%, TXN 5.6%

• Thursday

  • Premarket: AAL 7.5%, FCX 4.9%, LUV 6.9%, MRK 4.9%, PEP 3%

  • After Hours: GOOGL 6%, INTC 8.5%, TMUS 4.6%

• Friday

  • Premarket: SLB 4.4%, ABBV 4.5%
    
    

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