Markets Stall as Ukraine Talks Yield Nothing Substantive; President's Spending Bill Reconsidered in House; Home Depot Rises on Earnings Miss

Stocks took the path of least resistance on Monday, rising slightly in a dull, pointless session.

There was little excitement over President Trump's two-hour phone call with Russia's President Putin, even though both participants expressed positive sentiments. The fact of the matter is that neither of the three-sided coin that is the U.S., Russia, and the Ukraine have flipped their positions.

Russia maintains its positions from 2024, insisting negotiations focus on root causes, adding that the four partially-captured regions belong to Russia along with Crimea.

Contacted after the Trump-Putin call, Ukraine's de facto leader, Zelenskyy, reiterated that the besieged country would not cede territory to Russia.

For its part, the U.S. continues to fund Ukraine, deliver arms and provide intelligence.

Despite the happy talk, nothing has been accomplished in a series of false starts. No side seems capable of making concessions, which is perfectly understandable from the Russian angle, since they are winning the war on the ground. The conflict will likely continue until Russia accomplishes its well-defined goals and takes the four oblasts that are officially part of Russia, secures the Crimean peninsula and ousts Kiev's leadership.

Even though there seems to be a concerted effort toward a non-military solution, nothing of substance is being achieved. Russia has likely prepared a summer offensive, holding off presently until all sides retreat from negotiations. The war will continue as it serves all involved - plus most of Europe - politically.

To Wall Street, Ukraine is a back-burner issue. Developments have little, if any, impact.

In the Senate, the GENIUS Act, regulating stablecoins, has moved out of committee and towards a cloture vote by the full Senate. It would need a 60-vote majority to go to the floor for final passage. At this point, amendments can be considered. Being hailed as a necessary step to safeguard users of stablecoins (pegged to the U.S. dollar), there isn't much meat on the bones of the bill.

Essentially, stablecoin issuers will also be held to bank-like standards regarding anti money-laundering requirements, sanctions compliance, and requirements under the Bank Secrecy Act, so, nothing really new, other than the usual grandstanding by both parties, acting like the bill is necessary. Mostly, it allows congress to erect another means of moving money and another shield against scrutiny by the public in its endless looting of U.S. taxpayers.

Now that stocks have recovered all of the losses from the tariff trauma, the next leg higher figures to face some difficulty. It should be noted that all of the major indices had backed off from previous highs prior to April 2nd's tariff announcement. Trump has been and will be used by the press as a scapegoat for any further market declines, should any occur. Since it's the business of Wall Street to continue moving stock prices higher, there may not be the need for any excuses.

Case in point is this morning's earnings release from Home Depot (HD). The home-improvement retailer reported higher revenue - up 9.4% year over year. However, earnings per share declined nearly five percent to $3.45, missing the $3.59 estimate. Those results imply an unhealthy margin squeeze, taking in more money but producing less profit.

Pre-market, shares of Home Depot are rising, up more than two percent, proving, yet again, nothing matters in this market other than perception and the ability of big money to dominate trading. Ring-a-ding-ding.

With little else to base trading upon, expect some flattening out in Tuesday's session, possibly even losses. The 10-year treasury note yielded more than 4.5% for a brief period on Monday. As soon as it was tamped down below that level - around noon - stocks began to churn a little higher. Markets are stalled out until something breaks in one direction or the other. Algorithmic trading relying on headlines needs something more than the usual status quo to make headway.

An hour before the opening bell, futures are relatively flat. Dow futures are -17; S&P futures are -14; NASDAQ futures, -83.

Gold is moving higher, having found a base around $3,200. Silver is reacting as well, at $32.75 on the COMEX. WTI crude oil is holding steady at $62 per barrel, a level unlikely to hold for long as OPEC heads for production ramps in June.

U.S. government debt continues to grow unabated as the House attempts to move forward with the President's outline for fiscal 2026 spending plans, which include an estimated $1.5 trillion deficit. Nothing has changed except a few of the players; more noise-making from Capitol Hill forthcoming.

