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The SPX Win Streak Ends at Nine. Palantir Beats, Stock Retreats.
RiskReversal Recap: May 5, 2025
RiskReversal Media & RiskReversal Media
May 05, 2025
MARKET WRAP
Stocks opened lower but tried to rally through the session, with the S&P 500 briefly flirting with what would have been its 10th consecutive green close. However, late-day selling pressure took hold, and the index slipped into the red, closing down 0.5%, essentially where we opened. On the day: SPX -0.6%, QQQ -0.7% and IWM -0.8%. The 10Y yield ticked higher again, now 4.34%. Oil’s decline continues, now $57 and round-tripping its entire move since the April 9th spike. The dollar was down slightly and remains volatile.
After hours: Palantir (PLTR) beat and raised guidance but the stock is down about -7% after hours. It had a huge run higher into the number. Ford (F) beat but isn’t issuing guidance. The stock lower by about -2%.
MRKT Call: Discussing the rally and what the news cycle would have to look like for it to get back near the highs.
RiskReversal Pod: Guy and Dan dive into Warren Buffet's increasing cash reserves and market sentiment amidst geopolitical uncertainties.
MRKT MATRIX: TODAY’S TOP STORIES
S&P 500 slides for first time in 10 days as investors await details on trade deals (CNBC)
Trump Suggests Some Trade Deals May Come as Soon as This Week (Bloomberg)
Netflix, Disney Shares Slip on Tariff Plans For Foreign Films (Bloomberg)
OPEC+ Supply Hike Forces Wall Street to Redo Sums, Yet Again (Bloomberg)
Short Sellers Bet Against Private Credit Lenders (Bloomberg)
Corporate America Is Leaving More Jobs Unfilled (WSJ)
Warren Buffett to remain Berkshire Hathaway chairman, Greg Abel to become CEO at year-end, board votes (CNBC)
OpenAI says nonprofit will retain control of company, bowing to outside pressure (CNBC)
US lawmaker targets Nvidia chip smuggling to China with new bill (Reuters)
Tariffs Threaten Semiconductor Supply Chains, Chip-Equipment Maker Warns (WSJ)
Satellite images reveal Huawei’s advanced chip production line in China (Financial Times)
Apple Plans iPhone Release Schedule Shakeup, New Styles (The Information)
WHAT’S NEXT?
In recent notes, we highlighted that traders weren’t pricing in much near-term volatility considering what we experienced in April—and that still holds, particularly through the next day or so. While the FOMC rate decision on Wednesday could introduce some movement, expectations for a sharp break in either direction have cooled considerably on this rally. That aligns with the current options landscape, where the market is sitting in a zone of positive gamma. After moving through much more volatile, negative gamma territory during the recent selloff and subsequent "V" reversal, we’re in a zone that favors near term stability.
This setup suggests that sharp downside reversals or explosive upside rallies are less likely in the near term. A tariff-related headline could shake things up, but absent that, any move higher is likely to be slow and steady—a grind rather than a hockey stick. On the downside, dip-buyers are likely to step in on minor pullbacks, at least until the S&P is several hundred points below current levels. For now, the path of least resistance appears more muted than dramatic as long as the SPX is 5500 or above. Below that selling could pick up steam. To the upside, we’re likely looking at a grind should the news cycle not drop an extremely bullish bomb no one saw coming. Dan mentioned a bearish/hedge QQQ options trade on MRKT Call that makes sense from a timing / positioning perspective, buying time rather than fighting what could be a less volatile tape near term.
Tuesday, May 6:
Econ Data:
Tomorrow we see some inflation data out of Europe as well as some words from their central bankers. It’s a fairly quiet day in the US.
Earnings
Pre-market: CELH 12%, DDOG 11%
After Hours: SMCI 10%, AMD 8%, RIVN 11%, WYNN 5.5%, ANET 9%
TODAY’S EPISODES
Watch MRKT Call’s newest episode: S&P Posts Longest Winning Streak in 20 Years, Now What?
Discussing the historical run of green days for the SPX and what the news cycle would have to look like for the rally to get back near the highs. |
Analysis - SPX, F, TLT, US10YY, VIX, NDX, SPOT, TSLA, Crude oil,
Trade Ideas: QQQ June Put Spread
Earnings Previews: PLTR, UBER
Your Questions Answered:
Are we in a VIX crush environment?
Do you put any weight on Buffett saying “the opportunity to deploy cash will come in the next 5 years?”
Learn more about our sponsor, MoneyLion.
Watch RiskReversal Podcast’s newest episode: Warren Buffet's Massive Cash Pile, Retirement & What It Signals For Investors
Guy and Dan dive into Warren Buffet's increasing cash reserves and broader market sentiment amidst geopolitical uncertainties. |
A preview of the upcoming Federal Reserve meetings, and the lingering effects of trade tensions with China. They highlight key economic indicators, such as the strength of the U.S. dollar, crude oil prices, and job numbers. The discussion also covers significant earnings reports for the week, including Apple, Palantir, Disney, Uber, and Novo Nordisk. The episode also touches on Warren Buffet's increasing cash reserves and broader market sentiment amidst geopolitical uncertainties.