At the Close, Monday, May 19, 2025:
Dow: 42,792.07, +137.33 (+0.32%)
NASDAQ: 19,215.46, +4.36 (+0.02%)
S&P 500: 5,963.60, +5.22 (+0.09%)
NYSE Composite: 19,975.09, +41.03 (+0.21%)

WEEKEND WRAP: Stocks Explode Higher; Gold Continues Decline; Treasury Market Stressed on Moody's Downgrade; Bitcoin Stalls

Owning stocks over the past few months proved that it pays not to panic. Major averages are back to about even for the year after torrid trading to the upside in four of the last six weeks. Shorts have been, as it's said, carried out on stretchers, the negative point of view replaced by giddy acceptance of the new narrative inspired by President Trump and his deal-making travels throughout the Middle East.

Who knew reshaping the nature of global commerce could be accomplished in less than six months?

Stocks

The gains on major indices were outlandish, especially on the NASDAQ (+7.15%), outdone by the Dow Transports, which were up 1119.01 (+7.97%) on the week. Over the past month, stocks have moved from well below their 50 and 200-day moving averages to just above them on the Dow, S&P, NASDAQ, and NYSE Composite. Only the moribund Dow Transports are still slumping, but, if this week signaled that investors simply will not tolerate bear markets for more than a few weeks, then expect the transportation sector to continue rallying.

At the current pace, stocks should be challenging all-time highs within weeks. At least, that's how it appears to be going. Only congress (not to mention the horde of activist federal judges), in its own sad manner, seems capable of derailing the Trump agenda for a "golden age." The House Budget Committee failed to move Trump's preferred "big, beautiful bill" to a full vote, with five Republicans joining all 16 Democrats on the committee, defeating it in a 21-16 defeat for the MAGA crowd.

The bill has more than its share of lumps, from outsized budgetary funding for defense to cuts in social programs. It's far less than perfect and will need tweaking and probably some arm-twisting. Congress seems capable of and perfectly happy to keep with its habit of overspending and working with continuing resolutions rather than passing an actual budget. If anything can torpedo positive momentum on Wall Street, congress is surely equal to the task.

Otherwise, it's not just Trump making deals. The big news this week was Dick's Sporting Goods acquiring Foot Locker, the deal expected to close in the second half. The merger agreement was unanimously approved by the boards of directors of both companies. Foot Locker shareholders can opt for either $24 in cash or 0.1168 shares of Dick’s common stock for each share of Foot Locker common stock, the companies said in a statement.

The stream of first quarter earnings has become but a trikle, with Home Depot, Lowe's and Target the major companies reporting this week. Here's the rundown:

Monday: (before open) Ryanair (RYAAY), Compugen (CGEN); (after close) Trip.com (TCOM)

Tuesday: (before open) Viking Cruise Lines (VIK), Home Depot (BD); (after close) Palo Alto (PANW), Viasat (VSAT), Toll Brothers (TOL)

Wednesday: (before open) Baidu (BIDU), Medtronic (MDT), Lowe's (LOW), Target (TGT); (after close) Urban Outfitters (URBN), American Superconductor (AMSC)

Thursday: (before open) Advance Auto Parts (AAP), BJ's Wholesale (BJ), Analog Devices (ADI), Ralph Lauren (RL), TD Bank (TD), Williams-Sonoma (WSM); (after close) Autodesk (ADSK), Workday (WDAY), Ross Stores (ROST), Lionsgate (LION), Intuit (INTU), Deckers (DECK).

Data is on the light side this coming week, with April new and existing home sales likely to be the most impactful release.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
04/11/2025	4.37	4.35	4.38	4.34	4.35	4.21	4.04
04/17/2025	4.36	4.35	4.38	4.34	4.35	4.22	3.99
04/25/2025	4.34	4.37	4.36	4.32	4.32	4.22	3.95
05/02/2025	4.38	4.36	4.34	4.33	4.41	4.26	4.00
05/09/2025	4.37	4.36	4.34	4.34	4.40	4.28	4.05
05/16/2025	4.37	4.36	4.34	4.37	4.42	4.30	4.13

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
04/11/2025	3.96	3.98	4.15	4.32	4.48	4.91	4.85
04/17/2025	3.81	3.82	3.95	4.13	4.34	4.82	4.80
04/25/2025	3.74	3.76	3.88	4.06	4.29	4.75	4.74
05/02/2025	3.83	3.82	3.92	4.11	4.33	4.81	4.79
05/09/2025	3.88	3.85	4.00	4.18	4.37	4.86	4.83
05/16/2025	3.98	3.95	4.06	4.24	4.43	4.92	4.89

Spreads remained high, with full spectrum reaching an unprecedented level of +52 while 2s-10s remained elevated at +45. There's still stress in the system, manifested by the rising 10-year note yield, the highest in five weeks and daringly close to the "make or break" level at 4.50%. Likewise, the 30-year note yielding close to five percent indicates the rather obvious preference of risk assets (stocks) over treasuries and other fixed-income instruments.

Animal spirits have been once again released from cages on Wall Street, the speculative fury for stocks pressuring the bond market. In the current atmosphere, rate cuts might be more wishful thinking than anything else.

Adding to pressure on long-dated maturities was Friday's U.S. debt downgrade from AAA to AA1 by Moody's, joining Standard & Poor’s, which downgraded the U.S. to AA+ from AAA in August, 2011, and Fitch Ratings, which cut the U.S. rating to AA+ from AAA, in August, 2023.

If it was even possible, the treasury yield curve continued to flatten, with a complete spread of just 0.94% between the low (3-year, 3.95) to the high (30-year, 4.89%). Should the U.S. federal government continue running massive deficits, as opposed to showing ANY fiscal restraint, rates will continue to rise as investors take flight from the supposed "risk-free" trade in U.S. treasuries.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5
12/13: +15
12/20: +22
12/27: +31
1/3: +32
1/10: +37
1/17: +34
1/24: +36
1/31: +36
2/7: +20
2/14: +21
2/21: +23
2/28: +25
3/7: +33
3/14: +29
3/21: +31
3/28: +38
4/4: +33
4/11: +52
4/17: +53
4/25: +55
5/2: +50
5/9: +49
5/16: +45

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23
12/13: +18
12/20: +29
12/27: +38
1/3: +38
1/10: +54
1/17: +41
1/24: +40
1/31: +36
2/7: +32
2/14: +32
2/21: +31
2/28: +13
3/7: +24
3/14: +25
3/21: +23
3/28: +26
4/4: +5
4/11: +38
4/17: +44
4/25: +40
5/2: +41
5/9: +46
5/16: +52

Oil/Gas

WTI crude oil closed out the week in New York trading at a price of $62.49, versus last Friday's 61.06. Two weeks ago the closing price was $58.38, which was the lowest level since February, 2021. Oil's gain on the week appears to stem from an oversold condition. Oil futures are in backwardation, the forward price of the futures contract is lower than the spot price, implying high inventory levels. With production increases by OPEC+ about to take effect in June, future prices are understandingly lower through January, 2026, bottoming out at $59.99.

Futures prices are reflecting what global markets are currently broadcasting: no global recession, no supply chain chaos, low inflation, happy talk all around. The "good times" narrative has taken hold of most markets.

Gas prices simply refuse to come down. Retailers apparently respond immediately to gains in the price of oil, slowly to declines, as the lows from two weeks ago barely registered. The national average was $3.12. Demand being inelastic, oil companies and retailers rely on a mobile consumer for profits.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.17, up seven cents from last week.

The high price remained the province of California at $4.88, up seven cents on the week. Mississippi retained the low spot at $2.65. The only other state reporting a fuel price under $2.70 is Tennessee ($2.68). Louisiana is right at $2.70, followed by South Carolina ($2.73) and Alabama ($2.74). In Oklahoma, the price is $2.78. Texas, $2.79; Arkansas, $2.80. Florida's foray below $3.00 lasted less than a week. It's currently $3.02.

The Northeast continues to be led by Pennsylvania ($3.29). New England and East coast states all range between $2.88 (New Hampshire) and $3.10 (Maryland). Prices are overall slightly higher than last week.

Midwest states are led by Illinois ($3.36), the price a nickel lower than last week. Kansas ($2.83) is the lowest, followed by Kentucky ($2.88) and Missouri ($2.91) Indiana drivers are paying $3.19, a substantial increase from last week's $3.07. Similarly, Michigan's prices rose from $3.05 last week to $3.18 currently.

Along with California, Washington is the only state above $4.00, higher, at at $4.31. Oregon ($3.91) and Nevada ($3.89) are seeing higher prices this week as well. Arizona appeared headed for sub-$3.00, down to $3.26 last week, bouncing back up to $3.40. Neighboring New Mexico is a relative bargain at $2.92, though that's 14 cents higher than last week. Idaho and neighboring Utah were the most stable, at $3.24 and $3.25, respectively.

Sub-$3.00 gas is found in fewer states this week than last, with just 21 hitting the mark. Prospects of lower gas prices for American drivers seem to be fading along with fear of recession.

Bitcoin

This week: $103,888.10
Last week: $104,416.70
2 weeks ago: $95,497.28
6 months ago: $91,546.89
One year ago: $66,680.90
Five years ago: $9,177.64

Bitcoin has stalled out in a range of $102,000 to $104,000, possibly reflecting the holdup in the U.S. Senate of the GENIUS act, which failed to break out of committee two weeks ago. There is supposedly a cloture vote upcoming, possibly as early as Monday, according to sources close to Senate majority leader John Thune. The bill, sponsored by Tennessee Senator Bill Haggerty, who probably knows more about gambling than crypto-currencies, provides "safeguards" for consumers (AKA: more furious fleecing).

Senators Kirsten Gillebrand (NY) and Cynthia Lummis (WY) are also vocal supporters of the bill. Democrats and a handful of Republicans previously sent the bill to failure over concerns of conflicts of interest and insider dealing, a topic upon which most legislators on Capitol Hill are intimately familiar. The humor is not lost on cynics over the name "GENIUS" in the bill, as Senate IQs are generally well below what would be considered higher intellectual levels.

The usual talk about bitcoin breaking further upwards towards $200,000 and beyond has been tamped down as regulations on what was originally hailed as "new money" or "21st century gold" move bitcoin and all the other garbage in the crypto-universe closer to the mainstream. Wall Street loves it, which is, in itself, a good reason to dis-engage from speculation on imaginary digital currencies.

Precious Metals

Gold:Silver Ratio: 98.84; last week: 101.25

Per COMEX continuous contracts:

Gold price 4/20: $3,341.30
Gold price 4/27: $3,330.20
Gold price 5/2: $3,247.40
Gold price 5/9: $3,329.10
Gold price 5/16: $3,205.30

Silver price 4/20: $32.54
Silver price 4/27: $33.34
Silver price 5/2: $32.18
Silver price 5/9: $32.88
Silver price 5/16: $32.43

Gold suffered a massive markdown in the futures and at spot. Futures fell by nearly $125 on the week, the result of Wall Street's mood change from bearish behavior to a renewed bullish outlook. If interest rates remain high and the U.S. economy perks up, gold is likely to stagnate if not decline further.

The opposite might be said of silver, which lost just 45 cents on the week, a minuscule decline compared to gold, sending the gold:silver ratio below 100 and towards something more realistic. Because of its properties as an industrial metal as opposed to gold's strictly monetary function, silver might gain as gold declines over coming months.

This is not to say that either metal is overvalued. It's more a perception that the U.S. dollar will regain strength as the Trump agenda begins to be clarified and gradually implemented. It would not be a stretch of imagination to see gold at $3000 and silver at $38.50, implying a GSR in a range of 76-79. While that's still degrees of magnitude higher than historical precedents of 12 to 16, it is worthy of consideration. Silver has been the most undervalued commodity for decades, though re-industrialization on a global level might change the math and the attitude in the futures market. A return of silver as a medium of exchange being highly unlikely, it remains a relatively inexpensive means of storing value.

While there was recently a mini-rush into gold at the retail level, recent price fluctuations may have put the kibosh on projections for $4000 or even $5000 gold over the near term. Central bank buying - or the lack thereof - will tell the true story of where gold's price is headed. Silver seems headed on its own path.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	36.21	43.49	39.77	39.63
1 oz silver bar:	38.00	44.95	40.40	40.00
1 oz gold coin:	3,348.90	3,457.99	3,404.60	3,413.78
1 oz gold bar:	3,335.78	3,410.32	3,367.75	3,368.62

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell sharply through the week, to $39.95, a $1.87 decline from the May 11 price of $41.82 per troy ounce.

WEEKEND WRAP

Seeing is believing, and passive investors will be seeing some healthy gains in their portfolios shortly. Playing along with any narrative du jour is looking like the new normal, good, bad, or otherwise.

At the Close, Friday, May 16, 2025:
Dow: 42,654.74, +331.99 (+0.78%)
NASDAQ: 19,211.10, +98.78 (+0.52%)
S&P 500: 5,958.38, +41.45 (+0.70%)
NYSE Composite: 19,934.06, +149.37 (+0.75%)

For the Week:
Dow: +1,405.36 (+3.41%)
NASDAQ: +1,282.18 (+7.15%)
S&P 500: +298.47 (+5.27%)
NYSE Composite: +614.86 (+3.18%)
Dow Transports: +1119.01 (+7.97%)

Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2025, Downtown Magazine Inc., all rights reserved.

Buy-and-Hold and Buy-the-Dip Have Been Enormously Profitable; May Become Even Better as Trump Upends Global Commerce

Thanks to Monday's massive melt-up, the major indices are on track for a large winner for the week.

As of Thursday's close, the Dow Industrials were ahead by 1,073 points (2.60%). NASDAQ has put on a massive 6.60% gain, up 1,183 points. The S&P 500 is up a more modest 4.54%, or 257. points. The NYSE Composite is up 457 points, lagging the field with a 2.41% gain.

While these indices have, over the past six weeks (since April 2, "Liberation Day"), moved from beneath their 50 and 200-day moving averages to above them, excepting the Dow, which is still in between, they remain off their all-time highs. That shouldn't be a problem for most investors, who are likely more relieved that their 15-25% portfolio losses are now more along the lines of 2-5% lower and at just about break even year-to-date.

Even better, long term investors, especially since the GFC crash that bottomed in March 2009 (coincidentally, right around the time bitcoin became a "thing"), have benefitted from buy-and-hold or buy-the-dip strategies, with passive investors multiples higher off lows on the Dow, NASDAQ, and S&P of roughly 7,200, 1,400, and 750 on the Dow, NASDAQ, and S&P, respectively.

Passive investors who bought the bottom in 2009 up on average eight-fold. A hypothetical $10,000 invested in March 2009 would be worth somewhere in the range of $80,000 today. A person contemplating retirement at 50 years of age in 2009 with 100,000 invested, might have already taken the plunge at 62 (2021), riding the wave through the pandemic scare with a nest egg of around $800,000 today.

Whether or not that's enough to retire on is largely a choice of lifestyle. A 5% annual drawdown of $40,000 a year, or $3,333 per month, certainly would provide more than enough to survive and thrive in the golden years, and that's before adding in Social Security remittances. By comparison, gold is up just more than 80% since the GFC.

It's obvious that the Wall Street casino has made millionaires galore out of the extremely patient cohort of passive investors. Despite the gloom-and doom clanging from goldbugs and non-believers, simply going with the flow has been a winning strategy. Buyers of dips have fared even better.

An argument can be made that lower purchasing power of the US dollar over the years has eroded the value of stock and bond portfolios, but, asset inflation being the forerunner of consumer price inflation, an eight-fold increase in asset value easily more than offsets the rampaging inflation of 2021-2023. Those harmed the most by declining purchasing power are in the lower classes, those who don't own stocks and have not participated in some of the best consecutive years of gains in stocks, ever.

President Trump's promise of an American "golden age" will have to pull the middle and lower classes higher with better, higher-paying jobs in a revitalized U.S. economy. Re-shoring of industries will have to play a large role if Trump's promise is to be realized.

Long story short, America's economy, while somewhat unbalanced, favoring asset allocators over laborers, remains the envy of the world and may become even more dominant in years to come.

An exemplar of the change in attitude concerning America's fortunes can be seen in the recent collapse of the gold price, which is being hammered lower again today, dropping another $60-80, down as low as $3,156 this morning. Despite being up 20% year-to-date, gold has lost nearly half of that gain in just the past week. There was every indication - especially with the gold:silver ratio over 100 - that gold had gotten ahead of itself, the rumors of a new gold-backed BRICS+ currency not withstanding. Trump has countered any BRICS+ aspirations with an unexpected surge of global deal-making and probably never before seen.

Gold may turn in the second half of the year from the best asset to the worst. Silver should benefit from gold's short-term demise with the GSR returning to somewhat more normal levels because of its use as an industrial metal over that of a monetary one. Industrialization on a scale that the Trump approach is promoting will require huge amounts of silver, copper and other raw materials, keeping their prices stable, if not raising them substantially.

In less than four months since his inauguration, President Trump has overturned the tables of global trade and he's only just begun. The next three to four years and beyond may be the most prosperous ever seen in the history of America, which turns 300 year old in just over a year from now.

With markets set to open in minutes, futures are higher. Dow futures: +120; NASDAQ: +40; S&P: +14. Buy and hold is here to stay.

At the Close, Thursday, May 15, 2025:
Dow: 42,322.75, +271.69 (+0.65%)
NASDAQ: 19,112.32, -34.49 (-0.18%)
S&P 500: 5,916.93, +24.35 (+0.41%)
NYSE Composite: 19,784.69, +156.23 (+0.80%)

Deflationary Trends Dominate Data Drop; PPI Checks in a -0.5% MOM, Lowest in 5 Years; Walmart Warns on Revenue Miss

Wednesday produced another split decision on equity markets with the Dow and NYSE Composite lower and the NASDAQ and S&P higher, albeit only slightly.

Traders were possibly waiting on Thursday's pre-market data dump and earnings from Walmart (WMT).

Of the multiple releases at 8:30 am ET, the most stunning was April PPI, which registered a -0.5% month-on-month, the lowest such reading since April 2020, at the onset of the spamdemic.

As Money Daily has been inferring for months, the chorus of cheerleaders for Fed rate cuts are likely going to be singing the wrong tune. Rather than inflation and recession harming the economy, it's dis-inflation or deflation that will emerge as the main threat later this year, if not already in play.

A negative on the PPI and stalled out CPI for April signal that between DOGE efforts in Washington, deportations, tariff trauma, and OPEC+ production cuts, prices for everything from Pop-tarts to retail gasoline are falling, pretty much a natural effect after years of official Washington's mismanagement.

Along with the PPI showing up harshly deflationary, April Retail Sales were flat, rising just 0.1% over the month. If consumers aren't expanding their spending - they're broke, using credit cards to buy food - there's no chance for any inflation, either at the producer level, as pricing power evaporates, or at the consumer point.

Initial jobless claims came in the same as last week, with 229,000 applying for benefits.

The NY Fed Manufacturing Index fell again, to -9.2 from -8.1 last reading. The Philly Fed was wildly improved, at -4, from -26.4 in the prior period.

The market awaits April readings on Industrial Production and Capacity Utilization.

Walmart beat its earnings forecast but missed on revenue in the first quarter for the first time in five years. The company blamed tariffs (which haven't been fully implemented yet) as the cause for the revenue miss.

WTI crude oil is down sharply after the EIA announced a "surprise" inventory build. The price of a barrel of light, sweet crude is hovering around $61 after closing out yesterday in New York at $63.15.

With all the confusion associated with Trump making multiple deals in the Middle East and data showing something along the lines of stag-deflation, stock futures are sharply lower. Dow futures, -142, NASDAQ futures, -102, S&P futures, -21.

At the Close, Wednesday, May 14, 2025:
Dow: 42,051.06, -89.37 (-0.21%)
NASDAQ: 19,146.81, +136.72 (+0.72%)
S&P 500: 5,892.58, +6.03 (+0.10%)
NYSE Composite: 19,628.46, -94.91 (-0.48%)

Stocks Pause After Impressive Three Weeks; Oil's Rise Contrary to Recent Trends; Trump, Tech Titans Making Strides in Middle East

As trading began on Wednesday, the most noticeable change was in gold, sent lower by more than $60 in the hour before the bell ($3,180).

Stocks, after a split decision on Tuesday, opened trading with a marginally positive bias. There was not much for traders to digest heading into the middle of the week. Thursday will be more impactful with earnings releases for Cisco (CSCO) after the close Wednesday and John Deere (DE), Walmart (WMT), Gambling.com (GAMB), Alibaba (BABA), and Birkenstock (BIRK) reporting Thursday morning.

Also on Thursday, April PPI, reports on regional economic activity from the New York and Philadelphia Feds, April capacity utilization, industrial production, retail sales, and the weekly unemployment report of initial and continuing claims.

With President Trump in the Middle East and the highly-anticipated possible/not probable meeting between Russian President Putin and Ukraine proxy Zelensky or their respective representatives in Turkey, even the geo-political scene is on hold for the day.

Stocks are showing a slight negative trend in Europe.

Stocks have put together a fairly impressive rally over the past three weeks, erasing year-to-date losses on all the major indices. The NASDAQ has gained massively, up 20% since April 21. With Trump and his entourage of tech moguls hobnobbing in Saudi Arabia, Mag7 and chip stocks have been moving higher.

Wednesday offers a solid opportunity for traders to stake out new positions at somewhat lower prices. Sector rotation has developed out of defensives into more speculative stocks. Coinbase (COIN), after the Tuesday announcement that the company was being added to the S&P 500 on May 19, has responded with a nearly 30-point rise. The cryptocurrency exchange will replace Discover Financial (DFS), which is being acquired by Capital One (COF), the deal expected to close within the next two to four months.

Bitcoin, of which Coinbase holds a significant amount in its treasury, has not responded in any noticeable manner, stuck in a range between $102,000 and $105,000.

WTI crude oil, which has gained more than $5 - from $58 to above $63 - in just the past week, may be in a technical phase. The Energy Information Administration’s (EIA) weekly report (due at 10:30 am ET, could shed more light on the wheres and whys of oil's recent advance. In the main, consideration that the U.S. - and possibly Europe - is not headed for a recession could be fueling the recent positive bias.

Stocks are not exactly in "limbo" today, but there does not seem to be much in the way of actionable news or data.

At the Close, Tuesday, May 13, 2025:
Dow: 42,140.43, -269.67 (-0.64%)
NASDAQ: 19,010.08, +301.74 (+1.61%)
S&P 500: 5,886.55, +42.36 (+0.72%)
NYSE Composite: 19,723.38, +11.83 (+0.06%)